Phone volunteers for KEXP pledge drive, 2008

When revenue growth lagged at Seattle’s KEXP, fundraisers emphasized lower pledge levels and marked their best-ever pledge day Oct. 10. Pictured: Sarah Otto and other volunteers at work. (Photo: Kim Ervin.)

Nervous stations advised: ‘Don’t slow down at all’

Originally published in Current, Oct. 14, 2008
By Karen Everhart

With the world’s financial markets stuttering to a halt, development veterans advised stations to stay the course with their fundraising activities, both on-air and off.

“Do not plan to fail,” suggested Jay Clayton, a fundraising consultant with Development Exchange Inc., during a conference call “pep rally” Oct. 7 [2008] for public radio stations going into pledge drives. “Don’t assume that your givers can’t or won’t give, and don’t feel guilty about asking for listener support.”

Last week, several public radio stations reported strong results from the earliest batch of fundraisers; their mid-September on-air pitches aired alongside news of the stock market’s downward spiral and controversy over the government’s $700 billion bailout for struggling financial companies. WBUR in Boston; KERA in Dallas; WAMC in Albany, N.Y.; WSHU in Fairfield, Conn.; and Four Corners Public Radio (KSUT) in Ignacio, Colo., reached or exceeded their fundraising goals, despite the economic gloom.

“In the early returns, you always hear first from those who do well,” cautioned Doug Eichten, president of Minneapolis-based DEI. Regarding the stations’ pledge prospects this fall, he said, “There is plenty of nervousness, as there should be.”

The full effects on public broadcasting’s other revenue streams aren’t known yet, but specialists in station finances advise pubcasters to strap themselves in for what could be a rough ride.

Underwriting, the income stream that’s most sensitive to dips and upticks in the corporate world, may have taken a big hit last month, although solid data from the first quarter of fiscal year 2008-09 won’t be available for a few more weeks, according to Marlene Schneider, DEI corporate support coordinator, who tracks revenues for 10 stations in 25 top markets. “Anecdotally, we’re hearing that it’s worse for these stations than for those in smaller markets,” she said. Large-market stations are losing sponsors and having a hard time making new sales.

Underwriting revenues in July and August were “not terrible,” Schneider said, “but in September, we were starting to see stations take hits.”

Cuts in government and institutional support also loom. As state governments look to cut their budgets because of declining tax receipts, pubradio stations licensed to universities will have to adjust their spending.

“Most public radio stations are still owned by universities or institutions of some sort,” Eichten said, and those licensee relationships add “an extra layer” of financial pressure. “A station may be doing fine, but the state organization or institution they’re hooked to does across-the-board cuts,” and the station must reduce spending accordingly.

The best advice for fundraising in a down economy, Eichten said, is to “stick to basics, work harder and be more patient.” He worries about the tendency of pubradio veterans to depend too much on pledge drives.

“It happens a lot as people get more nervous about how a pledge drive will go,” Eichten said. “They take their eyes off the ball in direct marketing and online funding, and they focus their resources too heavily on pledge drives.”

“I understand it, but a diversified, integrated fundraising program will rule the day,” Eichten said, especially in times like these.

“Right now this is a worse recession or economic crisis than any of us have ever seen since we’ve been fundraising,” said Robert Stein, a principal in the consultancy MajorGiving.com who has worked in fundraising for more than 25 years.

“There’s been a huge, precipitous drop in the stock market, and the credit crunch comes on top of an already weakening economy,” Stein said. “No one really knows and can tell you what’s going to happen — either with the economy or philanthropy.”

Despite the uncertainty, Stein advises stations not to change their fundraising plans. “This is normally a time when you’re very aggressive in direct mail and personal solicitations,” he said. “I wouldn’t slow down at all. You’ve got to proceed as if nothing has happened.”

“Major-giving people are learning a lot from their conversations with donors,” Stein said. “When you have those conversations, they’re going to tell you what’s going on.”

Stein makes an exception for stations that are planning or running capital campaigns. “Right now, I would be looking at rearranging the timeline. You can expect a rather significant drop in gifts for the near future.”

Assessments of the full financial impact on public broadcasting won’t start to solidify until early next year, Stein said, after stations complete year-end fundraising. As donors get in a holiday spirit of philanthropy or make charitable gifts to reduce their tax bills, the fourth quarter of the calendar year brings in the lion’s share of major gifts, he said.

