Clayton County Library Diversifying Funds to Enhance Financial Stability

Subject: Financial Management
Pages: 21
Words: 5766
Reading time:
23 min
Study level: PhD


In this paper, I investigated how Clayton County Library could adopt a financial diversification strategy by conducting a wider investigation of the implications of a financial diversification strategy in the non-financial sector. To do so, I used a case study research design to gather the views of library directors and other knowledgeable professionals who understood the financial practices of public libraries. Here, I mainly focused on understanding how the legal and work dynamics of Clayton County Library could affect the adoption of a financial diversification strategy. Using the coding technique, I came up with different findings that explained the factors to consider when adopting the same strategy at Clayton County Library. In detail, I found out that financial diversification was a complex strategy to implement at Clayton County Public Library because stakeholders should first consider the implications of organizational characteristics, legal frameworks, and management attitudes before adopting the strategy. Similarly, I found out that the “blind’ adoption of a financial diversification strategy at Clayton County Library could distract the institution from pursuing its goals because non-profit financial entities do not have the same mandate as profit-making organizations do (Albertini, 2013). Lastly, in this paper, I highlighted the difficulties associated with measuring the performance of Clayton County Library if it adopted the financial diversification strategy. In this chapter, I discuss these findings and describe the implications that public libraries have to contend with if they adopt the financial diversification strategy. Similarly, in this chapter, I also outline recommendations that public library stakeholders need to consider when adopting the financial diversification strategy.

Interpretation of Findings

Establishing the extent of government support to a public library is difficult because governments are often under increased pressure to finance the operations of other institutions as well. This trend stems from the increased scope of public funding (for state and federal governments) that has expanded since the 1960s (American Library Association, 2014). In this paper, I have already shown that many public libraries receive funding from different levels of government, including the federal government, state authorities, and municipal authorities (American Library Association, 2013). Government funding has remained a traditional source of public library funding because of its stability and relative security. In fact, many social welfare organizations (besides public libraries) seek public/government funding based on these advantages. This is why Blume-Kohout, Kumar, and Sood (2014) say government funding is “money in the bank.” An independent report recently disclosed that about 40% of government funding is ordinarily pre-approved (Thornton, 2014; Cuillier & Stoffle, 2011). In fact, occasionally, government agencies do not require formal applications to fund social welfare programs. New organizations that engage in new projects are often disadvantaged when seeking government funding because the process of seeking new funding is cumbersome (Thornton, 2014).

Public libraries have often benefitted from the stability and ease associated with government funds. However, revenue volatility and the sustained demand for library services have made it difficult for these institutions to continue relying on this source of funding (Cuillier & Stoffle, 2011). Consequently, they have to seek alternative sources of money to finance their operations (Cuillier & Stoffle, 2011). This is what has driven them to pursue some of the alternative sources of money highlighted in this paper.

Financial diversification is a new concept in the financial management practices of nonprofit entities, which strives to solve the above-mentioned problem. Many researchers have investigated its application within the scope of the lucrative profit-making sector but neglected its application in social welfare organizations (Bowman, 2011). This is why there has been little focus on its application in public libraries. However, based on the financial challenges that affect public libraries today, researchers are now concerned about its application in nonprofit organizations (Coffman, 2013). Clayton County Library provided a perfect example of an institution that experiences the financial challenges of a poorly performing global economy. As such, its library director gave varied views regarding the adoption of the financial diversification strategy in the institution. These views highlighted the importance of understanding the effects of legal restrictions, management attitudes, and organizational practices when implementing the financial diversification strategy. Legal issues emerged as the most serious concern for such institutions when adopting the financial diversification strategy.

Researchers have often highlighted legal constraints as restrictions on the financial practices of different organizations (Coffman, 2013; Bowman, 2011). As seen in chapter 4 of this paper, many respondents agreed that existing legal statutes constrained the potential to adopt financial diversification practices in public libraries. Taxation emerged as the most notable concern among the respondents because they stated that the law exempts most public libraries from taxation because of the nature of their social welfare activities. Based on this fact, many respondents were pessimistic about the adoption of a financial diversification strategy in public libraries, if stakeholders failed to discuss these legal restrictions.

