What’s Past Is Prologue: What We Can (and Can’t) Learn From the Last Recession

We are all looking at our budgets. How will 2020 end? And what assumptions should we make for revenue in 2021? To borrow a quote from screenwriter Willian Goldman, “Nobody knows anything.”

We are far from the end of the story about how the COVID-19 pandemic will affect our lives, our communities, our economy, or our public media organizations. As we all prepare our worst-case, bad-case, and less-bad-case scenarios, I can’t help but look back at how public media weathered the Great Recession of 2008.

I have no doubt that all of you have done due diligence on how your individual organizations performed from 2008-2010+ for clues on how to imagine things unfolding. For a system-wide perspective, Greater Public analyzed relevant station data from our Benchmarks reports from the recession years, and we’ve gathered insights from several other data-minded colleagues at national organizations.

Public Radio Individual Giving Tells an Optimistic Story

Based on data from a consistent group of 47 public radio stations that participated in Benchmarks from 2008-2011:

• Membership actually increased year over year, up 10% in 2009 over 2008 and then up an additional 6% in 2010.
• Mid-level giving ($250-$599) decreased by 4% in 2009, but rebounded to plus 5% in 2010.
• Major giving ($1,000+) increased by 1% in 2009, and by an additional 8% in 2010.

Total individual giving, including membership, mid-level, and major giving, increased by 5% in 2009, and by an additional 6% in 2010.

Blackbaud’s Target Analytics for Public Media Giving affirms the trend among 45 participating public radio stations, with increases of 3% and 5% in 2009 and 2010. Over the same time period Target Analytics reported decreases in revenue for public television of 8% and an additional 3% in 2009 and 2010. (For more on system-wide radio and TV data, see Public Media Company’s analysis of CPB revenue and expense data summarized in Current.)

For context, Blackbaud’s donorCentrics National Index of Direct Marketing Trends reported a 2% decline in giving to nonprofits across all sectors in 2009, with an increase of 4% the following year.

Corporate Support Was Hard-Hit, Then as Now

As we’re seeing unfolding right now, history shows that corporate support was the revenue area most affected by the Great Recession.

• Based on data from our group of Benchmarks stations, corporate support fell by 8% in 2009, was flat in 2010, and rebounded by 7% in 2011.
• Market Enginuity saw a similar trend among its 6 top-40-market clients over that time period: an 8% decline in 2009, an additional 3% decline in 2010, and a 6% rebound in 2011.
• Public Media Company’s analysis of system-wide data also shows a decline for radio from 2008 to 2009 and flat performance from 2009 to 2010.

Conclusions?

The impact of the Great Recession was felt most in corporate support. The COVID-19 crisis is following a similar pattern to date. Listener support appears to be resilient, so far. But again, we are far from the end of the story of this crisis.

Greater Public advisor Jay Clayton points to two significant differences between the Great Recession and the COVID-19 pandemic – realities that inspire a much more cautious outlook:

The unemployment rate is higher in the coronavirus crisis. Some analysts say that unemployment could reach levels America hasn’t experienced since the Great Depression of the 1930s. If this happens, public radio likely would see a significant decrease in all segments of individual giving. 

Public radio has never had to survive at a time when nearly all American businesses have had to close their doors without knowing when they’ll reopen or whether they’re entering a year or more of intervals of having to close and reopen as cases of the virus rise and fall. 

We know that challenges can lead to innovations. For example, over the past ten years post-recession, public media’s focus on sustained giving has had a major influence on the stability of our membership revenue. In this period of extreme challenge, I look forward to working with all of you on the breakthroughs that will move us to achieve our best new future.