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Executive Summary
THE QUESTION
Academic libraries are being challenged increasingly to demonstrate their value to their institution in compelling quantitative terms. There is a growing need to provide a response based on sound methodology to questions about the value of the university’s investment in the library.
“It used to be that the way you put together a library budget was to look at like institutions and
then argue for a little more. Now my provost is saying to me, “If I give you x dollars, what is the
return on investment to the University?”
—T. Scott Plutchak, Librarian, University of Alabama at Birmingham
In making decisions about competing priorities, university administrators evaluate their options in terms of how to allocate resources in the optimum way that will enable the institution to achieve its goals. At the University of Illinois at Urbana–Champaign (UIUC), Paula Kaufman, the University Librarian and Dean of Libraries, sought to identify the library’s contribution by saying “for each dollar invested in the library, the university received x dollars in return.” This statement framed the question of value from an economic perspective and guided the development of this case study.
Assessment initiatives in libraries are changing the metrics from inputs and activity (e.g., journals acquired, books circulated) that were measured in the print environment, to outputs and productivity measures that seek to reflect the impact of electronic resources where value is gained through functionality and accessibility of content. Guidelines for this study focused on developing a quantitative measure that recognizes the library’s role in supporting the university’s strategic goals. While most cost/benefit studies measure time or resources saved, this study highlights grant income generated by faculty using library materials.
METHODOLOGY AND FINDINGS
A review of existing research identified several cost/benefit analyses based on user surveys and faculty productivity studies correlating citations and grants. However there were no models for calculating a return on investment (ROI) in academic libraries. Public libraries have begun to employ econometric models and contingent valuations that have identified a financial return from $3 to $6 for every dollar invested.
The model developed in this study was inspired by an article by Roger Strouse, Vice President and Lead Analyst with Outsell Inc., who described the contribution of corporate and government libraries to their institutions based on the time and costs saved by users and the income generated when using library resources.
A parallel model developed for the university environment examined the use of citations drawn from library resources in grant proposals, the success rate for proposals, and the average grant award. The university provided institutional data on the percent of faculty who are principal investigators, their success rate with grant proposals, the amount of university grants, and the library budget. A survey was conducted with UIUC faculty that validated assumptions in the model and provided measures that confirmed the importance and frequency of citations in grant proposals, and the likelihood that the citations used in grant proposals were drawn from library resources.
Comments from the survey addressed the extent to which access to electronic resources has changed the way many faculty work. Their use of a “library without limits” allows them to integrate digital resources into their work regardless of their location, enabling them to verify facts and update references as they write proposals, articles, and reports, whether they are on campus or traveling. Those involved with interdisciplinary research described how electronic resources enable them to explore research that intersects with multiple disciplines. Having faculty articulate the value and impact of working in a digital environment provides specific examples of the importance of electronic resources in supporting the university’s goals.
CONCLUSIONS AND NEXT STEPS
The results of this study represent one piece of a larger puzzle and it would be useful to expand the model to include other factors in the complete system of inputs (e.g., library resources, faculty, staff, and students) and the influence of each on the system. Extending the model would support the calculation of the ROI for an additional dollar invested in the library.
It would be interesting to replicate the survey at other universities to determine if the factors incorporated into the model vary, and to identify the ROI for a range of institutions. If data collection is extended over a 10-year period, it would be worthwhile to conduct a regression analysis to explore correlations on the number of faculty, the total library budget, and grant income to compare the results across institutions.
As libraries redefine their role in the academy and develop new metrics to reflect the value of their
services, it is important to frame the conversation by connecting the library in a tangible way with the
specific strategic goals of the university. Recognizing the library’s contribution is as important to an
institution as an entity as it is to the individuals and communities that it serves. 
