NPR’s board of directors approved a budget Sept. 14 that anticipates breaking even in the upcoming fiscal year following two years of deficits.
The budget allots for $292.8 million in revenue, which would be an all-time high for NPR, and expenses of $279.1 million, CFO Deborah Cowan told the board’s finance committee Sept. 9.
NPR is budgeting to break even on operating cash, a “key metric” that includes items such as capital expenditures and debt service, according to Cowan. The network is estimated to end the 2021 fiscal year with about a $2 million deficit, roughly half the deficit of FY20.
“We are not fully recovered or emerged from COVID,” Cowan said. But NPR has made “pretty good progress, better than we had actually planned,” she said.
Throughout FY22, “we predict that we’re still going to be pretty much in recovery mode for the most part,” Cowan said. “… But nonetheless, after two years of deficit spending, we thought it was pretty important to put a balanced budget back on the table.”
NPR is boosting FY22 revenue by drawing on $11 million in special distributions from its foundation that weren’t used in previous years, Cowan said. Endowment distribution income will grow by about 70% in FY22 over its projected amount in FY21, according to data shared by Cowan.
FY22 income is projected at 7% above FY21, while expenses are budgeted to grow 11%. The higher expenses can be attributed almost entirely to restoration of pre-COVID compensation and benefits, Cowan said. In the early days of the pandemic, NPR anticipated large deficits and worked with unionized employees on a plan to temporarily cut salaries and benefits and avoid layoffs. The FY22 budget restores those cuts.
NPR’s FY21 operating cash deficit will be smaller than expected due to “a great resurgence in sponsorship” and development exceeding expectations, Cowan said.
Development income grew in part from the “generosity and kindness of some huge anonymous angel donors” who gave NPR one-time COVID relief grants, she said. But development revenue is expected to fall in FY22 because NPR is not anticipating such grants during the fiscal year.
NPR’s capital expenditures, which are included in operating cash but not expenses, grew significantly in FY21 due primarily to a renovation of its New York City bureau. The project is expected to cost about $12 million, with the about $10.5 million paid for in FY21 and the rest in the coming fiscal year.
“It's important to have moved forward with this investment with five or six shows that are produced there,” Cowan said. “It's a critical beat for our business desk. It's a critical piece of backup for our IT infrastructure, and it's important from a competitive standpoint to have a footprint in the New York area.”
The renovations are upgrading the bureau’s technical infrastructure and production studios. “The changes we’re making will allow our studios to better support geo-dispersed teams, video production, and specialized podcast workflows in addition to standard radio production,” NPR spokesperson Isabel Lara said in an email.
NPR plans for staff to return to the bureau after Jan. 1 if renovations remain on schedule and if it is safe for them to do so, Lara said.