With analysis from Richard McPherson
Individual contributions to local public broadcasting stations are the single largest revenue stream coming into public broadcasting. According to CPB’s latest report on system finances, gifts from members and major donors provided $871 million in gross revenues to public radio and television stations in 2013.
That pool of money was nearly evenly divided between radio and television. Public television’s share, $439 million, was flat from 2012 revenues; radio’s $432 million was 5 percent higher than 2012.
This river of financial support from individual donors is far larger than the $497 million in federal monies that CPB channeled to local stations in 2013. Subsidies from state and local governments, which totaled $292 million, were mostly directed at television.
In recent interviews with 40 front-line station development professionals and independent consultants in membership fundraising, I found consensus that public media’s membership fundraising work is quite strong. Almost three-quarters of the station-based fundraisers who participated in the interviews reported that their member revenues have increased during the last two years; at two-thirds of the stations, membership files are also expanding.
I initiated the interviews in preparation for the next Public Media Futures Forum, scheduled for a July 12 session at the Public Media Development & Marketing Conference in Denver. My research focused on the sustainability of individual giving revenues in the increasingly complex and competitive media landscape.
My findings were reinforced by a CPB State of the System briefing, delivered during last month’s Public Media Business Association conference in Portland, Ore. Moustapha Abdul, CPB’s chief financial analyst, reported that public radio stations collectively added 440,000 donors to their membership files over the last four years, an 18 percent increase. The growth brought radio’s total national membership to 2.94 million.
Abdul reported that public TV stations have begun to recover lost ground in membership fundraising. Stations’ member files grew 2 percent from fiscal 2012 to 2013, although the total number of PTV members, now 3.07 million, is down 4 percent, or 130,000, compared to 2009.
The membership revenue gains may reflect the larger bounce-back in individual gifts within the broader nonprofit sector. Researchers at Giving USA and Indiana University predict that individual giving may soon return to pre-recession levels.
In my interviews with public media membership directors, I heard undercurrents of concern along with their general expressions of satisfaction and confidence.
- Station-based interviewees uniformly described the greatest threat to public media membership programs as the danger that pledge drives will become less effective over time, leading to a vicious cycle of longer drives that generate less revenue.
- Most membership directors for radio and TV stations reported that membership software and the field’s web technology is not keeping pace with stations’ and members’ needs.
- Interviewees expressed broad concerns about stations’ ability to balance their messaging and campaigns aimed at legacy supporters with the challenges of cultivating younger generations as member contributors the decade ahead.
After 40 interviews, I concluded that the stations already face a dual set of membership challenges. Front-line staff must first improve the tools that are working today, many of which were developed decades ago, to solicit financial support from broadcast audiences.
At the same time, several hundred membership managers and their national leaders must invent and adopt new tools for the multiplatform world of pervasive social media, where content delivery is more complicated and donor relationship are, almost certainly, going to very different.
Complex layers of membership fundraising
Membership practices of local stations are dominated by tactics that were developed in the 1980s and 1990s. Even the two most-promising growth areas — sustainer programs and major-gift fundraising — began to take root at least 20 years or more years ago.
The sets of membership tools now in use at local stations are complex and dense. Individual membership departments juggle from six and to as many as 13 distinct types of fundraising activities. These include seasonal pledge drives, database management, member communication and services, direct mail, auctions, telemarketing, online giving, email marketing, prospect identification/solicitation for major and planned gifts, sustainer programs, neighborhood canvassing, crowdfunding, social media engagement and, most recently, mobile-platform transactions. In that long list, only one practice — auctions — has declined in use.
It’s no surprise that many membership managers who participated in our survey described the volume and complexity of their work as “overwhelming.”
The evolution of pledge, which began as live, in-studio pitching for phone calls answered by local volunteers, has been dramatic, especially in TV. On-air drives have turned into almost daily multiplatform productions; virtual pitch breaks are mixed with live spots, and donor calls are often routed to out-of-market call centers.
In the last 20 years, pledge-style solicitations have expanded to include continuous online pledge appeals and new cycles of e-communications to members.
Renewal mailings, which in the mid-’80s involved a couple of reminders, are now commonly produced as a seven-piece series and supplemented by telemarketing and email elements. Monthly sustainer programs have also increased the volume of backroom work required to maintain donor accounts and replace lost or expired credit cards. Major-gift solicitation adds layer upon layer of back-office and front-office work: donor identification, cultivation, communication and solicitation.
More recently, 12 TV stations expanded their recruitment work to include door-to-door canvassing and secured an impressive 90,000 new members, half of them signed on as sustainers. And, of course, canvassing added another layer of database tracking, testing, member-service delivery and vendor management.
Push toward best practices
Public media’s success in membership fundraising in the future probably rests on our ability to do the things we know how to do, only better than we have ever done them before.
