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Steve Proffitt

Steve Proffitt

Posted April 10, 2009 | 12:42 AM (EST)

You Couldn't Save NPR if you Wanted to


You're probably a fan of All Things Considered and Morning Edition. You may contribute to your local public radio station. And when you heard NPR was in financial trouble, you figured you'd be willing to contribute a few extra bucks to get them out of a jam. You might have thought about giving NPR money, but you can't. At least not directly. To understand why is to understand a bit about the remarkable amount of fear and antipathy that pervades the public radio system in this country.

But first, here's a quick overview of NPR's financial problems.

In the fall of last year, NPR management told its Board of Directors that it was facing a budget deficit. At first, that deficit appeared to be manageable: less than $2 or $3 million against an annual operating budget of more than $160 million. But as weeks went by, the situation became more problematic. Revenue projections were revised downward, and by December the shortfall grew by an order of magnitude to more like $23 million. The network responded by canceling two programs (including one I worked on, Day to Day) and firing 64 staffers, among them many veteran journalists.

In March, NPR President Vivian Schiller told staffers and stations that the network "continues to see downward pressure on just about all our revenue sources." She noted that the December cuts were not enough to address the expanding shortfall, and indicated more jobs would be eliminated and other cut-backs would begin in "short order." Since then, several senior managers have been laid off, but, so far, no program cuts or major staff lay-offs have occurred.

One proposed solution to NPR's cash crunch - hold a national fundraiser. NPR veteran Susan Stamberg raised hackles when she suggested such an idea to a Washington Post reporter.

In an internal company blog, NPR President Schiller argued that even if the company could raise funds directly, it's not a good idea. She noted that most local station are hurting, and "we need to help them." And she indicated a national fundraiser would only be a one-time solution. She has said repeatedly that supporting your local station is the best way to support NPR.

Under NPR's policy, the stations that broadcast its programs "own" the listeners, and part of that means they have the exclusive right to dun them for contributions. This idea that stations own the listeners has been a problem for NPR as a network as digital delivery altered the broadcast landscape. Stations were vocal in opposing NPR's plans to put its flagship programs on Sirius satellite radio, they have prevented NPR from podcasting All Things Considered and Morning Edition, and they have been critical of NPR's efforts to develop its web site as a platform to distribute audio directly to users. Case in point, this letter, sent from Los Angeles station KCRW's longtime manager Ruth Seymour to Susan Stamberg (via LA Observed). Meanwhile, many stations have been aggressively moving into digital distribution, creating podcasts, alternative streaming music services and other innovations that make sense in a digital age. A hamstrung NPR has been struggling in all these areas. The network understands that it needs to reach listeners on new platforms and new channels, but it has never had a business plan or strategy that would pay for itself. Or one that would satisfy its customers, the stations, which not only provide the lion's share of its revenue, but also control its board of directors.

Just a few weeks ago, NPR announced their audience had hit record highs. If direct contributions were allowed, and each listener just gave one dollar, it would erase all the network's current fiscal woes. If each listener coughed up ten bucks, that would more than match the gift Joan Kroc gave NPR in 2003. By the way, if you are wondering what happened to that money - the Kroc gift specified that the majority of the cash be invested to serve as an endowment. But in the down market, the Kroc dough isn't kicking off any returns. Still, the board did allow NPR to draw $15 million from reserve funds to close the gap, and gave them immediate access to an additional $10 million from the Kroc fund, with another $7 million in Kroc money for next year. Presumably those reserve funds will have to be replenished at some point.

Actually, there is a way you can help NPR directly. While the charter prohibits soliciting listeners for small donations, it doesn't preclude NPR from pursuing major gifts. So, if you avoided Bernie Madoff, moved your money out of equities a year ago, eschewed real estate investments and are sitting on a nice, big bundle, please feel free to donate some of your stagnating millions directly to NPR. Get out your checkbook. You can probably get them to name a studio after you.