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Whooo Says…

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Dear Whooo,

I read your column in the January 2012 issue of Plains to Peaks Post, which referred to revenue growth for nonprofit hospitals. I’m confused. I’ve always thought that a nonprofit organization is one that works for the good of the community or user group. I thought that nonprofits did not need to worry about earning money or revenue in the same way that a for-profit organization does. Can you explain this to me?


Fiscally Flummoxed

Dear Flummoxed,

I’m so glad you asked this question. Confusion about profit vs. nonprofit institutions in the health sciences library world is not uncommon!

For our purposes, Wikipedia’s definition sums it up pretty well: “A nonprofit organization (NPO) is an organization that uses surplus revenues to achieve its goals rather than distributing them as profit or dividends.” Wikipedia goes on to explain that a nonprofit organization in the United States is permitted to make money. Surplus revenues (money earned in excess of expenses) must be kept by the organization and used to keep the organization running, expanding or implementing plans for the future instead of existing as profit or being distributed to stock holders as a for profit organization does.

Now, I’m sure you are thinking, “Well, that’s nice, but what does that have to do with me and my library?” What this means for all of us working for nonprofit organizations is that all the rules of financial budgeting and accountability apply. Nonprofit organizations must cover their operating expenses and generate extra revenue in order to reinvest in future plans and expansion. Our organizations are businesses working to accomplish their mission in the most cost-effective and efficient way possible. In this scenario, librarians have to be business savvy in the way we operate our libraries. We need to know how to provide the greatest benefit possible to our users and to be able to justify library expenses in terms of impact on the mission of our organization.

Another way to look at the responsibilities of the librarian in this scenario is to consider the library as a small business within a business. As a small business operator, a librarian has the responsibility to assess the environment to determine need, define a mission, establish a clientele, develop a budget, provide staffing and resources, provide needed services, and market and promote those services and resources.

  • It is up to the librarian to find out what is needed in the marketplace (the hospital or academic center), and to budget for, develop and provide necessary resources and services in the most cost effective way.
  • It is up to the librarian to market and promote those services and resources to generate customers (users).
  • It is up to the librarian to know who and what the competition is and to educate customers about why library resources and services are valuable.
  • It is up to the librarian to demonstrate to her funders that she is running a successful business that should be adequately funded.

I hope this helps with your confusion, Flummoxed. Those of us in the library world don’t often think of ourselves as “business owners.” Remembering how and why we exist, in business terms, is helpful when deciding how to allocate our time. It provides greater insight into why we have to make the time to communicate our value to our users and to our administrators.

If you need further information on determining the value of your library in a business environment, you may want to contact either Betsy Kelly or Barb Jones to see if Measuring Your Impact is being taught in your area.  Or you may want to check out the MidContinental Region’s web site to look at the Hospital Librarian’s Toolkit (, the Library Value Calculators ( or the Working with Library Statistics page (

I will be interested to hear how you change your library practices after learning about the relationship between library and business practice.



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