That observation is gleaned from my interviews with membership managers: Almost everyone described a need to move this or that membership activity closer to best practice. They expressed confidence that they can raise more money or cultivate more donors by doing things better.
But they do not agree on how to achieve these lofty goals.
This brings me to one of the great challenges facing station executives and leaders of affinity groups that support membership practice: How do you increase the effectiveness and efficiency of literally hundreds of independent membership teams?
I sense that solutions are beginning to emerge, although even 40 interviews is hardly a full picture of system thinking. Still, here is what I heard:
• A wide range of station leaders are considering multistation partnerships, mostly involving content or promotional collaborations, with one important exception: More than half of the TV licensees that I spoke with are now using services provided by the Contributor Development Partnership.
CDP has demonstrated that even small changes in practice can make an enduring difference in results. For example, by simply calling first-time donors on the phone to thank them, CDP participants have achieved measurably higher second-year retention rates. The partnership is also pioneering the use of canvassing for public television, an extremely difficult undertaking for individual stations to conduct on their own.
• Many television managers pointed to significant enhancements in their own fundraising techniques, such as improved formatting and execution of pledge breaks within national programs. They noted that these changes are well within reach of other stations.
• The importance of pledge revenues for local station is impossible to overstate — and, from my extensive interviews with fundraising managers, so is concern for its future.
The continued effectiveness of pledge is the greatest concern across both radio and television. Some managers and many development consultants believe that pledge is already in decline in public TV. A few PTV stations now devote some airtime to pledge for as many as 200 days each year.
Fragility of pledge
Almost two-thirds of the membership directors I interviewed reported that the volume of incoming calls and online pledges has declined noticeably over the last two years. Of the 15 radio-only licensees I interviewed, 11 reported that their pledge volume had declined; six of those reported a decline of more than 10 percent.
Many attributed the drop-off in phone calls to growth in sustainer giving, explaining that members who contribute automatically each month no longer see the need to call during pledge.
Several independent consultants said the problem may result from stations’ relentless focus on recruiting sustaining members: Those first-time donors who are only able or willing to contribute an annual gift of $50 may feel excluded. I found support for this view when I reviewed stations’ online pledge pages and found many make it difficult to donate a single, discrete contribution
In interviews with TV membership directors, I heard growing concerns about stations’ over-reliance on “transactional pledging,” when viewers contribute to purchase the high-cost premiums tied to a pledge show. Most TV membership managers say they’d prefer to acquire members whose relationship to the station is grounded in support for its broad mission or appreciation for its educational role.
Concerns about the fragility of pledge are very broad: Only 12 percent of interviewees disagreed with this statement: “Pledge will become less effective as listeners get more options for audio and viewers get more options for video.” Most of the front-line staff who participated in the interviews believe that seasonal pledge drive revenues may decline — regardless of the growth in sustainer files — as more listeners and viewers begin accessing public media content through Internet-connected mobile audio players and video streaming services such as Netflix, Roku, Amazon and Hulu.
It became clear that if local public broadcasters are to preserve the efficacy of pledge or some over-the-air form of member recruitment, they’ll have to do more than improve their technique.
This is a very difficult issue. Out of those 40 interviews, not a single person could identify an alternative member-recruitment tool that was as “efficient or effective” as pledge. The only other large-scale recruitment tools are direct-mail acquisition, which has a very high cost to acquire a member, and door-to-door canvassing, which has a far better return-on-investment but is in its infancy as a public media fundraising practice. Both techniques are used primarily by the largest television stations.
The most dramatic of the options now under discussion is PBS’s plan to create some form of “members only” access to content in public TV.
The next generation of members
The other major concern at the front line of membership is generational change in the audience and in the base of donors. The deepest worry among TV membership staff is stations’ reliance on an aging group of donors, some of whom are dying off. Both radio and TV membership staff are struggling to reach that elusive “younger and more diverse audience,” with little evidence that anyone’s actually learned how to do that.
Most managers readily acknowledged that, in the years ahead, the complexity of membership work will almost certainly multiply as both radio and TV stations address the fundraising implications of generational shifts in their audiences. Scanning the broader nonprofit sector, the path forward is not likely to be simply a linear extension of the path that got us here. Revenue growth will almost certainly require developing additional, and perhaps very different, techniques, even as stations work to maintain and improve legacy activities.
Mark Fuerst directs the Public Media Futures Forums, a project funded by the Philadelphia-based Wyncote Foundation to promote and provide analyses of the strategic challenges facing public broadcasting. He will be discussing his research during a July 12 presentation at the PMDMC in Denver. Richard McPherson, an independent fundraising consultant based in San Francisco, interviewed technology companies and provided additional analysis as an adviser to the Public Media Futures Forums. The Wyncote Foundation provides financial support to Current through a separate grant.