Jarl Mohn, named today as NPR’s new chief executive, will take over an organization with assets that many nonprofits would envy—including a well-known and respected brand that has a direct pipeline into the cars, living rooms, computers, and mobile devices of potential donors and corporate sponsors.
Mr. Mohn, 62, who will start in July, is a media veteran who founded Liberty Digital and headed E! Entertainment Television. He also worked as a disc jockey and was an executive at MTV.
His varied background will come in handy running an organization that is facing some daunting challenges as it adjusts to the digital revolution that is changing the way millions of people listen to radio.
NPR’s audience has mounted steadily since it was created in 1970, with about 27 million people now tuning in to programs like “All Things Considered” and “Morning Edition.” But the $178-million organization has been rocked in recent years by instability at the top and persistent budget deficits since corporate sponsorship declined during the recession.
NPR announced in December it was expecting a $6.1-million deficit this fiscal year and planned to reduce its 840-member staff by about 10 percent through voluntary buyouts.
The financial struggles persist despite the bequest in 2003 of about $235-million from Joan Kroc, widow of McDonald’s founder Ray Kroc, by far the largest gift public radio has ever seen, and a healthy fundraising haul last year.
Mr. Mohn will be the organization’s fifth chief executive in less than eight years following the surprise announcement in August that Gary Knell was leaving after less than two years on the job to head the National Geographic Society.
At the micro level, Mr. Mohn will inherit a board mandate to balance NPR’s books by fiscal year 2015. At the macro level, he will assume the role of de facto leader of the public-radio world, which entails navigating the often-fraught relationships with 264 member organizations that operate about 850 local stations.
And those relationships are getting more complicated as the traditional business model—built around the number of people who listen to terrestrial radio—is starting to fray. The terrestrial numbers determine how much public broadcasters can charge on-air underwriters, or advertisers, and how much stations pay for NPR programs.
But listeners are increasingly ditching their radios and turning to online streaming, podcasts, and mobile devices—and those numbers will only continue to grow once Internet-equipped “connected cars” start gaining market share.
Public-radio experts wonder how much longer people will respond to on-air pitches or direct-mail appeals from their local radio stations.
“We’re all looking to the future,” says Ellen Rocco, station manager of North Country Public Radio, in Canton, N.Y. “We all know that probably both of those key techniques, even if they’re still working, have a pretty limited half-life,” she says.
Web of Competing Groups
But finding new ways to raise money is complicated by the built-in tension among NPR, program producers, and local stations.
While many listeners may think of NPR in a generic way, the public-radio universe is a complex web of sometimes-competing organizations.
Local affiliates pay NPR dues and purchase its programs, providing more than a third of its revenue, and they elect the majority of NPR’s board.
But each has its own board or answers to a university board. Many are attached to public TV stations. Some are public-radio mammoths that produce their own national shows, like Chicago Public Media (“This American Life”) and New York’s WNYC (“On the Media”). Others are small rural stations that are having trouble getting by.
“Everybody in this industry talks about ‘we,’” says Doug Eichten, president of Greater Public, a public-radio fundraising and marketing group. “There is no ‘we.’”
Success at Stations
Thanks in part to philanthropy, the public-radio economy has not suffered the kind of meltdown other parts of the media landscape have—newspapers, for example, as they have lost print readers and advertisers.
Mark Fuerst, a public-radio consultant, says stations have made great strides over the past decade in seeking major gifts, defined as $1,000 or more. Those rose in inflation-adjusted dollars from just $3.8-million in 1999 to $55.3-million in 2012, according to Corporation for Public Broadcasting figures that he compiled.
But operating a public radio station or network, with its heavy reliance on technology, can be an expensive proposition.
NPR is not the only operation to cut staff. Minnesota Public Radio and its parent company, American Public Media—which produces many national programs including “A Prairie Home Companion”—have seen several rounds of layoffs since the recession hit—and reorganized in 2013 to create a “flatter, leaner management structure.”
NPR started running deficits in fiscal year 2009, when corporate sponsorship, dominated by the financial-services and automotive industries, fell by more than 20 percent, from $46-million to $36-million. Much of it has rebounded (to a projected $45-million in this year’s budget), and NPR raised $28-million from major donors and foundations last year, up 36 percent from the previous year.
The Kroc gift helped NPR expand its news staff, but most of it went into an endowment that has helped keep NPR’s deficits form spiraling even higher.
But the bottom line is that revenue has not kept up with expenses. Those include heavy investments in a news operation with 17 international bureaus and in digital technology. For example, NPR is working with six major public radio stations to develop a mobile application that allows users to customize a playlist of local and national public radio programs.
