Handley Library endowment aids growth
Posted: December 8, 2012
The Winchester Star
Handley Regional Library’s endowment fund has grown 475 percent in the last two decades. But Director Trish Ridgeway said it still could do better.
In recent years, the library has weathered cuts in government funding, employee furloughs and all the challenges involved in operating three locations: the Handley Library, the Mary Jane and James L. Bowman Library and the Clarke County Library.
The Handley Board of Trustees Endowment is about $1.42 million, she said. It was $299,412 in 1992-93.
Finding a balance between raising funds for operating costs and building up an endowment fund can be difficult, Ridgeway said.
Meeting salaries and staying open are obviously essential, but the endowment is a “wonderful way to support the library forever,” she said.
“It is like a homeowner — first you have to pay your mortgage, but then you have to sock away for retirement,” Ridgeway said. “Fortunately for us, we have donors who want to contribute to both.”
The endowment is a combination of restricted funds, designated for specific purposes, and unrestricted funds, which can be used when library officials see a need.
The endowment is not a piggy bank the library leaders can dip into whenever they wish, Ridgeway said.
For instance, the funds can only be used toward expenses such as books, audio-visual items, library materials and Internet databases. They are not designated for furniture, salaries or regular operating costs.
In addition, the library board is “very cognizant of the fact that once you tap into it, you don’t have it as a revenue source,” she said.
The board has been even more aware of the restrictions on the endowment in recent years as the library struggled to meet operating costs, said Jim Riley of Winchester, its outgoing chairman and a board member for eight years.
Cutting library hours and staff furloughs are a couple of the challenges the library has faced recently because of decreases in revenue.
“It is critical to understand the difference between the operating income and the restricted endowment income,” said Riley, whose last day on the board was Nov. 30. “If we could use the endowment income for other purposes, we would, but we can’t because it is restricted.”
Handley’s proposed budget plan for 2012-13, which began July 1, is $2,130,643.
Of the annual budget, $106,238, about 5 percent of the library’s revenue, is income from the endowment fund.
Another $83,254 (4 percent) is projected to come from fundraisers, donations, the Friends of Handley Regional Library and $35,000 (2 percent) from Funds for Books.
Other sources of revenue are: local governments, $1,373,503 (64 percent); state revenue, $360,670 (17 percent); fines, fees, copier revenue and other sources, $103,500 (5 percent); and a transfer from the previous fund balance, $88,478 (4 percent).
At the end of a fiscal year, according to board policy, the organgization should have enough money to cover two to three months of operating costs in the next year “as a cushion,” Ridgeway said.
The board is working on the budget plan for fiscal year 2013-14, and it will include a $40,000 reduction in spending on books and audio-visual materials, she said. “The board has not yet approved it, but the revenue sources for books and audiovisual sources are down.”
The timing of the plan is due in part to the local governments’ decision to allocate funds in December or January, depending on the jurisdiction. Library leaders must wait to learn the amount of funding from those sources before they can complete their plan, said Cary Brubaker of Winchester, the new board chairman and a board member for about four years.
Once the local governments have committed those amounts, the board will set and pass the 2013-14 budget, she said.
“All three jurisdictions — Clarke County, the City of Winchester and Frederick County — have all really been huge supporters of the library,” Brubaker said. “We did have level funding last year, which was great. That hadn’t been the case in previous years.”
The downturn in the economy has meant funding from the three local governments has dropped from $1,644,120 in 2008-09 to $1,373,503 in 2012-13, according to the library’s budget. That is a decrease of $270,617 in five years.
The budget, as well as monthly finance reports and the regional library’s last three annual audit reports, can be found on its website — handleyregional.org.
Most of the endowment funds have been built up since the early 1990s, when a long-range plan instituted by former library director Marianne Roos went into effect, Ridgeway said.
The three-part plan was in place when Ridgeway became director in 1993. It proposed building a library in Stephens City and a new building in Clarke County and renovating the Handley Library. (The three projects have been completed.)
Ridgeway and the board revised the plan to include raising enough money to stock the libraries, leading in 1997 to the start of the Funds for Books Campaign.
“One of big plans was to get the library collection up to two books per capita [of population],” she said. “We were in the bottom quarter of the state libraries in terms of books per capita.”
