Friday, February 13, 2009

More Federal Dollars = Less Listener Support?

Every action has side effects.

A potentially big side effect of asking for the asking the federal government for bigger subsidies for public radio is a drop in listener support.

It is well established that a listener’s funding beliefs are an important piece of his decision to give. The more a listener believes listeners fund public radio and that government support is minimal, the more likely he is to give.

There’s research to back this up, but anyone who was raising money for public radio during the Gingrich era knows it is true. Serious threats to federal funding bring out the best in listeners.

On the flip side, news of the big Kroc endowment to NPR caused many listeners and donors to question the importance of their support. Some stations felt the Kroc gift stunted giving at first.

Asking for more federal money risks listener support. It might be necessary to make that ask for stations in dire need, but the side effect could be a drop in donors across the country.

There’s no way to gauge the impact in advance. At a minimum, it will make it more difficult to convince listeners who have never given before to contribute. Every 5 percent loss would translate into an industry-wide loss of between $12 and $14 million. The impact would continue in out years because of a smaller donor pool. .

It’s also important to point out that healthy stations, the ones that don’t need extra federal support, could lose donors and dollars on news that the industry is asking for more money, even if those stations don’t receive new tax dollars.

All of this must be considered in the calculus of approaching the government for extra subsidies. What looks like free money could have significant hidden costs.

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Blogger Brad said...

How much of this is a problem of perception, though? I mean, as Scott Adams famously wrote in The Dilbert Principle: "If you put enough garnish on a hamburger made of wood, eventually some (idiot) is going to eat it."

Much of the populace supports tax cuts despite the preponderance of evidence that shows it actually hurts them and helps rich bankers and whatnot. I wonder if a better question is "how can public radio tap into that false impression and leverage it for all it's worth?"

11:01 AM  
Blogger John Hingsbergen said...

I really believe this issue of perception is correct. Many listeners today believe that their local stations receive large amounts of funding from "government." That has to work agains on-air appeals and other local fundraising efforts.

Let me toss in another factor. As an employee (for a few more months at least) of a university that has decided to get out of the radio business, we have faced a couple of issues:

1) A general perception that our "public ivy" was financially well-off therefore individual donations were relatively insignificant. This was at least partially true since we received a higher than average amount of funding from the university for most of our 59 years on the air.

2) Whenever a listener donated to the station, it was not long before he or she received fundraising solicitations from the university with no mention of public radio or the original purpose of the donation.

No doubt about, stations need to become more if not completely self-sufficient but I suspect the perception of federal subsidies may not be as harmful as dependence on institutional support.

11:40 AM  

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