“Be aggressive” while you can

For the member revenues, however, pubradio will be able to read its vital signs by the first week of November, much earlier than normal, according to John Sutton, a research and marketing consultant based in Annapolis, Md. The general election and timing of this fall’s Jewish holidays limited the dates available for pubradio fundraisers, and stations didn’t have the option of postponing their drives to avoid the bad economic news, Sutton said.

Though national and regional economic prospects will surely affect giving, Sutton said, he advised stations not to “fundraise for a down economy” by linking appeals to the bad financial news. “Spend prudently, but raise as much money as you can.”

“Be as aggressive as you can possibly be with your fundraising right now,” Clayton advised during the DEI webinar. “Be out there while you know you can, because, while things may seem bad now, you have no idea what’s going to happen next.”

“My advice is to stick to the basics, remember the value that NPR delivers in a time like this and don’t be tentative in your fundraising,” said Michael Steffon, director of marketing at WBUR. “You need to have trust in the listeners, that they truly value what we do and recognize that there couldn’t be a more important time for people to come to us for news and information.”

WBUR raised nearly $1.1 million in its Sept. 23-Oct. 3 campaign, about 15 percent more than last fall. Its pledges averaged $109 — a 16 percent increase, said Corey Lewis, station manager. The station had been scheduled to launch its drive Monday, Sept. 22, but kept pitches off the air as the House of Representatives voted down Treasury Secretary Henry Paulson’s rescue package for Wall Street and the stock market took a punishing plunge. “We pushed it back a day out of respect for the climate and the news that people needed to get,” Lewis said.

Colorado’s Four Corners Public Radio, an NPR News and contemporary–music-mix station with a signal reaching northwest to Durango and south into New Mexico, ran its campaign Sept. 15-20, the same week that investment firm Lehman Brothers filed for bankruptcy and the Federal Reserve rescued insurance giant AIG.

The station used DEI’s scripts for “fundraising in a down economy” and ran pre-produced listener testimonials to bridge airtime between news and pitch breaks, according to Beth Warren, executive director. Jokes about Lehman Brothers mugs being sold on eBay added some levity to the pitches, she said in an e-mail.

Four Corners’ campaign, including a pre-drive direct mail and online pledge appeal, raised $104,000, 10 percent more than last year. Warren said power upgrades of two translators helped bring in “lots of new members,” and lapsed members also responded. “Basically, people were just very generous in spite of it all,” she wrote.

Warren and execs at two other stations said they followed DEI’s advice and encouraged listeners to pledge at any level.

“We are changing our messaging so that we can speak more specifically to new members,” said Tom Mara, director of Seattle’s KEXP, a contemporary-music station with a big online audience.

The station’s average pledge has grown steadily to roughly $150 over the past five years, helping boost KEXP’s total revenues 14 percent each year from 2005 to 2007, Mara said. But the station’s revenue-growth rate slipped to 10 percent this year.

To change that dynamic, Mara said, KEXP made new-member recruitment one of its goals for its drive, which concluded Oct. 10. On-air pitches offered memberships at $35 but also suggested giving “whatever you can.”

The drive got off to a slow start but gained momentum and set a new record on its final day. “It was the strongest membership-drive day in the history of the station,” Mara said. “The stock market was all over the place, but the phone lines were always full. It was just extraordinary.” KEXP raised $509,000 in listener contributions, $5,000 above goal.

Stations coming out of drives shouldn’t think their work is done, Eichten said. He advises stations to create year-end appeals, putting their message before donors during the holiday philanthropic season. “This is the time they think about giving to other charities and nonprofits,” he said.

Individual donors, “the folks who know and love” their public radio station, “will cut back in what they give,” Eichten said, “but not necessarily in what they give to you.”    

Web page posted Oct. 20, 2008
Copyright 2008 by Current LLC

EARLIER ARTICLES

Kentucky, other states pass on their fiscal pinch to pubcasters, June 2008.

Seeing "sustained" downturn, MPR predicts staff cuts, June 2008.

The view from July'08: Recession or not, this won't be fun.

3MG commentary by Jay Clayton and Melanie Coulson: 3 million givers: Necessary drive for reachable goal. NPR's Dana Davis Rehm applauds 3MG campaign.

LINKS

Jim Taszarek's workbook, Sales Strategies for a Down Economy, presented at PRDMC.

Pubradio's coordinated fall pledge drive runs Oct. 18-24, according to DEI.

Audio and slides from the DEI "pep rally" are posted on this Ning social networking site created for DEI's 3MG campaign.

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