PubTV stations move to pitch sustainer gifts during pledge

In the KPBS-led pilot testing appeals for sustainer gifts during pledge, travel host Rick Steves, left, appeared in pitch breaks with KPBS’s Maura Daly Phinney. The number of sustaining members contributing to the San Diego station has more than doubled during the past year. (Photo: KPBS)

Public TV stations looking to reduce their reliance on transactional fundraising will get more assistance from PBS this summer, when for the first time pitch breaks for its pledge specials will include messages inviting viewers to join as sustaining members — providing donations that arrive every month with no end date, although in smaller amounts than a Doo Wop show might inspire.

While a steady flow of contributions from a donor’s credit card sounds like a great idea in principle, it’s challenging for many local stations to adjust to this new method of charitable giving. Instead of receiving cash infusions at pledge time and dealing with fulfillment of high-dollar premiums, they have to change the language they use in asking viewers to support their service throughout the year and develop new systems for tracking credit-card expiration dates.

But the biggest hurdle, according to fundraising specialists, is adjusting for the change in their cash flow when membership contributions come through monthly donations of $10 to $15, rather than much higher gifts tied to premium offers.

Veteran fundraisers say the effort pays off over the long haul: “Sustainers,” as this increasingly commonplace breed of member is called, renew at higher rates than those responding to traditional pledge pitches, and their monthly gifts help to even out the roller-coaster financial cycles of on-air fundraising.

“If this is not a silver bullet, it’s as close to it as a lot of us have ever experienced,” said Rick Lore, chief development officer at Maryland Public Television, which has made a concerted push to expand its sustainer program over the past two years. Since Lore arrived at the Owings Mills–based state network in fall 2011, sustaining memberships and the revenues they bring in have increased tenfold, from 300 sustainers contributing about $34,000 annually to 3,000 who now donate $338,700, he said. Sustainers now make up 4.6 percent of MPT’s overall membership program and have contributed 6 percent of its year-to-date revenue.

At Twin Cities Public Television, donations from sustainers provide nearly a third of the station’s revenue, according to David Preston, membership director. He manages a database of 85,000 members, 27 percent of which contribute as sustainers. “People love what we do and want to give us money,” Preston said. Appealing to sustainers during pledge “gets them at a time when they’re interested in supporting us and makes it easy to continue to do so.”

The beauty of building a robust sustaining program lies in the high retention rates of these contributors, Preston said. He tracked 1,182 new members acquired during TPT’s December 2011 pledge drive, 936 of which provided one-time gifts and 246 joined as sustainers. One year later, 529 of these new members renewed, but the difference in retention rates between the two groups was substantial. Of the single-gifters, 34 percent renewed, but sustainers continued contributing at a rate of 87 percent.

Ongoing commitments from sustainers lifted TPT’s overall first-year retention rate among new members from that pledge drive to 45 percent, Preston said.

An analysis by Target Analytics in Cambridge, Mass., found that average revenue per sustaining donor for pubradio and TV was about 9 percent higher than the average for all other pubcasting donors in fiscal 2012. Sustainers average $151 per donor for radio, $135 per donor for TV.

Public TV stations have taken longer than radio to incorporate sustainer giving into their membership programs. A 2011 survey of 84 stations by PBS and the Contributor Development Partnership at WGBH found that a quarter of stations didn’t offer sustaining memberships. Among all the survey participants, an average of 4 percent of their members contributed as sustainers.

Wielding “the best acquisition tool”

Since the survey was taken, several stations have made concerted efforts to ramp up their sustainer programs.

At KPBS in San Diego, sustaining memberships remained flat at 4,000 “for as long as anyone could remember,” recalled Maura Daly Phinney, senior producer and on-air fundraising manager. About 18 months ago, KPBS General Manager Tom Karlo challenged the staff to “move the needle” on sustainers.

The transactional nature of on-air pledge drives has been a major hang-up for pubTV: Fundraisers share a belief that pledge pitches don’t attract sustaining members, who are motivated to support the broader mission of public broadcasting, not by premium offers. But “pledge has always been the best acquisition tool for new members,” Phinney said.

So KPBS partnered with four other stations to develop techniques for pitching to sustainers during pledge. The stations — MPT, TPT, Oregon Public Broadcasting and Detroit Public Television — applied for a Next Generation Fundraising Grant from PBS to test the possibilities.

Phinney produced the first batch of sustainer spots for KPBS’s March 2012 on-air drive. “It was obvious from the very beginning that pitching sustainers in TV pledge worked,” she said.

PBS backed the pilot the next month, and Phinney began creating breaks for all four stations to use during PBS NewsHour and the Nature documentary “Hummingbirds: Magic in the Air” for the June pledge drive. Additional breaks were produced for Billy McLaughlin: Starry Night with Orchestra Nova and Rick Steves’ Europe: Season Seven. By its August drive, KPBS had enough pre-produced sustainer breaks that about a third of the pitches it aired contained sustainer messaging.

Karlo’s challenge to “move the needle” has clearly been answered: Since March 2012, the number of KPBS sustainers has more than doubled, to 9,000.

“We were astonished at how well it turned out,” Phinney said. “Our numbers have been dramatic.”

A PBS report on the pilot provides details on renewal rates of members acquired during the test period. Of 3,000 viewers who joined KPBS as new members, 85 percent of sustainers are renewed members; only 23 percent of non–sustaining members renewed. The report estimates that over five years the KPBS sustainer program will bring a 313 percent hike in revenue and a 350 percent increase in retained members.