The money would be used to stock the Bowman Library when it opened in 2001 and to improve materials at the other two libraries, Ridgeway said. The remaining amount of Funds for Books was then folded into the endowment.
The library system now has 319,418 items in its collection, divided among its three locations, though most can be transferred, Ridgeway said. The materials include print and electronic books, periodicals and library-owned and downloadable audio and video resources.
Although she did not have a breakdown per library, Ridgeway estimated that the system’s holdings are divided in this way: Handley Library, 42 percent; Bowman Library, 47 percent; and Clarke County Library, 11 percent.
In 1997, Bowman was expected to open in two years, and a fundraising goal of $3 million was set, Ridgeway said. But construction was postponed several years because of building delays and the realization by library officials that “we just weren’t ready.”
The goal was adjusted to $2.15 million in 1999, because book donations and state aid had increased, allowing the library to purchase new books. “We realized we wouldn’t need as much,” Ridgeway said.
The $2.15 million was broken down into two parts — $1.4 million to purchase new books for the system and $750,000 for an endowment fund, with “the interest to be used to purchase books in the future,” she said.
However, the board at that time said it would not spend any interest from the endowment until the total reached $1 million.
In 2005, a bequest of $300,000 by local author and philanthropist Nancy Larrick Crosby pushed the fund over the $1 million goal, so the interest from the funds could be used to purchase books, Ridgeway said.
The board designated $180,000 to be used for books and materials, which the library has been doing since 2005, she said. That fund has $26,000 left and is projected to be depleted in the 2013-14 or 2014-15 fiscal years.
In the eight years Riley has been a board member, the “endowment principal hasn’t grown dramatically just because we haven’t been involved in any aggressive fundraising campaign.
“In general, the principal of the fund has been fairly stable during the period I have been there,” he said. “The real aggressive fundraising period was prior to that.”
After the Handley Library Board began managing the library in 1960, it received its first trust fund in 1977, Ridgeway said.
It was less than $9,000 — the remaining money from the estate of Edwin L. Stine, who died in 1951, leaving the bulk of his estate to his wife, if she could be found, or to the library, if she could not be located.
By the 1990s, the fund was worth $41,000 and helped to establish the endowment fund.
Since then, 15 major donations — from $10,000 to more than $500,000 — came to the library in memory of loved ones or through bequests, she said. Some of the funds were designated to be spent, while others continue to provide interest income.
Through the years, the board has found it useful to take donors’ gifts and “park it in the endowment,” Ridgeway said.
“We try to use these things so they will benefit us for a while,” she said. “If we park it in the endowment fund, hopefully the interest will be more than if we put it in a money market fund or [certificate of deposit].”
For instance, a donation of $100,000 made by Harold Briggs to the library six years ago was placed in the endowment fund, she said. His daughter said he loved large-print western novels, so the board decided to use about $10,000 each year toward the purchase of new large-print books.
About $38,000 is left in the Briggs Fund, which is held in the endowment.
The most recent example occurred Friday, when the library received a bequest of $200,000 from J. Clayton Cochran Jr., who died Aug. 17, Ridgeway said. Cochran was a volunteer in the Stewart Bell Jr. Archives at Handley Library, and the money, which will be held in the endowment, will be called the Clayton Cochran Fund.
The income from the fund will be used to further the objectives and purposes of the archives and will be administered by the Joint Archives Committee, she said.
Not all bequests go to the endowment, though, Ridgeway said.
John D. Mahaney’s mother left an endowment of $108,762 in memory of her son, and the library receives earnings from the funds each year, Ridgeway said.
The interest from the Mahaney Trust, a separate endowment fund, is used for special projects and equipment that encourage library use and improve the quality of library services.
The fund has supported studies and projects for the library and provides monies for staff development, she said. It has a balance of $290,000.
Centennial plans, board changes
Since the library will celebrate its 100-year anniversary in 2013, the idea of a centennial fundraiser for the endowment has been considered, Ridgeway said.
However, the board decided to postpone that decision since it was about to undergo a major change of members.
Outgoing board members Riley, Sandra Armstrong and Veerle Foreman served through Nov. 30. The incoming board members are Judy Lloyd, Lisa McCoig, treasurer, and Eugene Schultz Jr.
They join Brubaker, the new chairman; Nancy Comer, secretary; Bob Grogg, vice-chairman; and John Clawson, Tracy Drumheller, Tamara Myer and Larry Sullivan.
