This year, for the first time in our almost 10 years of existence, LPC is raising our membership dues. This blog post is a deep dive into the reasons for the raise, the process we went through to decide on it, and what, exactly, it will look like. If you just want a quick overview that you can share with your library administration or business office, don’t worry – we’re working on it! In the meantime, this post will hopefully answer many of your initial questions. We will also be hosting a membership meeting on March 2, 2023 at 12pm ET, followed by office hours where LPC Board members and staff will be available to answer any remaining questions.
LPC, Educopia, and membership dues
LPC is an affiliated community of the Educopia Institute, which provides legal, fiscal, and HR infrastructure and community facilitation. LPC’s Board makes decisions about the community’s direction and finances, while Educopia provides the structures and staffing that make our work possible. Educopia helped found LPC as a seed-funded project, and has hosted it as an affiliated community since 2014.
The vast majority of LPC’s revenue comes from membership dues. The Library Publishing Forum does bring in some revenue, but our aim has always been for the event to only make enough to cover its costs. (Side note: we were very grateful to not be relying on our conference to support the community financially during the pandemic!) Staff costs are sometimes defrayed by grant-funded projects (such as the recent Library Publishing Workflows), but generally speaking, LPC covers its expenses with membership dues.
Those dues have been $2,000 per member library per year since LPC was founded. We have been able to grow the community and build up an operating reserve* without increasing membership dues for two reasons:
- Our membership has grown significantly over the last five years, bringing in additional revenue.
- We have been subsidized by Educopia.
So what changed?
Until this year, every Educopia affiliated community was charged the same overhead fee: a flat $20,000 per year. Educopia leadership has long recognized that this structure was both inequitable (since communities with smaller budgets paid a much higher percentage in overhead) and unsustainable (because it did not cover Educopia’s costs in running the program), but it took until this year to lay the groundwork for a new structure. The implementation of a new overhead structure ended up being rolled out as part of a larger set of changes at Educopia, including a transition to a shared leadership model. LPC leadership has been kept in the loop along the way, and has been expecting a change for a number of years.
Community overhead will now be determined by a formula that takes into account the total amount of money that Educopia is managing on each community’s behalf – including the annual budget and the operating reserve. This formula accounts for the direct costs of billing and accounting, and also allows the total funds managed to serve as a rough proxy for the overall size of the program. LPC is by far Educopia’s largest affiliated community, a fact that holds true across our budget, our staffing, and the number of programs we support.
As the largest affiliated community, LPC had the biggest gap to close between the previous, flat overhead fee, and the new, formula-based fee. Our overhead fee will fluctuate somewhat from year to year, based on our budget and the amount of money in our operating reserve, but based on current numbers, our fiscal hosting fee for 2023 will be around $38,000. (The exact amount will be determined in July, since it will be impacted by new memberships and renewals. See Renewal Deadline section for more about this.) This is nearly double the previous $20,000 flat fee.
There are a couple of other changes happening at the same time, including a change in how staff time is billed and in our fiscal year calendar. Neither of these will result in any shifts that are visible to the community, so we’re not focusing on them here, but it is worth noting that they will positively impact staff pay equity (including allowing Educopia to more fairly compensate the lowest-paid program staff) and will make it easier to manage LPC’s budget within the Educopia context.
What options were explored?
Since last fall, LPC’s Board has been working closely with Educopia staff to understand the changes and determine how best to adapt to them. All options were on the table, including:
- Raising membership dues to cover the increased overhead
- Identifying additional revenue streams to cover the increased overhead
- Cutting our budget and spending down our operating reserve to lower our overhead fee
- Leaving Educopia for a different fiscal host
After much discussion, the Board determined that changing fiscal hosts would likely not result in lower overhead fees (plus the other disadvantages of parting ways with Educopia, with whom we have an established, effective relationship), and that identifying additional revenue streams is likely to be a longer-term project. That left the Board with a choice between making substantial cuts to staffing and programming, or raising membership dues. Given the value of our existing programming, our modest membership dues, and the fact that those dues haven’t changed in 10 years, we decided to raise dues.
