Pledge donors aren’t big believers in pubTV’s ‘catechism’

Adapted from Current, March 22, 2004
By Karen Everhart

Of all the viewers who make new pledges to public TV stations this month, only one in four will re-up membership a year from now.

Station fundraisers have come to accept the low renewal rate in exchange for a hit of cash from impulse purchases of pledge premiums. But stations are also failing to inspire loyal members to renew repeatedly, and infomercial-like pledge drives may be turning them off.

Those loyal members have been slipping away. Public TV stations lost 1 million members between fiscal years 1993 and 2002. Their membership slid 20 percent from a peak of 5 million to 4 million, according to CPB.

Data from a somewhat representative group of 14 stations indicates their membership rolls have declined by about 5 percent, on the median, in each of the past two years, according to a year-to-date index of second-quarter results compiled for PBS by Target Analysis Group. Membership revenue was flat or grew only slightly, and many stations would see losses if their donors weren’t giving larger gifts.

As stations found less success acquiring donors through direct mail, they turned increasingly to pledge to recruit new members, according to John Mastrobattista of Target, a database management firm that crunches numbers for hundreds of stations. “Pledge-acquired donors are harder to maintain because they tend not to be motivated by a sense of annual membership,” he said. “Their pledges are impulse contributions.”

Their inconstancy shows up in the averages. In a sampling of 90 public TV stations, Mastrobattista said, retention rates for pledge-acquired donors dropped 5 percent — from 29.2 percent in 1998 to 24.4 percent in 2002.

Viewers who contribute to on-air campaigns typically don’t have the same philanthropic attitudes as loyal members, although they’re willing to pull out their credit cards for high-dollar premium packages.

In contrast, public TV loyalists tend to renew at lower gift levels through the mail, but their retention rates are higher, said Beth Suarez, PBS development v.p.

Further differences appear when development execs speculate about members’ total giving over the lifetime of their relationship with the station. A short-term comparison doesn’t show big differences: People who became members by fulfilling on-air pledges in 1999 gave an average of $150 by 2002, just above the average of $143, based on Target data for 88 stations. Those who responded to cold direct mail averaged $104 over the same period.

But lifetime value is only a guessing game — a “squirrelly” concept, according to fundraising consultant Christopher Dann. A loyal member may donate steadily for decades and then leave a big bequest.

“People have sort of defended pledge practices by saying, ‘Yeah, we get an awful lot of money out of them one time, as opposed to getting them in the mail,’” Dann said. But the lifetime value of direct-mail donors is higher because they keep renewing and they’re the best prospects for end-of-life gifts.

Fundraisers have known for years that they’re drawing gifts from two fairly distinct populations. For example, Twin Cities PTV has one of the highest retention rates in the country, but it balances potential revenue with recruitment of longer-term members when it plans pledge drives, said David Preston, membership director. TPT doesn’t schedule heavy repeats of the transactional specials that draw give-and-run donors.
“We are always thinking, ‘This is the part of our schedule that is money and this is the part that is members,’” Preston said.

He doesn’t mind accepting gifts from members who probably won’t hang around for long. “If I’m able to get $365 off of someone today,” he said, “I’m going to get all that I can get.”

It’s unclear how many stations follow these moderate practices, which adhere to voluntary standards PBS developed with station leaders in 2001. Public TV execs refrain from criticizing tactics used by other stations. Many acknowledge that heavy reliance on transactional pledging undermines public TV’s image and turns off core members and viewers.

Ahead: hitting the wall?

David LeRoy, a prominent development and audience researcher and co-director of TRAC Media Services in Tucson, Ariz., sees a dangerous complacency in station leaders’ reaction to the situation. “Fewer and fewer people are watching pledge and fewer and fewer are pledging,” he told Current. “You will get to a point where fewer and fewer are being asked to give more and more money and, eventually, you’ve got to hit the wall.”

“The trend of lapsed members is accelerating, and it’s a phenomenon that you have to step back away from to see that it really is a major trend,” said Dann, whose studies of retained members uncovered many of the same insights as LeRoy’s recent work with lapsed and retained members. Dann’s firm — Dodd Smith Dann Layher of Larkspur, Calif. — began surveying public TV donors in 1993 for PBS’s biennial Retained Member study.

The problem first came to Dann’s attention when data showed pledge donors were lapsing at a high rate. Then it became clear that public TV has a retention problem with its members as a whole. It gained momentum in the late 1990s as competing cable networks began undermining what Dann calls the nonprofit value of public TV. The kinds of programs once seen only on public TV became available on cable channels promoted as high-quality television, he added. “Stations in a lot of markets made it worse by turning up the heat under pledge campaigns” and using their station-break promos to tout upcoming programs rather than the value of membership, he said.

A recent national Roper survey ranked PBS as the most trusted national institution, and this is strong evidence that PBS’s institutional value is as high as ever, Dann said. “But it’s clear to us that, for an increasing number of members, institutional value doesn’t offer people strong enough reasons to voluntarily give of their money.”

