Failing to ask for major gifts costs pubcasting millions
As budgets in public TV tighten, stations are turning to major giving to inject much-needed revenue into the system.
The potential is great, according to a CPB-funded McKinsey & Co. study that examined public TV finances. Public TV stations stand to gain as much as $20 million to $35 million in net revenue by winning more donations over $1,000, the study estimated. Stations that systematically seek major donations already have seen those gifts nearly double, the study says.
But so far the system has lacked a comprehensive plan for major and planned giving, says fundraising consultant Dick Kellogg. Indeed, pubcasting lags all other kinds of nonprofits in major gift fundraising, including universities, hospitals and cultural groups.
More than half of all public TV stations—113 out of about 170—have little or no major giving effort. Some three dozen stations have some effort in place, while only 27 have a strong program, the study says.
Public TV stations with no major giving programs typically earn about 6 percent of their net revenue from major gifts, McKinsey surmised from case studies. Stations with established efforts earn more than double that—13 percent—from major gifts.
Public radio could benefit from a concerted effort as well, says Walt Gillette, director of individual giving at WAMU in Washington, D.C., and a major-giving consultant for the Development Exchange Inc. Fewer than 50 pubradio stations out of approximately 700 NPR affiliates have a strong major giving program, he says.
In pubradio, an average station earns about 10 percent of its income from major givers, says fundraising consultant Jim Lewis of Lewis Kennedy Associates. But stations with substantial programs earn more than 12 percent of their income through larger gifts. Major donors are more likely to give repeatedly, Lewis adds.
Most stations count major donors as those who give $1,000 or more annually. It’s higher in larger markets: New York’s WNET and D.C.’s WAMU set the bar at $2,500. Most public radio stations aim between $500 and $1,000. Pittsburgh’s WDUQ-FM, for instance, sets its rate at $500.
By definition, these givers are worth courting. At Chicago Public Radio, where a major donor gives $1,000-plus, 1 percent of its members give 15 percent of its total revenue, Lewis says.
In San Antonio, Texas Public Radio raises one-third of its total income through gifts of $365 or more, Lewis adds.
WNET has more than 2,000 people giving at the $1,300 level or above, reports station manager Paula Kerger. About $9.3 million—slightly less than a third of the station’s individual income—comes from large contributors.
Despite the economic downturn, major donors continue to write large checks, Kellogg says, but pubcasters aren’t asking for them. The rub is that, unlike other charities, stations can use their air to attract support; it’s like a football team keeping its star receiver on the bench, Kellogg says. Stations that start asking for gifts of $1,000 or more are “blown away” when listeners respond, Lewis adds.
Other stations are afraid to ask for gifts over $250 because they don’t understand how much people value them, Lewis says.
In addition, university-licensed stations may be hemmed in by their overseers so they don’t compete with the university’s own fundraising, says Rick Schneider, g.m. of KNPB in Reno. Similarly, the commissions that supervise state networks are often ill-suited to pursue large gifts because they’re made up of government officials rather than development experts or wealthy, well-connected board members, Kerger adds.
Seeking major gifts also takes time, says Cathy Sterling, who oversees major giving at WETA in Washington, D.C. It seems like forever compared to a single pledge night that can raise $300,000, she says.
Most stations also fail to cultivate donors over time, says fundraising consultant Bob Stein, a Virginia-based consultant who operates the advice site majorgiving.com. Though many stations still see their members as customers, most major donors don’t want coffee mugs or Suze Orman videos, he says. They’re seeking recognition and a meaningful relationship with the station.
Another problem is when stations present themselves as chronically underfunded organizations barely surviving from one pledge drive to another, Stein adds.
“We’ve established ourselves as a pay-as-you-go service rather than a long-term philanthropic investment,” Stein says. “If everything is a high drama, then where’s the institutional stability that a major donor is looking for?”
A successful major giving program starts at the top, Lewis says. Stations’ chief executives must be involved. They must articulate the station’s needs to prospective donors and be freed from daily operations to help cultivate them, he adds.
Because major donors are giving lots of money, they expect an intimate relationship with the station and want to size up the person in charge, Lewis says.
WNET’s President Bill Baker views major gift fundraising as a core part of his job, Kerger says. He made it his business to learn how to ask for money and is comfortable doing so, she says.
Oregon Public Broadcasting President Maynard Orme regularly attends donor cultivation events, says Jeff Wright, who oversees the net’s capital campaign. NPR President Kevin Klose also works the fundraising circuit to attract high-end gifts for stations.
Board members also matter. Not only do they serve as a constant source of major giving themselves, they can also tap friends and business associates to contribute, Wright says. This peer-to-peer prospecting helps the station identify major givers who may not even be members.
