Tuesday, April 12, 2005

Big Money

A major donor calls the general manger during the Spring fund drive and offers a $25,000 gift if the manager agrees to restore classical music to the station program schedule. He respectfully declines. In that case, she respectfully tells him, she will donate just $10,000 this year. It’s a true story with a happy ending, especially since that donor had never given more than $10,000 before. It also points out that big money can cause problems for public radio.

The most obvious is that big money often comes with strings attached. Today, there are some stations that must forever keep certain types of programs on the air because of a large gift accepted from a single donor. That’s actually a rare problem compared to the havoc big money can wreak on the annual budget.

Some stations are treating big money from major donors and foundations like the subsidies they used to get from the university and CPB. Budgets are built with the assumption that the money will renew annually. Even worse, budgets are built with the assumption that the money will go away and the slack will be picked up by membership and underwriting.

Sometimes that works out. More often it doesn’t and these stations are faced with making tough decisions about local programming and staffing.

The lesson here isn’t that big money is bad for public radio. It just has to be managed well. To begin with, big money can’t have more decision-making weight than the millions of hours of public service provided today or could be provided with the right programming choices. It shouldn’t have more leverage than the money received from the thousands of individual contributors who invest in the station. Most important, it shouldn’t be so critical to the station’s bottom line that failing to get one or two gifts undermines the station’s ability to provide it’s core service.

That might mean planning on spending only 80 to 85 percent of the big money in each year’s budget. If the major donor and foundation goals are made, the station has a nice surplus or contingency reserve. That beats the alternative of having to drop critical programs, reduce local service, or letting go of key staff.

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