Funding Matters

Today NPR’s member stations operate on funds derived from, approximately, 34 percent listener support, 24 percent corporate underwriting and foundation grants and 13 percent federal support through CPB allocations; the remainder comes from state and local governments and other sources such as return on investments and sales of transcripts and merchandise.

NPR’s current financial stability is attributable to several sources:

NPR member stations: An established “non-compete” policy keeps NPR from soliciting listeners directly; this is the domain of its 810 member stations, which rely on pledge drives, direct mail and telemarketing campaigns, online fundraising, and programming fees to build membership and revenue.

Corporate sponsorships and foundation grants: Corporate underwriting of NPR programming has grown substantially in recent years. In 2004, more than 150 corporations and associations—including Blue Note Records, The Economist, General Mills, HBO, Nike, PBS, Penguin Books, Toyota, Travelocity, and Wal-Mart—have provided funding from $1,000 to more than half a million dollars to NPR. Underwriters are recognized in 10-second spots delivered by NPR announcers, with wording that adheres to FCC guidelines.

The federal government: While still sensitive to the possibility of programming bias—left or right— the government continues to support NPR through grant distributions to member stations from CPB and federal agencies such the National Endowment for the Arts and the National Science Foundation.

The NPR Foundation: This endowment, formed in 1993 to support new initiatives, was bolstered ten years later when it received the lion’s share of McDonalds heir Joan Kroc’s bequest to NPR of $229.8 million, possibly the largest private gift to a cultural institution in U.S. history. This impressive bequest caused quite a stir in public radio. “I think everybody was completely caught off guard by the size of it,” says public radio consultant John Sutton, a former NPR research director. “[NPR] knew she was a fan and was likely to do something at some point, but nobody knew that this would be the scope of it.”

According to Barbara Hall, vice president for development and executive director of the NPR Foundation, “Mrs. Kroc’s bequest to the endowment helps to ensure the longevity and financial security of NPR.” But she explains, “Because she designated her gift as permanently restricted, the Kroc endowment must never fall below the historic dollar value of the original gift. For example, the [annual] payout represents only 4 percent of our $136 million budget for fiscal year 2006. Looking ahead, we do not anticipate that contribution to support more than 10 percent of NPR’s operating costs. Even with the revenue from the endowment, NPR must raise more than $55 million from foundations and corporations each year.”

To prevent potential donor influence on programming content, NPR has separated its fundraising and editorial departments. “People who give money may not lobby for causes in the news,” says Jeffrey Dvorkin, former NPR ombudsman. “Money given generously to NPR is placed into a broad bucket. There cannot be strings attached to the money. If it goes to foreign coverage, for example, it cannot go specifically to Middle East coverage.” Along with that policy comes what Dvorkin calls the “danger of self-censorship, one that we always have to keep in our consciousness. If we’re doing a piece that involves a funder, are we being unduly hard on them because we know they are an underwriter, or are we pulling our punches? The best approach is to talk openly about it in the newsroom so that we are able to do the story fairly.”

Through the years, Carnegie Corporation’s role as a supporter of NPR has been, “episodic but substantial,” according to Corporation research that led to the report, A Public Trust. “The Corporation’s early willingness to stand up and be counted as a generous supporter of NPR made an enormous difference in the organization’s survival and success,” says Hall. “Because of Carnegie Corporation’s leadership role in the philanthropic community, other foundations have noted the Corporation’s strong support for NPR and given generously themselves.”

In addition to its $1 million grant to help establish the Corporation for Public Broadcasting, Carnegie Corporation has since 1975 made contributions to NPR totaling approximately $3 million, much of it toward specific programming, including coverage of Third World development, presidential and congressional campaigns, the war on terrorism, education reform, international security and nonproliferation, and financial influence in political decision making. An interesting snapshot of the relationship between listenership and funding came about in the aftermath of the September 11th terrorist attacks. Carnegie Corporation and several other foundations upped their support when a dramatic increase in the number of listeners coincided with a decrease in corporate sponsorship due to economic uncertainties.

Hall believes that “Carnegie Corporation has helped NPR in two vital ways: First, the Corporation’s support strengthens NPR for news crisis periods that are often an enormous drain on NPR’s financial and human resources. Second, the foundation’s generosity has allowed NPR news to cover important subjects that have not always been widely covered elsewhere, such as our pioneering reporting on money and politics.”