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Pledge woes and membership slide
on agenda of next PBS ‘summit’

Originally published in Current, March 26, 2001
By Steve Behrens

Nobody in public TV is all that happy about the field's No. 1 necessary evil.

The pubcasters who want to protect their image are embarrassed by its rampant merchandising. The ones unnerved by public TV's shrinking membership want pledge to help stop the decline. And the station execs desperate for cash flow are steamed whenever pledgers don't find a blockbuster.

The major families of complaint will all be represented, most likely, among the 40 or 50 pubcasters invited to PBS President Pat Mitchell's next "summit," April 20-22 [2001], to look at pledge drives and the troubled membership scene for public TV. The meeting will be held at the Sundance Institute in Utah, the site of two earlier Mitchell summits on programming.

Looming in the background: a quiet slippage in the numbers of public TV members (table at right). Between 1993 and 1999, stations suffered a slow net loss of 376,000 members, or 7.4 percent, according to CPB's latest comprehensive financial report. During the same period, public radio gained 740,000 members.

More recent losses are scarier. A group of 60 public TV and TV/radio licensees saw a 3.4 percent net loss of members in a single year, between 1999 and 2000, says John Mastrobattista of Target Analysis Group, a Cambridge, Mass., firm that crunches data from hundreds of stations. A corresponding group of radio stations was up by the same percentage.

As usual, the pain isn't spread evenly. In a group of 81 public TV stations, 52 lost ground in membership between 1999 and 2000. Thirty lost more than 5 percent. Only 19 gained membership.

Though some stations report strong pledging this month, the drive won't help much on a national basis. Incomplete data from stations as of March 20 indicate the number of pledges was rising, but by just 1 percent over March 2000. A smaller sampling of stations that provided comparable data for both years showed a loss of 14 percent in numbers of pledges.

It's easy to overlook the membership slide, however, because members and pledgers have been such good providers, as measured in dollars. Subscribers/members remain public TV's biggest revenue source, amounting to 24 percent in fiscal 1999, according to CPB. And membership dollars have been growing—5 percent in fiscal 1999—because stations are pushing up the average gift with high-ticket pledge premiums.

More giving, fewer givers

Public TV's revenues from individual giving (pledge included) continue to rise after 1993, while membership fell. Source: CPB.

.. No. of members (millions) Dollars given (millions)
1986
4,327
$199.7
1987
4,466
$221.9
1988
4,675
$242.2
1989
4,927
$263.4
1990
4,879
$273.2
1991
4,904
$285.8
1992
4,975
$296.0
1993
5,033
$297.3
1994
4,889
$297.9
1995
4,938
$311.8
1996
4,855
$327.5
1997
4,673
$331.9
1998
4,653
$341.2
1999
4,657
$358.8

 

 

We're sending the wrong message with premiums
Mike Soper, a former top PBS fundraiser criticizes the transformation of pledge drives into home shopping.

..

Non-tax-based income now exceeds 60% of system total
More on the latest CPB report.

 

Weak pledge results can be disastrous where stations rely on the cash flow. In Los Angeles, KCET laid off 15 staffers and decided not to fill 11 other positions last month, blaming poor membership revenues (article at right).

The pressures also may have ejected PBS Vice President Alan Foster from his hot seat at PBS—the most hit-oriented position in public broadcasting, responsible for the network's three-times-a-year packages of SIP (Station Independence Program) pledge specials. Foster resigned early this month, later issuing a goodbye e-mail thanking colleagues at stations. "I intend to rebuild my body, psyche and sense of humor over the next couple of months," he wrote. Foster was not available for comment. Development execs at stations assumed he ran screaming from the job.

"It's a very stressful job—you have so many masters," said Roberta MacCarthy, development chief at WGBH. "It's a burn-out job."

Complaints circulating on the PBS Express e-mail system last year were "ugly and small-minded," observes Rus Peotter, director of marketing and development at Maine Public Broadcasting. "You can take only so many arrows before you decide to go do something else."

"We're going to tackle this—head on"

Next month's summit will deal with far more than development officers' routine complaints about pledge specials that don't work. Many programmers and general managers also are unhappy. A survey by the PBS Programming Policy Committee last year found that 61 percent of station managers were dissatisfied with pledge programming. In focus groups, the committee's annual report said, "Disappointment in the performance of SIP programming was nearly unanimous."

