Revenue Model - grgcnnr/LoT GitHub Wiki

This page presents some of the options for self-generated revenue — membership fees, borrowing fees (koha), or a hybrid. These are presented as options for the steering group to consider, not fixed policy.

The revenue model affects:

  • Accessibility — fees can create a barrier for lower-income residents, which runs counter to the LoT's core purpose
  • Sustainability — some earned revenue reduces dependence on grant funding over time
  • Administration — more complex fee structures require more admin and a more capable booking system
  • Member behaviour — different models create different incentives (e.g. annual members are more invested in the organisation; pay-per-use members are more transactional)

1. Free to Borrow

The library is free for all residents to use, with no membership fee or borrowing fee.

Anyone can register as a member (free) and borrow items at no cost. Funding comes entirely from grants, sponsorship, and donations. A bond may be charged for larger items.

Pros:

  • Maximum accessibility — no financial barrier whatsoever
  • Simple to administer — no payment processing needed
  • Strong equity case for funders
  • Lower admin burden for volunteers

Cons:

  • Fully dependent on external funding — no earned revenue
  • No financial "skin in the game" for members — potentially higher rates of late returns or damage
  • Harder to demonstrate financial sustainability to funders over time
  • Cannot reduce grant dependency over time

2. Annual Membership Fee

Members pay a small annual fee to access the library. Borrowing is then free (or very low cost) for members.

How it works: Register online, pay the annual fee, receive a membership card. Browse and borrow items for free (or at a small additional charge for high-value items) throughout the year.

Pros:

  • Modest earned revenue that grows with membership
  • Creates a sense of community ownership — members have "bought in"
  • Common and well-accepted model across NZ and internationally (Auckland LoT, London LoT)
  • Simple to administer once setup
  • Membership numbers become a useful impact metric for funders

Cons:

  • Small annual barrier — may deter some lower-income residents
  • Requires a membership management system

Typical fee range (based on similar NZ/international organisations): $20 – $60 per year for individuals; family memberships may also be offered. Concession rates for community services card holders.

3. Pay-Per-Borrow

Members register for free and pay a small fee each time they borrow an item.

Each loan costs a small amount — either a flat rate or varying by item.

Pros:

  • Most accessible for infrequent users — only pay when you use it
  • Could generate reasonable revenue if borrowing volumes are high
  • Fair — you pay for what you use

Cons:

  • More complex to administer — every transaction involves a payment
  • Higher IT/payment system requirements
  • Less revenue predictability than a membership model
  • Borrowers need to factor in a cost every time they borrow — may reduce usage

Best for: High-volume libraries where casual, infrequent users are a significant part of the user base.

4. Hybrid (Membership + Item Fees + Labor in kind)

This is the model used by the Nelson community toy library.

Members either:

  • Pay an annual fee and can borrow at a reduced rate or free.
  • Sign up for a free membership, are asked for a larger koha per item
  • Borrowers can subsidise their membership/borrowing cost by committing to a certain amount of volunteer hours

High-value or specialist items may carry an additional bond regardless.

Pros:

  • Balances accessibility (low membership cost) with sustainability (some per-use revenue)
  • Can implement tiered pricing (standard vs. premium items)
  • Common in UK libraries of things

Cons:

  • Most complex model to communicate and administer
  • Volunteers may be reluctant when it is their turn to contribute.