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Education spending

Worldwide education and library spending

In 2001, the 29 countries covered in this report spent approximately $1.1 trillion dollars on education or roughly 4.1 percent of their collective gross domestic product. The United States spent the most on education in 2001 at roughly $500 billion, followed by Japan, Germany and France at $139 billion, $89 billion and $82 billion respectively. While the U.S. spent the most in absolute dollars, it ranked tenth in education spending as a percent of GDP at 4.8 percent. Saudi Arabia ranked first investing 9.5 percent of GDP in education. The top five include Norway, Malaysia, France and South Africa. All five countries spent in excess of 5 percent of GDP on education. The United Arab Emirates came in 29th at 1.9 percent of GDP.

Education spending per capita provides another lens to view worldwide education spending. Norway leads the group again with an estimated $2,850 per capita spent on education. The United States ranks second at approximately $1,780. The top five also include France, The Netherlands and Canada. Each spent more than $1,200 in education per capita in 2001. Uganda ranked 29th at approximately $5 per capita.5

Library spending

Library spending for the selected countries totaled approximately $29 billion in 2000. This represents roughly 94 percent of the estimated worldwide annual library expenditure of $31 billion. It is important to note that this total figure is approximate. Several of the sample countries (including Brazil, Colombia, Saudi Arabia and China) do not report, or regularly collect, library expenditures.6

The United States led 2000 library spending at approximately $12 billion, with Japan ($3.2B), the United Kingdom ($3.2B), Italy ($1.6B) and France ($1.6B) rounding out the top five sample countries. The United States represents approximately 40 percent of sample country library spending and the top five countries represent 75 percent of total estimated library expenditures.

A look at library spending as a percent of country GDP again provides a different view. South Korea led the field at 0.31 percent of GDP, followed by the United Kingdom (0.21 percent), Australia (0.20 percent) and Canada (0.20 percent). The United States ranked eighth at 0.12 percent.

Examining annual library spending per capita provides a similar top five list. The United Kingdom tops the field at approximately $54 per capita. Canada ($45), Australia ($45), the United States ($43) and Norway ($40) create a familiar leading group. There is a wide degree of disparity across the group with relatively high GDP countries like Spain and Mexico ranking low on library spending per capita. As expected, high-population countries (with the exception of the United States and Japan) ranked relatively low on library spending per capita7.

A comparison of country education expenditure and country library expenditure does not provide any obvious associations. While it holds that most of the countries that rank in the top ten for education spending also rank in the top ten for library spending, there are obvious exceptions. Spain, Mexico and China rank high in education spending, but did not rank in the top ten for library spending, based on available data. Saudi Arabia ranked first in total educational spending per GDP, but based on available estimates, trails the sample countries in library spending. It is important to note again that there is no worldwide library expenditures reporting standard. Some library spending could be included in country total educational expenditures, which will skew a comparative view. Interestingly, anecdotal information suggests that one challenge for many countries is corruption. Funds earmarked for public entities—libraries included—may be diverted long before they reach their intended recipients.8

Trend data could provide very useful management information, providing insights into regions where investments in libraries are growing or contracting. Retrospective trend information is not currently available for worldwide library expenditures. Several of the library expenditure sources used to compile this report are now collecting data for 2003, thus providing management trend information for the future.

GDP spending on education and libraries9

Library funds–sources

Funding source information was available for the year 2000 for 15 of the 29 sample countries selected for this scan.10 For the 15 countries covered, library funding came from three primary sources, public funding, user fees and charges and “other.” Public funds are defined as funds received from central or local governments; user fees and charges are income generated by library operations and from fees, charges and subscriptions. “Other” includes miscellaneous sources such as donations, grants, proceeds from asset sales and interest earned.

For all countries covered, public funding is the primary source of library funding, comprising 87 percent of funding on average. Norway and France received over 90 percent of their funding from public sources in 2000. United States public libraries receive 87 percent of their funding from public sources. User fees and charges represent 4 percent of library funding on average, with the remainder of resources coming from the miscellaneous “other” sources. The amount of funding from nonpublic sources varies significantly across the sample, with Hungary receiving over 20 percent of its funding from “other” sources. The United States receives approximately 8 percent of its funding from these miscellaneous sources.

U.S. funding—foundation and private grants

Although worldwide data was not available to analyze the primary sources of nonpublic funding around the world, data does exist that can provide an overview of the nonpublic funding in the United States.

Foundations and private grant funding are significant sources of U.S. library funding. Based on figures presented by the Foundation Center, the nation’s leading authority on philanthropy, U.S. library grant funding averages approximately $200-300 million annually, based on the Center’s report of grants over $10,000 from the top 1,200 granting institutions. 2000 and 2001 were particularly strong years, totally nearly $300 million annually.11 The spike in 2000 and 2001 is attributed to large donations from the Bill and Melinda Gates Foundation.

In 2000, $30 million was granted to organizations outside of the U.S. Of this amount, $13 million were Gates Foundation grants, with Canada receiving $5.5 million and Chile receiving $7.5 million. In 2001, the $24 million granted outside the U.S. included $6 million to Austria, $5 million to England and nearly $4 million to South Africa.

In 2002, grants totaling $12 million were awarded to libraries outside of the U.S., including those in Mexico, South Africa, Latvia and Kenya.