The views of the respondents highlight the views of other researchers who believe that state agencies and institutions (such as the Clayton County Public Library) often enjoy legal protections that profit-making entities do not (Coffman, 2013; Bowman, 2011). For example, Helmig, Spraul, and Tremp (2012) highlight general liability issues as legal impediments to the adoption of financial diversification practices in American public libraries. They stated that, in line with the doctrine of sovereign immunity, it is impossible to sue the state and its agencies (including public libraries) without their consent (Helmig et al., 2012). Therefore, Clayton County Library enjoys sovereign immunity, unless there is a specific legal exception that states otherwise (Clayton County Public Library System, 2014).

Different states have unique subsets of the law, which exempt public institutions from prosecution. For example, the state of Georgia has a waiver through the Tort Claims Act, which states:

“The state waives its sovereign immunity for the torts of state officers and employees while acting within the scope of their official duties or employment. They shall be liable for such torts in the same way as a person or entity would be liable under similar circumstances; provided, however, that the state’s sovereign immunity waivers, subject to all exceptions and limitations in this article” (Helmig et al., 2012, p. 66).

Therefore, the Tort Claims Act allows people to sue state officers, based on the actions they commit when undertaking their duties. However, this legal provision does not apply to all states (Institute of Museum and Library Services, 2013). Therefore, public libraries that are outside the jurisdiction of Georgia are subject to unique sets of laws (Mapulanga, 2012). Nationally, sovereign immunity laws protect such institutions (Institute of Museum and Library Services, 2013). Besides outlining a framework that governs liability issues, Georgian laws affect the management structures of public libraries and, by extension, how well they could adopt financial diversification. For example, the law says Boards of Trustees must manage public libraries in Georgia (Clayton County Public Library System, 2014). The Boards outline the selection process for these groups of people and state the length of their tenure (Clayton County Public Library System, 2014). The law also outlines specific duties and responsibilities of these library staff. Concerning the financial practices of these institutions, existing legal statutes prohibit board members from taking revenues that come from library activities, unless they are reimbursing themselves for activities they undertook while performing their duties (Klentzin, 2010). Similarly, in another issue that affects the financial operations of public libraries in Georgia, the law states that such institutions would only receive state funding if they meet for a minimum of four times a year (Klentzin, 2010). Furthermore, the law states that these meetings should include public participation. Issues concerning tax exemptions and tax return compilations are also likely to emerge here. This view is in line with the goals of the Internal Revenue Service (IRS) that outlines tax code exemptions for public libraries and other non-profit organizations (Koliba, Meek, & Zia, 2011). A crucial requirement for these non-profit organizations to receive the privilege of non-payment of income tax is the failure to pursue commercial and monetary profits (Koliba et al., 2011). Some of the financial alternatives highlighted in this paper, such as undertaking entrepreneurial projects outside the library field, mergers, and privatizations are problematic alternatives for Clayton County Library because they would cause legal ambiguity regarding the treatment of revenue obtained from adopting these financial options. Besides this issue, Section 501 of the American constitution also requires tax-exempt institutions to demonstrate proper organizational and structural exclusively for charitable or public welfare purposes (Koliba et al., 2011). Similarly, the law expects those tax-exempt organizations to give all their money to charitable organizations (Koliba et al., 2011). More importantly, Section 501 outlines that any organization, which does not undertake its activities, in line with its basic function, should pay income tax (Koliba et al., 2011). This provision means that if Clayton County Library engages in profit-making ventures, outside its purview of library services, it is bound to pay income taxes. This is why Koliba et al., (2011) say that if an institution provides shelter to the homeless, but engages in a business of selling motor vehicles, the revenue obtained from such “side businesses” may be subject to income taxes. This same complexity characterizes public libraries when they engage in income-generating activities that do not fit within their primary goal (providing library services). The same challenge exists for sales and property taxes because non-profit entities are not required to pay these taxes (Koliba et al., 2011). Engaging in activities that are beyond their scope of operations, however, makes them eligible to pay them. Based on the above legal requirements, it is unclear how existing legal provisions would accommodate a new mandate for public libraries to generate money through alternative means (besides public funding). Based on these dynamics, a complete shift of public library policies should occur if public libraries want to adopt a financial diversification strategy. If this is not the case, there should be, at least, a careful attempt to make sure that new revenue-generating activities do not contradict existing laws.

