Revenue sharing

Local/national fundraising ‘rules of the road’ needed

By Dru Sefton

PUBLIC MEDIA FUTURES While a local public broadcasting station traditionally romances big-donor prospects in its locality, it can occasionally find itself in a jealous spat with a national network courting prospects in its nation.

It happened recently in Denver. In a Jan. 27 letter, Doug Price, president of Rocky Mountain PBS, chastised top PBS officials for the PBS Foundation’s “uncoordinated personal contact with three of my largest donor prospects.”

The “emerging development practices of PBS nationally,” including online solicitation, are “unacceptable” and “no longer in alignment with our interests at the local level,” Price said in the letter, which he circulated to Major Market Group station leaders. He and his board in Denver are asking the MMG to support restrictions on PBS fundraising.

By Feb. 2, the PBS Foundation Board had voted to reaffirm its original 2006 protocols, which stress a collaborative approach to fundraising. In a Feb. 9 memo to stations, the foundation said it will work with stations to ensure that “any communication with potential funders is done in an appropriate, informed and coordinated manner.”

Some station leaders also remain wary of PBS’s online fundraising initiative called Prosper, which had a soft launch six months ago. Through December, the PBS effort had raised $200,000 and returned all of it to member stations, according to a memo to station execs from Jason Seiken, PBS senior v.p. of interactive.

But Steve Bass, president of Oregon Public Broadcasting, said his concerns about Prosper “remain unabated,” adding, “My fundamental belief is that the closer a cultivation process is to the local station, the better.”

“There’s a broad range of thinking” on national versus local fundraising, said Tom Thomas of public radio’s Station Resource Group. At one end of the spectrum, some local TV pubcasters question the role of PBS in any fundraising at all; others think the network ought to do far more.

“In some ways, this happens in every industry where national organizations and local members or affiliated organizations serve communities,” Thomas said. “It’s inherently difficult territory.”

Local/national organizations as diverse as the Sierra Club, YMCA, Boy Scouts and the Presbyterian Church have to make their ways through the same terrain. “They all share that notion of, ‘How do you most effectively leverage both a shared collective national identity with the reality that local organizations deliver the valued service that’s associated with that?’”

NPR had a head start on cooperative fundraising. While PBS did not establish its foundation until 2005, the NPR Foundation began tackling these issues in 1992.

There have been missteps, Thomas said. In the early days of the NPR Foundation, “donors were solicited in various communities with absolutely no heads-up alert to stations, let alone collaboration, much to the irritation of stations,” he said.

But radio fundraisers have moved toward détente, several sources say. The NPR Board established a development committee in November 2009, now chaired by Betsy Gardella, president of New Hampshire Public Radio.

“My sense of it is, there’s been a real sea change in the relationship between stations and NPR, and a new kind of appetite for collaboration” on development, Gardella said. Before Vivian Schiller arrived as NPR president in January 2009, “there was a tremendous lack of trust, and that’s changed,” she said. “It’s still not 100 percent, but there’s a sense of openness now from g.m.’s from all sorts of markets to listen, to think about the work and what joint fundraising might mean.”

Radio policymakers found a “pathway through” the dispute, Thomas said, which “cooled some of the tempers and actually contributed to successes.” First of the vital elements in the agreement was “the absolute importance of ongoing candid conversation among the parties,” he said.

Gardella agreed: “That communication piece has really improved. A ‘just trust us’ approach is probably not going to be successful. Major-gift fundraising under any circumstance requires everyone to be highly engaged.”

Also essential, Thomas said, are guidelines drawn “at a very broad-brush level” for “how the various parties expect each other to behave.”

Sometimes the best relationship involves dual solicitation — a coordinated ask by local and national reps. “Most donors I’ve been involved with . . . understand the cascade of public media impact, and how local, regional and national harmonize together,” Thomas said. “Donor intent must ultimately drive where dollars end up.”

Robert Altman, a longtime pubcasting development pro who headed the CPB-backed Major Giving Initiative for public TV (2004–08), agreed. “No amount of rulemaking or strategy or tactics or agreements” can drive the efforts, said Altman, who is now president of WMHT in Albany, N.Y. “We can have all those in place, but the bottom line is, to raise the most money for the system overall, we have to listen to donors and follow their wishes.”

