‘Restricted unrestricted’: a productive new flavor of grants at KPBS

“Blessed Be the Ties that Bind” may be music to churchgoers, but many station leaders find it discordant. No matter how much CEOs welcome the blessings of major gifts, they tend to start doubting if they find strings attached.

Increasingly, big donors do attach conditions. Not all want to see their name on a building or a room, but they do want to see their gifts used for purposes that matter to them, even when giving to the operating fund. Donors give for their own reasons; the fact that a station needs “to pay the power bill,” as one CEO put it, tends to be less compelling than content about topics that matter to them.

That leaves station leaders with a difficult choice. If they doggedly pursue general, unrestricted gifts, they risk getting fewer and lower gifts. If they accept too many gifts with restrictions, they risk letting donors determine the station’s direction. Such “mission creep” is a problem for any nonprofit organization, but it is anathema to a sector that prides itself on its editorial independence.

Giving donors what they want

In 2005, joint-licensed KPBS in San Diego introduced a model of major-gift fundraising that treads a thoughtful path between these two extremes.  Associate General Manager Stephanie Bergsma, who had recently orchestrated Joan Kroc’s $230 million bequest to NPR, thought about the fact that many major donors to other San Diego causes contributed less to KPBS, even though they were loyal. She wondered what aspects of the stations’ services motivated them to give. How could she inspire them to give more to KPBS, not just for a capital campaign, but for operating needs?

She began visiting these donors and uncovered their interests in local government, science, technology, the environment and other issues. These were all areas in which KPBS was producing local content and airing national programming.

Working with station management and the news department, she packaged programming that KPBS was either doing or planning into a series of eight content-specific funds (see box). By allowing donors to invest in these funds, she gave them a “destination” in the development program that associated their gifts with their interests, but she left the station in control of its mission and content. As CEO Tom Karlo puts it, “We link people’s passion with something we want to do.”

How it works in San Diego

Each fund prospectus is a succinct case for support. It provides a rationale for the programming, a description of the station’s track record in that area, documentation of the impact of KPBS in the community, a budget, and a general description of the kinds and amounts of programming the fund will provide. Content supported by a fund will share subject matter but often appear on multiple platforms — TV, radio and online production, and even reporters’ public appearances. Karlo believes that making content for various media, as joint licensees do, heightens the chance that could-be donors will hear or see what they supported.

For each fund, KPBS enlists between one and four major donors who, among them, typically give a total of $70,000 to $80,000 a year to the fund, and commit to do it for three years. Each fund therefore generates close to a quarter-million dollars over three years.  While companies and foundations can participate, KPBS positions the funds primarily as giving opportunities for individuals and families.

The station gives on-air recognition, similar to underwriting announcements, but separates the credits from content backed by the fund. Donors receive regular reports on the programming resulting from their gifts, demonstrating a level of stewardship that donors can find meaningful.

The original concept was to support coverage that the station was already committed to producing. Therefore, while each fund was designed to attain subject-matter objectives, the planned sums for those purposes were already in hand, so additional gifts increased the station’s discretionary funds — what Karlo terms “restricted unrestricted.” This budgetary flexibility helps KPBS avoid the vexing situation of having enough money for projects but not enough to cover routine operating expenses.

With this system up and running, KPBS has also begun creating funds for dreamed-of projects that aren’t already in the budget.

As KPBS refined its strategy over the past six years, the funds have allowed the stations to expand its staff and programming, which, in turn, enhances its perceived value to members and sponsors.

Guarding the firewall

Any arrangement that allows donors to associate their gifts with a specific type of content, particularly news coverage, raises concerns about editorial independence and integrity. Karlo has taken steps to protect the editorial firewall. KPBS separates on-air recognition announcements from content produced through the funds, maintains control of the editorial content, and walks away from potential gifts that have built-in conflicts of interest or are accompanied by content expectations. When an energy company that is often the subject of KPBS reporting expressed interest in contributing to the environmental fund, for instance, Karlo passed.

The station also gives its reporters guidance on handling donors who ask content-specific questions during station receptions. When funding that supported a full-time reporting position was not renewed at the end of the three-year commitment, KPBS kept the position anyway, Karlo points out. “We don’t want reporters to feel that their jobs depend on a particular funder,” he says. “Reporters must not feel beholden to donors.”

Can this work elsewhere?

KPBS now has ten funds, some content-specific, others funding non-content priorities at the station. This approach provides over $2 million a year and has allowed the station to add 17 content-related positions, including eight of its nine beat reporters. With the exception of the one reporting position mentioned above, renewal after the initial three-year commitment is 100 percent.

By any measure, this program is a success.

It is easy to dismiss this approach as something unique to San Diego, with its legions of well-heeled donors. But many stations have puzzled over longtime members who give only small gifts to them while making large gifts to other nonprofits. The fact that these members give to a station demonstrates that they think it’s worthy. The fact that they’ve helped for many years shows that they care. That they give less to you than to others suggests that they don’t see a reason to do more.

Whether you manage a nonprofit or a single production project, your job is to give donors the reasons to do more by listening when they reveal what they care most about and showing them how their passions align with what your station is already doing. By adapting this idea to your mission and community, you will raise far more than you do today — perhaps not $2 million, but more. And you will have satisfied donors who know why they give to you and are primed to help again.