Limitations of the Study

The limitations of this study refer to factors that affected the data analysis process. One such factor was the limited “generalizability” of the study findings because of the relatively small sample size of the respondents used. While this paper strived to have a diverse research sample, its relatively small sample size meant that some variables could emerge when applying the findings outside the context of this study sample (Creamer & Ghoston, 2013). Therefore, it is important to consider the context of this paper when evaluating the validity of the findings. The main assumption of having a diverse sample was that the views obtained from the respondents would represent the views of major stakeholders involved in public library financing. This is why I did not only incorporate the views of library directors but other professionals who work in the same sector, such as grant writers, in this study. Similarly, although this paper used a case study research design, which mainly focused on Clayton County Library, it also sampled the views of library directors from other jurisdictions around the country. The main goal of doing so was to come up with a representative sample of views that provided a true picture of financial alternatives available for public libraries in America.

The lack of available data about the adoption of financial diversification strategies in public libraries was also a study limitation. As highlighted in other sections of this paper, the focus of this study (diversification of funds to enhance the financial stability of public libraries) is a rare topic. This limitation affected the volume of data available for conducting background research about the study topic. Furthermore, it limited the volume of information available for comparison purposes. Lastly, the presence of the researcher during the interviews could also have affected the quality of information obtained from the research, thereby limiting the study in this regard (Priede, Jokinen, Ruuskanen, & Farrall, 2014; Staller, 2013). This step was, however, unavoidable. Nonetheless, some of the views, highlighted in this paper, were free from this bias because some respondents gave their views through semi-structured questionnaires. This approach was, particularly, instrumental in obtaining the views of respondents who lived far.


Undoubtedly, many people agree that public libraries need to diversify their sources of funds to support their mission-related duties. Already, in this paper, I have shown that these public institutions attract funds from charitable organizations and corporate entities as alternative sources of income. Similarly, in this paper, I have shown that these public libraries could similarly pursue grants and sponsorships from government foundations, as alternative sources of funding. To come up with these findings, I explored these sources of funds and their effects on the operations of public libraries. However, I emphasized (more) a controversial approach to raising funds – commercial activities that are outside the purview of the library sector and the increase of library fees. Some people have associated these alternative approaches for raising funds with anxiety and criticism because of their potentially negative influence on the mission and goals of public libraries. However, people seldom acknowledge the potential negative ramifications associated with contemporary sources of finance.

The literature review section of this paper showed that alternative sources of funding, which could supplement the income of public libraries, include corporate partnerships, fundraising, expanding user charges, education funding, mergers, privatization, and undertaking entrepreneurial projects outside the library field. Based on the legal and organizational issues depicted in this study, it is important to point out that some of these financial diversification options could be problematic for Clayton County Library and similar public institutions that share the same dynamics. For example, mergers and privatizations require legal changes to occur. Particularly, there need to be extensive lobbying efforts to make all library stakeholders agree to adopt a liberal framework that would allow public libraries to conduct their businesses (how private entities do). More so, there should be a strong emphasis to make sure that even though such changes occur, the institutions should not lose focus of their social welfare duties. Undertaking entrepreneurial projects outside the library field is also a problematic proposal because this paper has shown that the potential for a clash in goals and legal responsibilities would impede the adoption of such a strategy. Taxation is only one legal challenge that would emerge in this regard. The respondents in this study have not only affirmed this view because researchers have explored the feasibility of adopting a financial diversification strategy in not only public libraries but other non-profit institutions as well.