“Donors are sophisticated,” said Mark Vogelzang, interim director of the NPR Foundation in 2009 and now president of Maine Public Broadcasting Network. “They have intention and capacity that often far outpace what we as member stations can offer in terms of the ability to give.” Say a station’s budget is $2 million. “If a donor is capable of giving $1 million or $2 million as a special or annual gift, they calibrate that very carefully,” he said. “They realize a gift of that magnitude would not be appropriate to that institution,” but would fit nicely into a large national initiative. “We want to give them as many opportunities as we can to give support,” he said.

“When a donor has the opportunity to give nationally,” said Jon Miskowski, development director at Wisconsin Public Television, “and that donation is well cultivated and well stewarded, it strengthens local stations.”

So while rules of the road in this space are necessary, they should be flexible enough to fit the donors and situations. “A lot of this work doesn’t have bright lines — it’s more like driving on country roads than interstates,” Thomas said.

Working to establish protocols

In the wake of Price’s letter, those potential rules of the road for both major-gift fundraising and online solicitations will be on the agenda at the next Major Market Group fly-in meeting in March in St. Paul, Minn. “All of us want to optimize giving,” said MMG Executive Director Dennis Haarsager.

Price declined comment for this story, but his letter detailed his concerns. The three major- donor prospects approached by the PBS Foundation without his knowledge included a former station board chair, Price wrote.  Several members and contributors also “have received a carefully designed [PBS] newsletter with the strategic intent of cultivating donors with little or no respect to their relationship with local stations.”

“PBS has apparently made a decision to go into direct competition with its owner members” using contacts gathered via PBS.org, Price wrote.

The Denver station president also implied that PBS’s online work is designed to benefit the network more than the stations: “The chair of our strategic issues committee, who runs a sizable technology consulting practice that specializes in Web design and communication, has reviewed the newsletter and other elements of PBS Interactive and assures me that the architecture you have deployed is not passive architecture but active architecture designed to intentionally achieve an outcome of driving traffic and contributions to a national hub.”

A PBS memo to stations Feb. 7 said the network has added to its website a pop-up notice to encourage visitors to declare their favorite stations. PBS also said it would conduct a webinar for station staffers later this month to discuss best practices for working with Prosper.

Bass of OPB has specific concerns about Prosper. While online donors are expected to share their full names, addresses and credit card numbers on PBS.org, they may opt out of sharing some of that data with stations. OPB received complete contact information for only 11 donors from the PBS.org effort, Bass said, and another handful gave only their last names and gift amounts. “This makes it hard in some cases to know if these are current, lapsed or new donors, and we have insufficient information to really drive a relationship,” Bass said.

The station garnered “a total $1,500 and change” from the first Prosper payout, with the average gift at $45, “which is low by our standards,” Bass said. “Our membership folks see this as being yet one more way that they have to process membership gifts in a different way than we normally do, and there’s very little money here.  Right now, it’s more hassle than it’s worth.”

In his letter, Price wrote that it is “the fiduciary responsibility of our management team and board to proactively address the deficiencies we see that are building obstacles to our own future success.”

Price concluded: “We will seek specific redress of our concerns about your practice of competing for local dollars with local stations and will ask that all interested stations and the PBS national board work to develop specific policies and practices that you and your management team will adhere to in order to rebuild the trust and collegiality that has been the foundation of PBS’s past success.”

“PBS’s only goal is to help stations build both contributions and donors through effective engagement,” Kerger said in a statement to Current.

“We believe there is great potential for the system in this arena if we work closely together with key stakeholders,” she said, including station leaders and the WGBH-based Contributor Development Partnership. “Coming out of our PBS Board meeting and leading into next month’s MMG meeting, we hope to outline a plan regarding how we should work together. Like Prosper itself, this plan will continue to evolve.”

Haarsager said members of the Affinity Group Coalition are working to establish guidelines for national fundraising. He hesitates to say that “rules” should be set, because that implies a sanction if they’re not followed. “But protocols or procedures need to be established and published,” he said. “That’s appropriate, and that work is under way.”

The Strategic Planning Advisory Group on the PBS Board is also examining the issues.

PBS Foundation Chair Mary Bitterman and Kerger, in their joint letter reaffirming national fundraising protocols, said that the foundation board and staff members “will continue collaboration with member stations regarding approaches to fundraising prospects in their respective communities. We want to work with member station colleagues to ensure that any communication with potential funders is done in an appropriate, informed and coordinated manner.”