Public TV has fallen far behind radio in realizing the benefits of sustaining membership programs. For this graph, Target Analytics averaged donor revenues of 44 pubradio and 55 pubTV stations. Results for fiscal 2012 are preliminary.

“We haven’t seen anything come along in quite a while that offers the potential for the retention of members that a sustainer program does,” said John Wilson, s.v.p., pledge strategy.

This month PBS will distribute a sustainer pledge toolkit created by KPBS and the Next Gen stations. The pilot has expanded to include WTTW in Chicago and Phoenix-based Eight, Arizona PBS. More than 125 participants from 94 stations participated in a May 8 PBS webinar on the project.

The Public Media Business Association has also been working to support expansion of stations’ sustainer memberships, according to Andy Schwarz, executive director. About 50 station reps participated in a PMBA webinar last fall, and the association has planned a follow-up session for its annual conference in Washington, D.C., May 28-31.

Joe Campbell, PBS v.p., fundraising, said there is “some urgency” to get sustaining messages out to local public TV stations. In Europe and Asia, most charities already accept donations through bank electronic funds transfer, and the trend is just beginning to take hold in the United States.

“Research shows a person gives sustaining donations to an average of three charities,” Campbell said. Public broadcasting needs to move quickly to ensure they are on that radar. “That’s why we want to get this up and running.”

Cash flow and other challenges

But hesitation remains among local pubcasters, a portion of which don’t yet have recurring or sustaining donor programs, said John Mastrobattista, senior fundraising analyst at Target Analytics.

Many see the older demographics of the public television audience as an obstacle. As in its work with other nonprofits, Target finds that “the older a donor base skews, the harder it is to get them to change habits,” Mastrobattista said. Members who are accustomed to mailing checks may be unwilling to provide credit-card information to their local station.

Mastrobattista sees need for “complete buy-in among senior management, fundraising and programming departments within stations,” as well as “refinement of innovative as well as proven sustainer-recruitment techniques.” Cohesive messages must tout sustaining memberships across all of a station’s marketing platforms: on air, online, direct mail and telemarketing.

Another issue is the lag time in realizing the financial benefits of sustaining memberships, since gifts don’t arrive at the station in a lump sum but are spread over months or years.

“Yes, it does change the cash flow during the first 18 to 24 months,” said Valerie Arganbright of Appleby Arganbright, the St. Paul, Minn.-based sustainer consultancy. “We spend a lot of time with clients working on cash flow. That stymies people.” The most successful stations put a finance staffer in charge of figuring it out, she said. Timing is everything: Recruiting sustainers early in a fiscal year helps to ease the problem by providing more cash in that reporting period.

In the long run, said her business partner Barbara Appleby, a level income from sustainers is far more valuable than the “roller-coaster curves” of pledge drives. Annual renewal gifts cost a lot, “so when you look at net revenue, that lops the top off the roller coasters.”

During the PBMA webinar last fall, “a lot of questions surrounded software and how to support a new business model,” Schwarz said. Stations are also concerned about issues related to financial reporting. They want to know “What is the cash basis? When do they recognize the revenue?” he said. “It’s all different.”

Although the hurdles seem especially daunting for smaller public TV stations, Southern Oregon Public Television in Medford has been building on its program for the past year. SOPTV already offered installment-giving options to members, and in April 2012 its development team developed new source codes for sustainers and emailed an offer to 15-plus–year members, said Mark Stanislawski, president. Roughly 10 percent became sustainers.

“We began promoting sustainers actively on-air in station breaks following our March 2012 drive to attract regular viewers of our program service,” Stanislawski said. During SOPTV’s 2013 March drive, the station began pitching sustaining memberships during on-air breaks. Roughly 12 percent of the pledges received were sustainers, he said. SOPTV now has 5,611 active members, of which 85 (about 1.5 percent) are sustainers, after about a year of effort.

“It’s still early in the process here, and I see this as a real opportunity to address our core audience with more frequency using our regular programming,” Stanislawski said. “This ought to result in higher renewals and more stable membership.”

WTTW in Chicago has offered sustaining memberships for years but didn’t promote them during pledge until joining the Next Gen project, according to Jerry Liwanag, fundraising v.p. The station began testing sustainer pitches during its June 2012 drive, and new sustaining members have joined at rates of 11 percent to 24 percent for on-air campaigns running through March. In its last drive, sustainers made up 23 percent of new members.

WTTW’s development staff is working through “logistical complications,” Liwanag said, such as practices for handling calls received from sustaining members during subsequent pledge drives — phone handlers need to discern whether the members are upgrading their ongoing donation or making an additional one-time gift.

Working through details such as these will take time and undoubtedly more refinement, but fundraisers see big potential for those who stick to it. Appleby Arganbright encourages its clients to shoot for goals of converting 50 percent of its members to sustainers. According to Target, at least two radio stations topped that in fiscal year 2012; at least two public TV stations topped 20 percent.

But PBS is mindful that not all stations will be prepared to offer sustaining memberships by August. It will send nonsustainer versions of each pledge special, with pitches for sustainer gifts stripped out of national breaks. Stations also can edit the national version to remove mentions of sustaining gifts.

“A lot of stations have very well-honed membership machines based on a membership cycle,” Mastrobattista said. But for sustainers, stations “need to talk to people differently at different times with a different message. It’s not incredibly difficult, but there’s a lot to it. And it’s still evolving. Stations are figuring out pieces of the puzzle.