Humphery-Jenner (2013) says pursuing commercial activities outside the library field is not only a common alternative for public libraries but also other non-profit entities as well. For example, museums commonly sell snacks through snack bars, within their premises (Aharony, 2012). Museums also manage shops and rent extra spaces to third-party clients. Collectively, based on the challenges associated with adopting alternative sources of funds for public libraries, engaging in business ventures that resemble the same corporate activities undertaken by profit-making enterprises would, therefore, require a lot of political and social lobbying to occur. These challenges leave Clayton County Library with only a few alternatives for seeking alternative sources of funding. Concisely, based on the financial alternatives identified in the literature review section of this paper, corporate partnerships, fundraising, expanding user charges, and education funding are the main alternative sources of funding that could improve the financial sustainability of Clayton County Library. People have used some of these funding sources (before) to improve the financial sustainability of public libraries (Bakar & Putri, 2013). Nonetheless, based on the limitations outlined in this paper, Clayton County Library should be more preoccupied with seeking alternative sources of finances that are in line with the nature of its business. These alternatives include:

Personal Contributions

Personal contributions are common alternative sources of funding for public libraries, but their unpredictable nature emphasizes the need for public libraries to seek alternative sources of funding, beyond the mandate outlined for public libraries. Sala, Knies, and Burton (2014) agree with this fact and say that if public libraries seek personal contributions as the main alternative sources of funds, they are bound to experience turnover changes of more than 50%. In this regard, it is difficult for library directors to plan for anything. Furthermore, since they cannot influence the activities of their donors, financial volatilities are similarly bound to affect them (Thornton, 2014). Goal displacement is also another effect of personal donations that public libraries have to know. This effect emerges from the modification of library operations, by library directors, to align with the wishes of their donors. In fact, a study conducted by Mapulanga (2013) revealed that up to 25% of all public libraries that have received donor funding, within the past five years, have modified their goals to align with the wishes of their donors. Furthermore, additional anecdotal evidence shows that some financial sponsors may stipulate stringent terms and conditions for offering grants and donations to their subjects. In fact, some public libraries have to hire more staff to fulfill these requirements (Mapulanga, 2013). Sung, Hepworth, & Ragsdell (2013) also say there is enough evidence to show that some organizations and foundations are increasingly dominating the space of private donations to public libraries. Some of them exert undue influence on many public libraries in America. This is an undesirable situation (Sung et al., 2013). Nonetheless, if public library managers understand these issues, they could easily benefit from individual donations as an alternative source of funding. Although individual contributions emerge as flexible sources of funds for public libraries, Winston (2013) argues that their agility in financing a library’s operation is often overstated.

Concerning fundraising as a viable strategy for improving the financial stability of public libraries, there is room for public libraries to adopt innovative fundraising ideas that transcend the traditional concept of borrowing funds from well-wishers (Collins, 2012). For example, the Clayton County library could rent out additional office spaces for conference facilities and similar functions (clients could comprise profit-making businesses or nonprofit businesses). In this regard, the library could rent its office spaces to new or existing businesses.

Corporate Contributions

Corporations are viable sources of alternative funds for public libraries. They can contribute to social welfare activities in many ways. For example, they could contribute in kind, gifts, and auxiliary services. Similar to individual donors, corporate donors could also cause revenue volatility and goal displacement (Sung et al., 2013). Veg-Sala (2014) affirms this fact when he says that revenue volatility may be problematic for public libraries, but their volatility is less than that of personal contributions. However, changing patterns in corporate management practices affect the viability of this funding source because many companies are using their resources for undertaking international ventures and promoting education (Veg-Sala, 2014). The quest for companies to avoid negative publicity and the fear that corporate actions that could cause negative customer reviews could cause this outcome (Sung et al., 2013). In this regard, many corporations prefer to engage in activities that promote their corporate image (Veg-Sala, 2014). Therefore, the link between corporate funding and their self-interests is tightening.