The committee heard station leaders worrying that "guru TV" self-help specials hurt public TV's reputation. They said "the transactional nature of pledge programming provides only short-term value; it provides no long-term value—the benefit of lifetime membership."

The topic came up at an earlier Sundance summit last year, says Mary Bitterman, president of KQED in San Francisco. Pubcasters "really called into question whether we want to continue pledge programming as we know it today." She expects a wave of experimentation with pledge.

The questions gripped Mitchell. "We're going to tackle this—head on," she told Current. "We have to, because we know the way we're doing it now is not producing long-term value."

Robert Altman, senior v.p. of development at PBS, said in a memo the summit will kick off a review of membership problems and options for:

  • increasing net revenues,
  • increasing stations' number of members,
  • improving public perception of public TV fundraising, and
  • using new technologies for fundraising.

The evaluation will conclude in time for the combined PBS Development Conference and Fall Planning Meeting in October.

Zero growth: the best you can hope?

The member decline is so threatening to public TV that Kathleen Pavelko, president of WITF in Harrisburg, Pa., believes that the most important measure of Pat Mitchell's performance should be her success in stopping the loss.

Stations actually are running to stay in place. David LeRoy, the audience and pledge-drive researcher, sketches the challenge: When one midwestern station sends out its renewal letters, 85 percent of the list re-ups. The remaining 15 percent have moved, died or simply lapsed. And though the station wants to replace those lost members, mailings and pledge don't always do it. "That's what the serious concern is," he says.

Simply keeping up with losses—zero membership growth—is a reasonable goal for a nonprofit these days, says Tom Hurley, president of DMW Worldwide's Non-Profit Group, a major direct-marketing consultant. "The question is how to manage expectations and relations with current donors, to add as many as you lose."

Tin-cup competition limits member growth. The number of nonprofits has shot up 60 percent in a decade, while Americans' giving to nonprofits has increased just 35 percent, says fundraising consultant Christopher Dann of Dodd Smith Dann Layher. "Something's got to give."

Donors are giving to so many groups that some want to donate every other year, says Dick McPherson, a busy direct-mail adviser to stations. "They will come back later. They don't see it as an obligation to give every year."

Public TV may have worried too much about competing cable networks, when the real competition for revenue is coming from other nonprofits, says Tom Howe, executive director of North Carolina's UNC-TV.

But cable TV and other competitors do cut into system revenues. Declining numbers of viewers tune to public TV in an average week. Full-day household cumes peaked at 59 percent in 1993-94 and by last year had slipped to 54 percent, according to LeRoy.

And while public TV's average ratings have dropped during nonpledge periods, they've dropped much faster during pledge drives—from 2.9 to 1.8, or almost 40 percent, since 1984, LeRoy says. It's hard to sign up more members when fewer prospects are tuned in.

KCET lays off 15; three vice presidents leave the staff

Originally published in Current, March 12, 2001

Worried by slipping pledge results, KCET in Los Angeles has reduced its staff by 12 percent or 26 positions, laying off 15 staffers and eliminating 11 vacant slots. Three vice presidents are leaving and their jobs will not be filled. Donald G. Youpa, longtime No. 2 at the station, resigned last month as executive v.p. of institutional advancement. Peter Rodriguez, v.p. of government relations, and David L. Crippens, senior v.p. of foundations and education, will become consultants to the station.

The staff reduction leaves KCET with 170 staffers, half as many as it had in 1990, according to the Los Angeles Times.

"The station was chugging along pretty well until we hit December," KCET President Al Jerome told the Times. Pledge and other member revenues declined in December and January. In a press release, Jerome named priorities for the next several years: increasing membership, continuing local production, increasing national and regional production and moving into new content areas linked to education and the community.

And it's harder still when many viewers aren't paying attention. In a commentary in this issue (link at right), LeRoy and TRAC Media Services Co-director Judith LeRoy contend that pledge is "tired." Viewers have heard the earnest messages before and no longer hear them.