A good example of the power of a national gift, Bitterman told Current, is the $800,000 from the Anne Ray Trust to support PBS’s work in the arts (Current, April 5, 2010). The trust’s patron, agricultural-commodities heir Margaret Cargill, “wanted funds to go to PBS for purposes she felt important — culture and the arts,” Bitterman said. The resulting PBS Arts Fall Festival reached more than 40 million viewers through local stations. “I think stations found that content valuable,” Bitterman said.

She stressed that the foundation has been “moving very deliberately and slowly” with its fundraising efforts.

Jack Galmiche, president of Nine Network (KETC) in St. Louis and a PBS Board member, attended the Feb. 2 meeting at which the foundation board reaffirmed its original protocols. “In that meeting, you could clearly hear that PBS has no interest in interfering with local station fundraising,” Galmiche said. “PBS said, ‘If a station tells us it doesn’t want us to come into a market to call on a foundation or donor, we won’t.’ It’s that black-and-white.”

With both local stations and national organizations hit hard by the recession and various revenue drops, “what everybody wants to do is make things better,” Bitterman said.

There are success stories of national and station fundraising working in harmony.

WFYI in Indianapolis has an ongoing relationship with the local Lilly Endowment, the charitable arm of pharmaceutical giant Eli Lilly and Co. Station President Lloyd Wright said that foundation has made lead contributions to station capital campaigns and assists pubcasting in the state and at the national level, giving long-term funding to programs such as WNET’s Religion & Ethics Newsweekly and Ken Burns’s documentaries.

“Ultimately it comes back to what the donor is interested in,” said Wright, a member of the task force under former PBS President Pat Mitchell that guided establishment of the PBS Foundation. “The station needs to be in a position to pursue a relationship with a major donor, but that donor may well be interested in national initiatives.” Often, he noted, national and local projects dovetail, such as the CPB-backed American Graduate high-school graduation advocacy outreach.

Sharing baked into a “trust”

At WGBH, the Masterpiece Trust, which has raised more than $1 million since January 2011 to support the popular PBS drama strand, was developed with advice from stations and a plan to share revenues, said Ellen Frank, director of major gifts at the station.

“This was envisioned as a collaborative effort with stations from its very genesis,” Frank said, “an opportunity to have stations raise more funds in a local-national partnership.” She and WGBH President Jon Abbott spoke with station execs nationwide to determine how it would work. The trust, despite its name, is not an endowment; it spends down its income.

“Our goal is to have stations help us identify prospects,” Frank said, for gifts above $25,000. If the station brings WGBH a donor, it receives 50 percent of the resulting gift. If a donor contacts WGBH directly to donate to the trust, Frank contacts that contributor’s local station, and it gets 25 percent. “And from then on, we work together on stewardship, and, hopefully, subsequent gifts are then split 50-50,” she said.

Again, the donor decides where the money goes. “If at any time that person has a strong preference that 100 percent of the money should stay at Masterpiece, we’ll have that discussion,” Frank said. But that hasn’t yet happened.

Currently, the bulk of Masterpiece Trust gifts have come from the Boston area. Six stations have brought in contributions and split those donations; Frank declined to discuss specific figures.

As pubcasters work through these issues, Thomas said, all the entities will have roles in approaching “thousands of individuals, families and family foundations with significant giving potential. I believe the upside can be extraordinary.”

EARLIER STORIES

PBS received $800,000 for its arts initiative, plus $50,000 for programming over five years, from billionaire “silent philanthropist” Margaret A. Cargill via the Anne Ray Charitable Trust, named for her mother, 2010.

In May 2004, the NPR Board’s Membership Committee recommended clarifying board policy on the major gift solicitation, giving leeway to the NPR Foundation. That updated the 1983 Cahill Amendment to NPR Board policy, which barred the network from conducting any “direct public solicitation for contributions.”

A 2003 CPB-funded McKinsey & Co. study found that pubTV stations stand to gain as much as $20 million to $35 million in net revenue by securing more $1,000-plus donations.

The $200 million-plus bequest by Joan Kroc, whose late husband, Ray, founded McDonald’s, is the backbone of the NPR Foundation.

Major gift fundraising gets major attention, 1999.

Growing your major gifts in 10 steps.

RELATED LINKS

Resources developed for CPB’s Major Giving Initiative between 2004 and 2008  remain online at a website created by development pro Jim Lewis and his Lewis Kennedy Associates.

Comments, questions, tips? sefton@current.org

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