Historically, the Andrew W. Mellon Foundation has been the largest single private foundation granting source for libraries. While the Gates Foundation led in 2000 and 2001, Mellon has consistently supported libraries as a part of its overall mission in support of scholarship. It ranks as one of the top ten private granting organizations in the world. Together these top ten agencies have provided libraries with more than $210 million in grant support since 2000.

The top private granting organizations award grants for a wide variety of projects including technology support, collections and acquisitions, programs and program development, conferences and seminars, staff, staff development, income development, campaigns, technical assistance, publications, fellowships, land acquisition and building and renovation, as well as general support, continuing support and even debt reduction.

In 2002, approximately $18 million in private grants reported to the Foundation Center were awarded for electronic media and online services.12 Many organizations clearly benefited from Gates funding in 2000 and 2001.

U.S. funding–government

We looked at two United States federal government organizations, the National Science Foundation (NSF) and the Institute of Museum and Library Services (IMLS) as sources of funding for libraries. The NSF is an independent agency of the U.S. government whose mission is to promote the progress of science, primarily through the initiation and support of science research programs. IMLS is a federal grant-making agency that administers the Library Services and Technology Act and the Museum Services Act.

As of August 2003, NSF has $380 million invested in ongoing projects with a descriptor “library.” Of nearly 500 ongoing NSF-supported projects reviewed for this scan, only three were actually granted to libraries.13 While NSF grants often fund research on organization, storage and dissemination of information, grants are not typically awarded to the institution’s information center or library. Also, NSF customarily provides grants to researchers, not libraries.

IMLS grant support consists of the disbursement of the federal Library Services and Technology Act (LSTA) funds. Over 80 percent of the funding provided to libraries by IMLS is granted directly to the states for further disbursement. Of direct grants to states, IMLS awarded $30 million net in grant monies during FY2003. In this same fiscal year, funding for leadership grants nearly doubled to more than 15 percent at the expense of conservation, general operating support and museum assessment.

LSTA funds available to libraries are expected to increase from the current level of $180 million. In September 2003, The Museum and Library Services Act of 2003 was signed into law, providing appropriations authority of $232 million annually for libraries for FY 2004 through 2009.14 For 2004, IMLS requested nearly a 16 percent budget increase. These requests were modified in a late November 2003 appropriations conference and votes on these appropriations are still pending. The amounts expected to pass represent an 11 percent increase in total, including a 5.4 percent increase for state grants and a doubling of “21st Century Librarian” recruiting funds from $10 to $20 million.15,16

Senator Judd Gregg, Chairman Senate Committee on Health, Education, Labor and Pensions says: “Even with the rise of 24-hour news cycle and Internet blog sites, there will always be the need for a good book. This bill helps to ensure our libraries do not become a relic of the past, but remain an important part of our neighborhoods and our culture… as well as allow[s] funds to be used to recruit new professionals into the field of library science.”17

Library funds–uses18

Uses of library funds worldwide

Uses of ARL library funds 2001-02

Resource allocation patterns among library funds across the countries covered in this report showed striking similarities, despite major disparities in other areas. On average, the countries included in the scan spent 53 percent of annual operating funds on staff, 27 percent on print material stock, 3 percent on electronic content and annual electronic subscriptions and 17 percent on other, primarily facilities and administration. Members of the Academic Research Libraries group in the United States show interesting similarities.

Staffing allocation was similar across most countries and regions in the sample. The majority of countries in the sample allocated between 52 percent and 60 percent of their resources to staff. Germany allocated the highest percentage to staff at approximately 60 percent; Mexico was the lowest at 42 percent. It is interesting that automation-poor countries show similar staffing expenditures to automation-rich countries. Where, then, are productivity gains that generally follow increased automation?

There is wide variability in the percentage of library funds allocated to electronic content and annual electronic subscriptions. Spain reported allocation of less than one tenth of one percent of its operating funds to electronic resources. The United Kingdom spent close to 8 percent on electronic resources in 2000. The Netherlands reported approximately 5 percent and the United States spent approximately 2 percent.

Considering the amount of ink devoted to “the shift from print to electronic” in the library literature, the low percentages of materials funds devoted to electronic resources seems disproportionate to the hype.

As funding to libraries contracts or remains static (while the cost of materials does not) staffing and materials budget receive increased scrutiny from funding agencies and library administrators. It is clear that libraries must find cost reduction opportunities in both of these budget categories.

U.S. public libraries—materials budget response to budget cuts

Although there is no worldwide data available to analyze cost reallocation patterns, there is information available for U.S. libraries. Cost reductions in materials budget, especially print materials, are evident across all library sizes and types. Libraries are changing both the amount and format of materials purchased. Library Journal’s annual buying survey of public libraries indicates libraries are buying fewer materials, cutting standing orders and buying lower-cost materials, choosing paperback over hardback, for example. In the interviews OCLC did for this report, several public librarians reported they were ordering bestsellers in paperback to accommodate the need for multiple copies at the cheapest cost. They also reported significantly reducing other types of print purchases in favor of DVDs and CDs—media their constituents request. Reductions in print reference materials were identified as the “hardest hit” areas in the 2003 Library Journal survey, with 57 percent of public libraries indicating that they will reduce spending on these materials.

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