While managers hold a lot of sway regarding the value of contributions to make to public libraries, corporate contributions to library activities are likely to be part of a company’s marketing strategy, and not (merely) associated with a company’s acts of benevolence (Matteson, Musser, & Allen, 2015). Some researchers perceive these actions as enlightened self-interests, or cause-related marketing (McMullen, 2011). If carefully targeted, the actions of these corporations may cause goal ambiguity for the public libraries (I highlighted “goal ambiguity” as an issue to consider when pursuing financial diversification in Clayton County Public library). Nonetheless, if public library managers understand these issues, they could easily benefit from corporate donations as an alternative source of funding

Mergers and Partnerships

Merges and partnerships are the most viable strategies for diversifying the financial portfolios of public libraries. However, as Kostagiolas, Papadaki, Kanlis, & Papavlasopoulos (2013) observe, the biggest challenge associated with this strategy is the possibility of goal displacement. This challenge often occurs when private corporations incorporate their governance practices into public service organizations that do not subscribe to their philosophies. Therefore, such partnerships are more transformative to public service governance than they should be (Kostagiolas et al., 2013). This is why Winston (2013) says, “Corporate philanthropy is probably more closely aligned with immediate corporate self-interest, more professionalized in execution, and more transforming of the recipient organizations” (p. 33).

The above statement shows that process and structural changes are the greatest hindrances to the adoption of mergers and partnerships. This concern aligns with two views expressed by the respondents sampled in this paper. They said goal ambiguity and organizational processes are common challenges to the adoption of a financial diversification strategy. The impact of corporate board members in public library sponsorship mainly causes these process changes (Winston, 2013). Consequently, public libraries, such as Clayton County Library, seek financial diversification options that give them autonomy over their activities. Wells (2014) supports this view by saying that before such institutions receive funds from private companies; they need to state that their operational processes are non-negotiable. In line with this argument, in this paper, I have shown that organizational processes could hinder the adoption of financial diversification plans. Strong (2014) adopts a more diverse view of this view by saying that public service organizations need to, first, consider how financial diversification would affect their organizational practices before they adopt the strategy. If the strategy would affect existing organizational practices, they should consider how to align the goals of the organization and the goals of the partners. If it is difficult to align both goals, they should resist the pressure of seeking alternative financial resources, because they should not compromise their operational practices for any reason (Winston, 2013).

Foundation Grants

Seeking funds from foundation grants has the same ramifications as seeking additional funding through corporate financing. Observers support foundation grants as the best way of diversifying library funds because they promote professionalism when seeking alternative financial sources (Winston, 2013). Nonetheless, individual contributions and corporate contributions have a greater effect on the financial practices of public libraries because they are more likely to cause goal ambiguities and revenue volatilities (Winston, 2013). Williamson (2014) says this effect stems from the vast amounts of cash that they could use to leverage public libraries. In fact, often, these foundations give more than $1,000,000 in public library funding (Winston, 2013). Furthermore, they provide these institutions with monetary support throughout the year. The Ford and Carnegie Foundations could provide Clayton County Library with a lot of financial support because they specialize in providing such support to public libraries. However, Reid (2010) says public libraries need to be careful about the requirements associated with these grants because these foundations have enough power to influence the organizational practices of these public libraries, especially by announcing programmatic themes. Similarly, Clayton County Library needs to be aware of the effects of goal displacement when seeking foundation grants because such organizations require public libraries to adhere to new rules regarding how to use such funds (Winston, 2013). In fact, according to a study conducted by Elbert, Fuegi, and Lipeikaite (2012), more than 123 workshops revealed that the wishes of the foundations often define how public libraries would use the money received. It is also important for public libraries to understand that, often, foundations prefer to finance traditional programs in public libraries, as opposed to programs that promote innovative practices.

Another alternative for raising money, through foundations, is seeking library grants from uncommon sources of funds. For example, few libraries have explored the option of seeking library funding from private corporations and international organizations that offer grants (Lumos Research, 2011). Furthermore, there are grants for specific library functions that could help to ease the financial burden that Clayton County Library experiences. For example, tech grants for public libraries could provide financing for tech-reliant library services at Clayton County Library. The Institute of Museum and Library Services (2013) also offers similar financial support through technical and financial assistance to public libraries. Clayton County Library could exploit such avenues to improve its financial sustainability.

Expanding the Scope of Library Fines

Libraries have always charged users for damaging or losing, their property. This is a common global practice. Increasing such fines could improve the incomes of such libraries and deter more people from losing, or damaging, library property. Therefore, this recommendation is a straightforward approach for increasing library finances. Particularly, it does not present complex legal or operational challenges because existing legal and operational frameworks already accommodate them. Fundraising and corporate partnerships are also alternative sources of funding pursued by many libraries. Similarly, they do not present complex legal, or operational, challenges for public libraries because existing legal frameworks support them.


