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.