The messages themselves also have lost credibility for some viewers, as PBS acknowledged not long ago when it dropped the tagline, "If PBS doesn't do it, who will?" Market research about the PBS brand indicates that "perceptions of our merits, or top-of-mind recognition, are changing in a way that we're concerned about," says Glen Fisher, development chief at KTCA, Twin Cities. Pledge is a powerful communications tool, he believes, but public TV is "not using it effectively to build the brand."

"In most cases, pledge is the station's No. 1 opportunity to provide the language that viewers and members will use to talk about the station the rest of the year," says Joe Krushinsky, a longtime pubcaster who now directs CPB's TV Future Fund.

When stations fill their pledge drives with pre-packaged pitching, they lose a chance to do "an incredible amount of institutional positioning," says Rus Peotter. "People are fighting for 30 seconds on a station break, but they give away hours of potential positioning on pledge."

"Our standards are all upended"

While stations are taking less time to talk about their important purposes, noncommercial motivation and high standards, they're often giving multiple plays to pledge specials that make the phones ring but belie those values, pubcasters themselves are saying.

"We radically change the nature of our programming three times a year," says Sharon Rockefeller, president of WETA, Washington. Out go the regular PBS programs. In come a set of specials, chosen for their fundraising prospects, that "wouldn't pass editorial muster" during the rest of the year, she says. "Our standards of judgment are all up-ended. We all know it's a problem."

Pledge specials have become "far too transactional" and "poorly conceived merchandising events," says Bill Marrazzo, president of WHYY, Philadelphia. "We need the courage to stand by our brand and mission for lifelong community learning." For the March drive, the station stopped setting its pledge goals in dollars and erected a studio toteboard that measured success in terms of members.

WHYY's pledge producers spent more time on reasons for giving. They taped 15 "Out and About" spots around town, talking about the city and WHYY's services, and rolled them into the pledge breaks, says Craig Hamilton, executive director of development. They talked about "thank-you gifts," instead of "premiums," and included a lot of tickets to special events sponsored by the station. They created a new pledge-only series called Great Chefs and gave away recipes as "thank-yous." And they devoted one whole evening to locally produced programs and a pledge event originating from set-ups throughout the Philadelphia Museum of Art.

"The atmosphere was so positive around here," Hamilton says. "We felt good about the message we were sending, and we also were doing well." They did well in terms of members (9,900, compared to 9,600 in March 2000 and 6,500 in December)—and also in dollars ($1.1 million, compared to $850,000 in December).

Stations experiment with pledge programs that come from their regular schedules, or at least share its standards and values. This month, stations ordered up local documentaries to link pledge with their community services—and draw strong pledging. KQED aired Sin, Fire and Gold!: The Days of San Francisco's Barbary Coast. In Allentown/Bethlehem, WLVT did the 1960s installment in a local history series. And in New Orleans, WYES pulled Italian New Orleans from its ethnic gumbo.

Bigger pledgers

Pledge does do a spectacular job of bringing in money to meet the payroll. In one sitting, viewers get both the impetus and the invitation to donate. By last week, PBS had tallied March pledges of more than $45 million. The average gift was $110.

And pledge is getting better, in terms of cost and net income. With many stations importing centrally produced "virtual" pledge breaks, and by reusing "looped" breaks, they have dramatically reduced the cost of pledge production, says David LeRoy. By the first Thursday of March pledge, "everybody was playing loops," he says.

In Allentown/Bethlehem, WLVT counts on pledge to bring in a fifth of its budget, says Dean Orton, senior v.p. of development and community partnerships. Three years ago, its pledge drives grossed $363,000; this year, $875,000. But Orton doesn't count on pledge to collect all the new members that WLVT needs. He spends $100,000 a year for mailings to help with that.

Pledge is failing at its original task: finding new donors to build membership.

"While we are achieving gross [dollar] goals, they're coming from fewer and fewer members," says Marianne Petroni, director of membership at KQED, San Francisco. "This phenomenon is causing problems with our membership base."

While KQED has raised premiums as high as $350—for a package of Suze Orman seminar tickets, a book and a videocassette—the station has fewer members who give $40 or $50, says Petroni. "My personal feeling is that, if we need members' support, we do need to get those $40 and $50 members."