“Things can grow geometrically if you involve the board,” Sterling says. When prospects see their friends giving large amounts of money, they’re more inclined to make contributions as well, she adds. Many board members also volunteer to hold events in their homes, keeping the costs of cultivation events low.
Even if a station’s board isn’t good at fundraising, the development team can establish a volunteer circle of major donors willing to help with prospecting, says Gay Cookson, director of special gifts at KUED in Salt Lake City. “People love to be asked to help,” she says.
Stations can start with the prospects in their own membership lists, Lewis says, contacting dollar-a-day contributors and suggesting $1,000 gifts, for example. Development officers also can hire database specialists to screen their records for major donor prospects based on gift size and longevity, he adds.
Once prospects are identified, they need to be romanced, Stein says. Several stations hold special events to bring along large contributors. Texas Public Radio hosts a fall dinner for high-end givers; WNET holds an annual gala. Others hold less costly events such as program screenings, producer chats and station tours.
WETA divides its major donors into two affinity groups—kids and public affairs—and solicits them differently. Major donors with small children are invited to station events with characters from popular kids shows, Sterling says. News junkies, meanwhile, meet with producers of WETA’s public affairs lineup and notable Washingtonians. ABC newsman Sam Donaldson hosted a recent event that featured presidential historian Michael Beschloss. These events allow development officers to sing the station gospel and remind donors of the importance of their support, Sterling says.
Stations should visit donors in their homes to log valuable “face time,” Cookson says. Most stations make little progress in soliciting gifts beyond the $1,000 level because they fail to ask for bigger gifts in person, she adds.
General managers need to free major gift officers from clerical tasks such as letter-writing and database management so that they can get out of the office, Stein says. A major gifts officer should be meeting with 200 prospects a year—about four a week, he contends.
While it’s best to devote full-time staff to major giving (OPB, for example, has three), it’s not necessary, Lewis says. Stations can raise significant dollars without a dedicated person, but staffing is the secret to maintaining strong relationships, he adds.
Expecting immediate results dampened fundraisers’ spirits during many campaigns for stations’ DTV conversion money, Lewis says. Capital campaigns should be preceded by successful major giving programs, he says, but many public TV stations hadn’t cultivated a group of major donors willing to contribute.
Successful capital campaigns should enlist current major donors to reach out to their friends who aren’t involved with the station, Lewis says. Once the campaign is over, the pool of major donors usually has grown, resulting in greater giving, he adds.
Like major giving, stations also fail to realize the potential of planned giving, Stein says. They rarely ask to be remembered in their audience’s wills or named as beneficiaries of trusts.
“The failure to promote bequests comes from irresponsibility, ignorance or laziness,” Stein adds. “There is no excuse for leaving money on the table.”
Stations that have invested in planned giving see significant results. The average bequest to public TV stations is between $20,000 and $30,000, Lewis says. Gifts from trusts typically exceed $100,000.
Pubcasters are so focused on the struggles of daily survival that they’ve forgotten to take a step back and focus on the bigger picture, says Peter Kote, a planned giving consultant based in Orange County, Calif. Stations think planned giving involves complex legal work but it doesn’t, he says. Lawyers for the benefactor usually handle the arrangements.
Every station has a story about a planned gift that came out of nowhere. That’s because a station can rarely predict who is writing it into a will, Lewis says. Bequests often come from people who’ve been members for years but never gave more than $35, he adds. They’re the classic millionaire-next-door types, who drive old cars and wear inexpensive clothing but sit on huge nest eggs.
Because older people—even wealthy ones—live off fixed incomes, they tend to be parsimonious in their later years, Lewis adds. They want to support the station with larger gifts but don’t because they’re afraid of outliving their resources. In their wills, they are free at last to give more generously.
Marketing to planned givers is tricky because stations never know when they’re reaching them, says consultant Dick Kellogg. He advises stations to constantly remind viewers and listeners to “please remember us in your will and trust.”
In the first nine months that it used that phrase, WSHU-FM in Fairfield, Conn., saw a 500 percent increase in bequest notifications, Kellogg says.
Within three months of launching its planned giving website, OPB received a $175,000 stock gift and a $3.5 million bequest from someone it had never heard of, says Mel Waggoner, who seeks planned gifts for the network.
With its older audience, pubcasting already appeals to people in their will-writing years, Kote says. He recommends stations send appeals to members over the age of 65 and share prospects with other charities. Benefactors almost always leave contributions to numerous organizations, many of which can prospect together, he adds.
Web page revised March 17, 2004
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