Membership dues: different ways to slice the pie
Once we determined that raising membership dues was our best path forward, we explored seven different scenarios for doing so. All of them included one or both of the following strategies:
- Substantial, one-time increase(s) to “catch up”
- Small, annual increases to “keep up”
In evaluating the scenarios, the Board was looking to balance:
- LPC’s financial sustainability – we eliminated scenarios that would leave us with deficit budgets indefinitely or that would cause our operating reserve* to dip below a responsible level
- Feasibility for the community – we eliminated scenarios with increases that felt overly burdensome for member libraries
- Predictability – we understand that library leaders and business offices are wary of large or unexpected jumps in pricing, and wanted to identify a scenario that would allow us to keep up with inflation and program growth without requiring sudden ‘catch up’ increases
What we decided on
The Board eventually settled on the following plan:
- A one-time, $500 increase in dues for the 2023-24 program year (bringing the dues for the upcoming billing cycle up to $2,500)
- A set, annual dues increase of 5% every year starting with the 2024-25 program year
- Review every 3 years by the Board to ensure that the annual increase remains necessary and at an appropriate level.
This plan will require us to dip into our operating reserve* for a few years, but it will keep us out of the danger zone in the short term and put us in a sustainable position for the long term. We have projected out 10 years of revenues and expenses based on this change to get a sense of its likely impact, but it is important to note that membership dues will continue to be revisited regularly. Educopia may need to tweak its overhead formula over time, and LPC’s budget may change in ways that necessitate changes to membership dues. The purpose of the dues structure being rolled out is to put us on a path to sustainability, not to lock us into any particular model for the long haul.
Flexibility and making the case
The Board’s top priority is keeping the community intact. We recognize that for some libraries, even these modest increases may be a hardship. If that is the case, we invite you to email email@example.com to schedule a one-on-one with the Community Facilitator. We have to take this step to keep the community going, but we can work with individual member libraries to overcome obstacles to retaining your membership. We have a number of tools at our disposal, and we’re happy to work with you to find a solution that keeps you in the community.
We also recognize that some library business offices use percentage increases in price to evaluate contracted services. For those offices, the 5% annual increase may be a trigger for review or cancellation – let alone a one-time, 25% increase (the $500 increase for the 2023-24 program year). The small amounts of money involved will hopefully make this feasible, but we will do our best to provide documentation to support these discussions.
In addition to this blog post, we will record the presentation at our 2023 membership meeting, and we will issue a one-page overview of the changes that can be shared with your library. We are planning on including the following information:
- Background on the reasons for the increase
- Information about value of membership and return on investment
- Comparisons with peer community membership fees
- Explanation of the plan for membership dues going forward (so they understand that the $500 jump is a one-time catch-up)
If there are other types of information that would help you in communicating this change to your library, please let us know.
We will send out membership renewal invoices by the beginning of April for the program year beginning on July 1. Because our fiscal hosting fee will be determined in July based on the membership revenue we are expecting, libraries that do not want to remain members must notify us by June 30, 2023. If you notify us before that date, we will cancel your invoice and terminate your membership as of June 30th. After that date, we will not be able to cancel your invoice and you will be liable for your membership dues for the year. If you have any uncertainty about your ability to remain a member, please let us know so we can plan accordingly.
We want to reiterate that the Board did not come to this decision easily and we make it out of a hope to sustainably provide the space and resources for the library publishing community for the future. If you have questions, please attend our membership meeting on March 2, 2023 at 12pm ET or reach out to an LPC Board or staff member. We look forward to seeing our community continuing to thrive for many years to come!
*An operating reserve is essentially the community’s savings. Fiscal best practices for nonprofits include keeping approximately 18 months of operating income in reserve. This money can be used to make up the difference if expenses exceed income in a particular year, and under some circumstances can be spent to further strategic goals, but its main purpose is to allow for a responsible wind-down period or a transition to a new funding model if needed.