Dann’s 2003 Retained Member study, a phone survey of public TV members who have renewed at least once, measured an 8-point drop in the percentage of members who said they had a “very high opinion” of public TV as a nonprofit organization. Even so, members held higher opinions of public TV than of the other nonprofits they were asked about. The share of public TV’s retained members who held very high opinions of the Salvation Army and American Red Cross dropped 19 percent in two years.

Dann doesn’t take any comfort in the 4 percent increase among members who said they had neutral opinions of public TV as a nonprofit. The higher neutrality rating is only slightly less worrisome than losing ground in the “very high opinion” category, he said in a report for the PBS Development Conference last fall. “Neutrality is deadly in fundraising.”

A catechism for believers

Retained and lapsed members give different reasons for supporting public TV. Recent studies by TRAC found that those who agree with what LeRoy calls a “catechism of beliefs” about public TV are more likely than others to maintain their memberships (see box at right, above). '

TRAC identified this catechism through in-depth interviews about the core values that members associate with public TV—among other things, thought-provoking, balanced programs that reflect the viewers’ morals and aren’t influenced or interrupted by advertisers. Researchers then compared how members and lapsers responded to 11 statements that make up the catechism.

Asked why they support public TV, members endorse such reasons as “I feel a duty to support it because I use it” (59 percent say it’s “very important”) and “it’s good for the community, even if I don’t watch it” (53 percent).

Fewer lapsers agree with those statements. Among those who stopped contributing after two or more gifts, only a third agreed with the duty statement and 38 percent said it’s very important to support public TV as a community good. These ideas were held by even fewer people who let their memberships lapse after a single gift.

Lapsers are not “true believers” in public TV, said LeRoy, though they may rush to the phone after seeing a nostalgic pop music special produced by pledge wunderkind T.J. Lubinsky.

“If you don’t have the catechism and you pledge to a T.J. show, you’re going to fall off the file,” LeRoy added. TRAC also found that when multiple-gift members lapse, their belief in the catechism erodes — even though they continue to watch public TV.

Younger viewers don’t buy into the philanthropic motivations of the World War II generation. “Boomers and Generation X have no catechism, no articles of faith,” LeRoy said. “They come on the [stations’ membership] files and there’s nothing to hold them.”

For member fundraising in the immediate future, the most worrisome finding in the lapsed member study, LeRoy said, is declining renewal rates among the “silent generation” of Americans born during the Depression — the older siblings and parents of the baby boomers. Although they’re a much smaller portion of the population than boomers, these older Americans are typically in their peak years of charitable giving.

“Those are the people who are lapsing off the file, and they’re ticked off about pledge,” LeRoy said. “They don’t think some of the pledge shows are appropriate.”

Public TV may be able to win these members back if stations scale back transactional pledge practices and avoid displacing signature PBS shows such as Nova and Masterpiece Theatre for repeats of the latest Suze Orman self-help special, LeRoy said. “That is going to be tough to do.”

Boosting renewal rates

On average, stations retain about 65 percent of all donors on their files, estimated Mastrobattista, a drop from 70 percent retention rates that many stations held a few years ago.

By contrast, TPT renews about 80 percent of its 100,000 members within 18 months, Preston said. He attributes TPT’s high retention to a lot of factors besides careful pledge scheduling. Low cable penetration in Minneapolis/St. Paul helps the station maintain loyal audiences. The station solicits renewals and acquires new members through telemarketing. “Our in-house telemarketing program is essential, because it allows us to address people on a personal basis,” he said. On renewal calls to first-time transactional members, telemarketers can “feel them out” on renewal levels that they’re comfortable with.

Another station with high retention, WGBH in Boston, has built its membership list by about 2 percent over the past few years, according to Jon Abbott, g.m. The station targets its marketing to members according to their favorite program genres and cultivates new members through partnerships with cultural institutions such as the Boston Lyric Opera, co-sponsor of its annual extravaganza of opera programming on WGBH radio and TV. WGBH’s on-air campaigns include signature programs such as Nova, Masterpiece Theatre, the NewsHour and kids’ shows, and the station declines to air the more controversial pledge specials, such as those featuring nutrition guru Gary Null or touting collectible Blenko glassware. “We do not overplay a program and we are careful about having a balance and mix,” Abbott said.

Web page corrected March 31, 2004
Current
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Why I support public TV

In TRAC's study, current members of public TV stations were more likely than lapsed members to cite these statements as "very important" to them. Their catechism about public TV:

It has programs that are thought-provoking.
The programs have no commercial interruptions.
It has balanced perspectives.
It offers good drama programs.
The programs reflect your values and morals.
Its programs aren't influenced by advertisers.
It offers good music programs.
There are programs you can't find on other stations.
I feel a duty to support it because I use it.
I support it because it's good for the community, even if I don't watch it.

Source: Tales from the Shrinking Files, TRAC Media Services, January 2004

EARLIER ARTICLES

Pledgers and long-term members have different program interests, views of charity, says earlier TRAC study, 2001.

PBS holds a summit meeting on membership and pledge problems, 2001.

OUTSIDE LINKS

TRAC Media Services audience and fundraising consultants.

Target Analysis Group, fundraising number crunchers.

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