The board has set up a committee to consider ways to meet the needs of the library, “whether that is to push something just for the centennial year or to have something long-term,” Brubaker said.
The board’s focus is to find other ways to make up the difference when the library has funding cuts, she said.
Generally, when the library holds a fundraiser, the money goes to the general fund to be used for operating costs, Brubaker said. The last fundraiser was a murder- mystery production in August that raised $6,200.
The money raised for the library’s centennial book, above printing costs, will also be used to offset furlough days during this fiscal year, she said.
In August 2010, library leaders scheduled four furlough days because the organization could not meet all of its expenses. In recent years, cuts in employee hours and reductions in library hours have also been required.
Longtime volunteer Ben Tennyson left a bequest of $20,000 to the library, released this year after the sale of his home, Ridgeway said. The library board voted to use the fund to “offset furlough days next year and perhaps the next year, depending on what else happens.”
The board members want to keep the library doors open on the current schedule, Brubaker said, adding that she would not like any further reduction in library hours.
“If we could just try to maintain what we have now, that would definitely be the number-one goal,” she said. “The question is, how can we fund extra time for the doors to stay open? That is what this long-range plan is about — helping to fundraise for the library.”
Much of the income flow problem is caused by drastic cuts in government spending, Ridgeway said. Regular local government revenue decreased by $275,925 from 2008-09 to 2011-12, and state revenue by $45,260.
“We haven’t been doing endowment fundraising lately. We have been struggling with the general fund,” she said.
Operating the libraries
It takes a great deal of time, energy and money to operate a library, Ridgeway said.
The buildings, for example, must be temperature-controlled for patrons — and to protect the books and other materials.
Handley has 33,000 square feet, Bowman 35,000 square feet and Clarke 5,000 square feet, she said. The FY 2012-13 budget estimates a cost of $117,114 for utilities in the facilities.
Salaries and benefits will account for $1,402,732 in 2012-13, according to the budget — more than half of the library’s total expenditures.
It has 16 full-time and 40 part-time employees, Ridgeway said. When their hours are added together and divided, the library has the equivalent of 38 full-time employees.
Along with staff efforts, volunteers give an extensive amount of time, Ridgeway said. For the 2011-12 budget year, volunteers worked 11,965 hours, a 9.7 percent increase from 2010-11.
Staff members and volunteers work together to maintain and operate the libraries, offer tours, teach classes and help patrons.
The library has 63,605 library card holders, Ridgeway said. Inactive borrowers are purged every five years, but new ones are constantly added.
However, the number of new cards has decreased steadily for several years — from 6,150 new cards in 2008-09 to 5,744 (2009-10), 5,120 (2010-11) and 4,795 (2011-12).
The reason is the opening of the new Clarke County Library in 2009, which caused a spike in the number of new cards, Ridgeway said.
The library moved from its location in the former Lloyd house on Main Street in Berryville, where it opened in 1985, to a ground-floor wing in the Joint Government Center on Chalmers Court. The building also houses the town and county governments’ administrative offices.
“The same thing happened when Bowman Library opened,” she said. “We had a huge jump in new cards when it opened and then it leveled off.”
Material use has continued to rise, with 768,438 library materials checked out in 2011-12, up 2.7 percent from 747,969 in 2010-11.
A slightly higher increase was recorded during that period in Internet services and manuscript use, with 844,438 in 2011-12 — up 3.3 percent from 817,181 the year before.
The biggest increase was seen in electronic resources.
E-book downloads rose from 1,435 in 2010-11 to 12,614 in 2011-12, a 779 percent increase. Audio- book downloads rose from 9,194 to 14,435, a 57 percent increase.
Library leaders are working on the goals in a long-range plan for 2011-16, Ridgeway said.
Anticipating local population growth, the plan proposes opening more branches in Frederick County in the next 10 years; finding a larger facility in Clarke County; providing more materials for Spanish speakers; and targeting more programs for older library users.
In its economic outlook, the plan discusses bringing salaries in line with cost-of-living increases.
It also details a public-relations campaign to solicit public support for an increase in funding from local governments that would restore library hours from the 1 p.m. closure on Thursdays and all-day closure on Sundays.
— Contact Laura McFarland email@example.com