Limited Revenue Options
Emma Carrasco, appointed last year as NPR’s first chief marketing officer, is leading an effort to raise money from ticket sales and corporate sponsorship of live events. “NPR Presents,” which debuted last fall, includes some joint events with local stations, for example discussions about personal-finance with NPR hosts David Greene and Robert Smith, sponsored by the financial-services group TIAA-CREF.
NPR is also trying to attract more underwriting to digital products.
But other options for seeking new revenue are limited because, like any big nonprofit with affiliates, NPR must be careful about invading its members’ turf. NPR has a longstanding policy that bars it from soliciting money directly from listeners, and it has to tread carefully when seeking major gifts.
NPR executives sometimes dream about how much money they could raise with a nationwide capital campaign.
But local stations, which already send big chunks of money to NPR through program fees, are suspicious of efforts that could divert money from their own missions—which includes producing programs to serve local audiences.
Donovan Reynolds, president of Louisville Public Media, says many station managers worry that NPR is “cannibalizing” their audiences by distributing programs beyond traditional radio stations, for example, over iTunes.
Joint Fundraising
The Kroc gift, which NPR wooed in collaboration with its San Diego affiliate, KPBS, signaled that a joint fundraising approach on major gifts could pay off. Monique Hanson, NPR’s chief development officer, is now heading an effort to work with stations to get big donors to give both locally and nationally.
But some experts say NPR will eventually have to reach beyond major donors and into the pockets of everyday listeners. “Because stations are so resistant, it’s going to happen in a crisis,” says John Sutton, a public-radio consultant who worked at NPR for 10 years. “It will not be done thoughtfully in a way that will protect the whole radio economy.”
Mr. Sutton wrote on his blog last year that the audience that listens to public radio exclusively on NPR.org will eventually be big enough to provide significant revenue. “If NPR remains banned from asking them to give, then there will be one or two or five million listeners who are never asked to support public radio,” he said.
Mr. Sutton projects that NPR could raise at least $215-million annually from listeners through inexpensive fundraising pitches on NPR.org, podcasts, email, and social media—and split the money with stations, providing an average of $220,000 for local news and digital projects.
Steve Bass, president of Oregon Public Broadcasting, doesn’t buy it. He says NPR fundraising from listeners would be a “a dismal failure” because the cause is too generic. “The more distant people are from the sources of what they’re getting,” he says, “the less inclined they are to support it.”
Program Appeals
Some national public radio programs already seek money for their productions directly from listeners, bypassing the stations. “Planet Money,” an NPR program about the economy, took the approach to a new level last year when it started a campaign on the crowdfunding site Kickstarter to raise money for a reporting project to track the process of making a T-shirt around the world.
It hoped to raise $50,000 to help cover travel and manufacturing costs and offered a T-shirt to anyone contributing at least $25. The result? The two-week campaign raised almost $600,000 from more than 20,000 people.
“Planet Money” plans to use some of the funds to pay for a two-day training session for news directors on how to tell complex financial stories in an entertaining way.
But the success of that effort worried some station executives, prompting Mr. Fuerst to examine “listener to producer” gifts in his role as director of the Public Media Futures Forum research project. In a report he presented to program directors last fall, he said he had uncovered 33 Kickstarter campaigns that had raised a total of $1.7-million. An independently produced show about design, called “99% Invisible,” took in the biggest haul after “Planet Money”: $180,000.
He said the proceeds represented a minuscule percentage of the $440.5-million that stations spent to produce and buy programming in 2012. But he also discussed how the “digital disruption” could eventually eat into the listener-based revenue that NPR and local stations now earn from underwriting. The problem, he says: “Nobody’s come up with an online version of the pledge drive.”
He and others say mobile devices could provide the next big leap in public-radio fundraising—for example, by offering an easy way to donate to your local station while you’re listening to one of its programs. But some experts say it’s time for the public-radio world to plan a major meeting to discuss how to adapt to the changing listener and funding landscape. Mark Vogelzang, president of Maine Public Broadcasting Network and a former NPR fundraiser and board member, made a proposal like that in 2011 in the trade publication Current.
“Our audiences include literally thousands of our country’s best minds who would enjoy the challenge,” he wrote, ”including thinkers from all points on the political spectrum who have a deep interest in keeping public radio and TV strong in this country. We have not yet included them or invited them to help solve this dilemma.”
NPR’s Fiscal Year 2013 Revenue Sources
Editor’s note: This story was updated on May 15 to include the chart above.
Debra Blum contributed to this article. Suzanne Perry was communications director for Minnesota Public Radio from 2002 to 2004.