Roberta MacCarthy says pitchers too often address the big pledger. "If you talk about higher gifts all the time, and have less conversation about how important it is to support public broadcasting, it becomes more exclusive rather than inclusive."

To turn that around for WGBH, MacCarthy made a point of offering more premiums at $60 instead of $120. The station's average gift dropped from $101 to $90 for this drive, but the lower prices helped expand the number of givers by more than 20 percent over the average of the past two years, according to MacCarthy.

The big pledgers, meanwhile, turn out to be less of an asset than their first gifts might indicate.

"A person who gives you $50 a year, year after year, may be worth more than a person who gives you $150 and then never gives it to you again," says Robert Altman of PBS.

Indeed, fundraisers have learned to expect relatively few renewals from pledgers. Percentage renewal rates are sometimes in the teens instead of above 60 percent, as they are among core public TV members, according to Christopher Dann. It's really a form of special-event fundraising rather than membership, with a retention rate similar to donors in special events.

But gonzo pledge levels have created a "false economy," misleading some pubcasters to set membership price levels higher than the market will bear and damaging their direct mail efforts, Dann says. Most nonprofit mailers seek first-time memberships around $20 or $30, he says, but stations often expect $35, $45 or more, and then get disappointing results in direct mail. By lowering their first-year membership price, Dann says, stations could bring in more members who would still donate as much over the years as members acquired at higher prices.

Why don't those pledgers renew? One reason is clear. What will the station do for them that's worth as much as the $120 premium they loved? A year later, it's hard to conjure up the "pledge heat" emotional setting and the appeal of the original gift, according to development specialists.

"Here you are, you've pledged $250 and not heard from the station all year, except for requests for additional gifts, and then they say it's time to renew for $250," says David LeRoy incredulously. "It's like you get a piece of mail from Mars."

Dick McPherson remembers surveying donors after they pledged to WHYY a few years ago. "We asked, 'when you called it, were you intending to join as an annual member or simply wanting to thank us for Les Mis?' It was exactly split, 50-50."

Why would they want to be members? Public TV membership itself is "a pretty tired product," McPherson contends. The offer has not improved for decades: the member gets "a good feeling and a program guide, which many don't particularly use." He and LeRoy applaud some stations' efforts to develop special-interest clubs, e-mail newsletters and special events that make a better a bond with members.
..

Human nature: viewers ignore tired, old pledge
A commentary by David & Judith LeRoy

 

Among pledgers, a disproportionate number don't want to be "members," anyway, LeRoy says. Most don't plan to renew, according to a survey by TRAC Media Service (see box at right). In both demographics and mindsets, pledgers are unlike members recruited through direct mail, and unlike charitable donors in general.

To some extent, the difference is generational, and that worries LeRoy. Today's best donors, the survivors of the World War II generation, are dying at the rate of 500,000-800,000 a year, he says. Their children are a huge and affluent generation, but relatively selfish and nonconformist. Will the Boomers step in as supporters of nonprofits? "The evidence to date is 'no,'" says LeRoy.

"The actual concept of joining is not as valued by Boomers," says Roberta MacCarthy at WGBH. She found some success with a semantic change implying a good buy—selling a "smart pack" that includes a membership and a premium, an idea she admits filching from KQED.

A long, strange trip

Pubcasters say pledge gradually became a merchandise bazaar in recent years. Fifteen years ago, a pledge premium was a coffee mug or totebag "thank-you" gift in exchange for a modest donation, Altman recalls. Fundraisers learned gradually that they could ask for more if they had a nicer premium.

Then they began to figure out what kinds of programs would have attractive premiums attached, says Chris Dann. Programs chosen by that standard gradually filled the pledge schedule, replacing regular fare chosen by public TV's rest-of-the-year standards. The pledge revenues were so strong and so urgently needed that no one in the station could say no.

"We've seen a situation where there is actually an addiction to it," says Dann. "It's a moneymaking machine."

But nobody expects pubcasters to go to the summit, come home, and kick the habit overnight.

"We got where we are incrementally," says Sharon Rockefeller. "To get back from the edge of the precipice, we have to move back incrementally, too."

This article was reported with help from Karen Everhart Bedford.

Pledgers & members:
different folks

Results from a TRAC survey

 

 

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