Tuesday, November 07, 2006

It's Not a Bake Sale Anymore

Earlier this year, I worked on a project for the DEI/PRPD Fundraising Partnership that was designed to see whether a few of public radio’s on-air fundraising practices lived up to the public trust. Specifically, we studied challenge grants, matching grants, and sweepstakes.

I presented the results of the study at this year’s DEI and PRPD conferences. You can see slides and notes from those sessions here.

The project found that there are many stations raising a great deal of money while maintaining a high level of accountability to listeners, licensees, and other stakeholders. They are good models for all stations. The project also found considerable room for improvement, some sample findings:

> 90% of the survey respondents using challenge grants said their challenge grant programs had a high level of integrity, but fewer than half said they had the documentation to prove it.
> About one-third of the survey respondents using challenge grants put challenge money in the unrestricted operating budget as soon as the money comes in the door, even if the challenge has yet to be offered on-air.
> 61% of respondents using sweepstakes said their contest rules had been approved by legal counsel. We identified instances where stations were simply copying rules from other stations in other states, and updating them with the station’s local information. That’s a risky practice, at best.
> 30% of respondents using sweepstakes said they never announced their contest rules on-air even though the law requires such announcements.

It also came to our attention that stations with Internet streams that also use sweepstakes during pledge drives might be subject to the sweepstakes rules of every state since the station can be heard in every state. E-mail and direct mail sweepstakes appeals that cross state lines present similar issues. The inter-state sweepstakes issue is just another good reason for stations to invest the time and money in good legal advice. Legal counsel on sweepstakes should be considered part of the cost of fundraising.

I came away from this project with the sense that most stations are handling most challenge grants and sweepstakes with a high level of integrity, but they are not thoroughly researching, planning, and documenting their activities in these areas.

Rather than treating public radio fundraising as a business where there are serious consequences if something goes wrong (like fines, lawsuits, the public loss of credibility, and challenges to the station’s license), these stations are operating like the local PTA selling cupcakes and cookies outside the voting area on Election Day. They couldn’t tell you who did what when after the fact.

We don’t know why stations are operating this way. Our project didn’t go that deep. Perhaps it hasn’t occurred to station management to operate any other way. Perhaps station managers just don’t think they will ever have to be accountable to others. Or maybe they think the good that their station does will outweigh any fundraising infraction that might occur.

What we do know is that the entire public radio industry would be better off if all stations took stock of their fundraising practices and made sure they aligned with the station’s core values and the public’s perceptions about the station’s credibility. Toward that end, JSA and the DEI/PRPD Fundraising Partnership will be developing guides and resources to help stations identify opportunities for improvement. More on that part of the project in a week or two.

2 Comments:

Anonymous Anonymous said...

Rather than treating public radio fundraising as a business where there are serious consequences if something goes wrong (like fines, lawsuits, the public loss of credibility, and challenges to the station’s license), these stations are operating like the local PTA selling cupcakes and cookies outside the voting area on Election Day.

(snip)

What we do know is that the entire public radio industry would be better off if all stations took stock of their fundraising practices and made sure they aligned with the station’s core values and the public’s perceptions about the station’s credibility.


Based on what the rest of your post says, I think they ARE doing that already. Your post seems more concerned that stations aren't covering their asses legally. Regular Joe's and Jane's who're donating money to the station don't care much about the legal aspect...beyond perhaps being able to claim the donation as a tax deduction. That's about it. The fact that the station is warm, friendly, projects honesty, and seems like a good cause...that's what is establishing credibility in their listeners' minds. Not that they strictly follow a bunch of arcane rules and laws.

I'd actually say that most stations operating this way would view "getting the lawyers involved" as a good way to decrease credibility in their listeners' minds. Gives the impression that they need lawyers to stay legal instead of inherently having integrity to stay honest.

12:16 PM  
Blogger RadioSutton said...

As has often been pointed out many times, having integrity and the following law don't always go together. In this case, a station complying with sweepstakes law in Connecticut might be violating the sweepstakes laws of New York, which are very different. Did you know that any sweepstakes in NY with a prize of $5000 or more must register that sweepstakes with the State's Attorney General and be bonded for the full value of the prize? Now if you are a radio station in California marketing your on-line stream to residents in New York, do you have to comply with NY sweepstakes laws? Do you have to be bonded in NY? What's the penalty for not following the NY laws? Are you willing to pay that? What's your station's liability if your listeners win a cruise and the then cruise ship nearly tips over while at sea, severly injuring your listeners? Before you answer, it'll never happen... it almost did. A few stations very nearly had listeners on that cruise ship that lurched at sea a few months ago. These are real and serious issues.

As for the warm fuzzies, they go away real fast when the public trust is broken. Right now, quite a few stations are risking breaking it.

4:29 PM  

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