The modern portfolio theory has, for a long time, premised on the principle that risk equals volatility (Cottrell, 2011). This principle has largely controlled the language of the discussions in this paper. Moreover, it has set the stage for the obvious conclusion that seeking alternative sources of funding (besides public funds) is the best strategy for improving the financial stability of public libraries. The modern portfolio theory supports this idea by proposing that investing is inherently superior to relying on traditional sources of funds to finance the activities of public libraries (Cottrell, 2012). Since this paper outlines the practical views of working public library managers, it is incorrect to assume that the arguments presented in this paper are only theoretical or academic. Instead, it is important to appreciate how the key tenets of the modern portfolio theory affect the financial decisions of public libraries and other financial officers, such as wealth managers, investment firms, and financial planners. Therefore, most profit-making and nonprofit financial institutions use the ideas of the modern portfolio theory to make financial decisions (Francis & Kim, 2013). This approach contrasts with traditional approaches of money management, which focus on asset allocation (Cottrell, 2011). In the context of this paper, the different portfolios of investment included corporate partnerships, fundraising, expanding user charges, education funding, mergers, privatizations, and undertaking entrepreneurial projects outside the library field. These options were available to Clayton County Public Library as possible alternatives for diversifying its financial sources.

The literature review section of this paper emphasized the role of the resource dependence theory in understanding the importance of financial diversification in public libraries. The fundamental concept of this theory lies in the ability of organizations to acquire and maintain resources for financial posterity (Francis & Kim, 2013). However, the scarcity and uncertainty associated with national resources make it difficult for public libraries, such as Clayton County Library, to achieve their objectives, according to the resource-based view. Therefore, resources are inadequate and unstable. This concept requires public libraries to interact with resource owners (Francis & Kim, 2013). They may include corporations, charitable organizations, and even individuals. According to Koliba et al. (2011) “an open system does not only mean that it engages in interchange with the environment, but that the interchange is an essential factor underlying the system’s viability” (p. 166). In this regard, public libraries are not completely autonomous entities. Stated differently, they do not pursue desired ends at their discretion. Instead, environmental limitations constrain their operations because of their resource needs (Francis & Kim, 2013). Therefore, adopting new concepts of the modern portfolio theory would help in complementing the activities of these public libraries because their autonomy depends on resource availability (Koliba et al., 2011). Stated differently, public libraries that do not have adequate access to organizational resources are often highly dependent on the resource owners, thereby making them vulnerable to third-party interests (Francis & Kim, 2013). So far, Clayton County Library has depended on state resources for its survival. This dependence has made it vulnerable to the government. Thus, resource management has become a critical aspect of the library’s organizational practices. Referring to this fact, Winston (2013) says, “Complying with the demands of important resource providers, avoiding controlling demands via co-optation or acquisition of countervailing power, and avoiding dependence by maintaining alternative sources of key inputs are the major approaches to dependence management” (p. 16). This assertion outlines the purpose of this study because, in this paper, I focused on identifying alternative sources of funds to enhance the financial stability of Clayton County Library. In line with this goal, I highlighted the main factors to consider when modifying the locus of resource dependence for public libraries. Furthermore, I showed how to identify and respond to the main factors affecting the decision of such public libraries to embrace financial diversification.

Legally, adopting a financial diversification strategy at Clayton County Library would cause several legal concerns because there would be taxation issues, exemption concerns, and accountability concerns. Financial diversification would mean that public libraries make money as private companies do. In fact, they would be competing in business fields that private companies already do. Private companies should abide by a different set of legal restrictions, compared to their public counterparts (Düren, 2013). For example, they should file tax return forms. However, social welfare organizations do not have to comply with such requirements. Based on the findings of this paper, the current legal framework that outlines the financial practices of Clayton County Library is inadequate to accommodate commercially viable financial diversification strategies (Basri, Yusof, & Zin, 2012). Therefore, most of the diversification alternatives highlighted in this paper, such as privatization and mergers, are controversial because they would create legal hurdles in the financial management practices of public libraries. Therefore, for public libraries, such as Clayton County Library, to explore financial diversification options, there needs to be a comprehensive overhaul of the current legal framework of public library management. Furthermore, there needs to be a long-term assessment of the implications for adopting new financial alternatives for public libraries. Particularly, taxation issues would stand out as a key area of concern for policymakers because public institutions need to have a streamlined policy framework that would shield them from legal consequences if they contravene existing operational practices of public libraries to increase their revenue (Massis, 2011).

Although this paper highlights key issues to consider when adopting financial diversification in the Clayton County Library, scholars need to do more research to understand the impact of legal diversity across different states and explain their effects on the adoption of financial diversification in public libraries. Such a study would reveal legal inconsistencies that appear across different states. It would be possible to have a broader understanding of the implications of adopting a financial diversification strategy across other states and public libraries if we use such findings (besides Georgia and Clayton County Library) (Woodby, Williams, Wittich, & Burgio, 2011). Lastly, concerning the study design, it would also be prudent for future researchers to use random sampling to understand the views of a wider scope of library directors about the research questions. This analysis would further expound our insight regarding imprecision because a study with more participants and an unbiased research sample would be more valid and reliable.


In this paper, I set out to investigate if a financial diversification strategy would enhance the financial stability of Clayton County Library. Similarly, I sought to understand how operational challenges and legal issues would affect the adoption of this strategy. Using a qualitative research approach, I affirmed that legal issues, goal ambiguity, organizational practices, and the difficulty of measuring performance are the main issues to consider when adopting a financial diversification strategy at Clayton County Library. Legal issues emerged as the main concern in this regard. Stated differently, public libraries today operate within a constrained legal framework that defines the scope of activities they could engage in and the associated forbidden actions as well. Since Clayton County Library is a social welfare organization that ascribes to the principles of public service management, adopting a financial diversification strategy, without altering existing legislation would amount to a contravention of existing legal frameworks that guide public service management. This is an illegal act. Based on existing legal statutes, it is difficult for public libraries to engage in commercial activities that are beyond the scope outlined by the present legal framework. This paper has also shown that goal ambiguity is another hurdle that complicates the adoption of a financial diversification strategy at Clayton County Library. Particularly, this paper draws our attention to the differing goals surrounding the management of social welfare services and the management of public services. While one goal focuses on promoting the “public good,” the other focuses on promoting shareholder interests. Financial diversification options highlighted in this dissertation have this ambiguity. The differences between the management practices of public organizations and private organizations also highlight an organization’s structure as another hurdle/issue that requires consideration when adopting a financial diversification strategy at Clayton County Library. Most operational practices of Clayton County Library focus on service delivery. Furthermore, since most of the funding sources attributed to Clayton County Library come from state and municipal authorities, there is a clear structure of how to use such funds. However, if the public library includes alternative sources of funding to supplement its financial obligations, it would complicate the structures applicable for managing library finances. For example, in this paper, I have highlighted the requirements needed by foundations and corporate sponsors to give financial grants to public libraries. In the same way, I have affirmed that most of these institutions could exert undue influence on public libraries, to the extent that they could cause structural changes in these institutions. Based on these factors, this paper proposes that Clayton County Library adopt financial diversification strategies that do not cause legal, or structural, conflicts. Expansion of library fees, foundation grants, corporate sponsorships, and individual sponsorships are possible alternative sources of funds that fit this profile. However, the institution needs to make sure that they protect the structural integrity and mission of the institution when seeking these alternative sources of funding. Lastly, advocating for more allocation of financial resources to public libraries could alleviate the financial challenges that public libraries, such as the Clayton County Library, experience. The first step of this process is helping people to understand the value of public libraries. By doing so, they will create a strong grass-root pressure that would prompt policymakers to understand the importance of public libraries in society. Consequently, the policymakers would allocate more funds to these institutions. Collectively, adopting alternative financing strategies that do not draw a lot of public attention regarding the legal or operational complexities of financial diversification are the best alternatives for improving the financial sustainability of public libraries.


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