Examining the revenue performance of public radio organizations from 2008-2013 may offer us clues about how the COVID-19 pandemic will affect public radio revenue in the months and years ahead.
In the fall of 2008, the U.S. government placed Fannie Mae and Freddie Mac into conservatorship, Lehman Brothers Holding filed for Chapter 11 bankruptcy protection, and President Bush signed into law the Emergency Economic Stabilization Act that created the $700 billion Troubled Asset Relief Program (TARP). These events marked the beginning of the 2007/2008 financial crisis, also called the Great Recession.
We’ve analyzed what happened next to the four biggest sources of public radio’s funding: membership, mid-level giving, major giving, and corporate support. Our analysis is based on data from 47 stations that participated in Greater Public’s Benchmarks for Public Radio Fundraising in each of the years between fiscal year 2008 (July 1, 2007 – June 30, 2008) and fiscal year 2013. These 47 stations have all of the data needed for a full analysis of the four key revenue areas, meaning they create a true “same store” analysis. Our same store ensures that conclusions are drawn from changes in fundraising results and/or potential and not the result of a different mix of stations from year to year.
Benchmarks defines the three core areas that comprise the individual giving portion of audience-sensitive revenue as follows:
Membership: cumulative annual giving between $1 and $249
Mid-level: cumulative annual giving between $250 and $999
Major: cumulative annual giving of $1,000+
Greater Public’s Benchmarks uses annual listener hours as a basis to track a single station’s fundraising performance over time and to compare all stations on a level playing field. Stations are measured and compared based on their efficiency at converting a single hour of listening to givers and giving (revenue).
Listening = fundraising potential
Fiscal year | Annual Listener Hours | Gain or loss year over year | Gain or loss FY08 – FY13 |
2008 | 4,201,142,400 | ||
2009 | 3,707,558,400 | -12% | |
2010 | 3,362,049,600 | -9% | |
2011 | 3,785,308,800 | +13% | |
2012 | 3,168,110,400 | -16% | |
2013 | 3,212,227,200 | +1% | -24% |
The amount of listening in this same store of stations decreased 24% from FY08 – FY13, meaning that these stations’ fundraising potential decreased by 24% over this period. If revenue had decreased at the same rate over the same period it would be reasonable to conclude that the decline in revenue reflected a loss of fundraising potential, not the effects of the financial crisis. Benchmarks aren’t designed to tell us whether there’s a link between the financial crisis and the decline in listening.
Membership revenue ($1 – $249 cumulative)
Fiscal year | Total same store membership revenue | Gain or loss year over year | Gain or loss FY08 – FY13 |
2008 | $64,649,155 | ||
2009 | $71,430,670 | +10% | |
2010 | $75,597,933 | +6% | |
2011 | $81,641,500 | +8% | |
2012 | $82,830,203 | +1% | |
2013 | $85,060,836 | +3% | +32% |
In spite of the loss in listening, membership revenue increased in each of the five years following the beginning of the financial crisis. The overall increase in membership revenue from 2008 to 2013 was bigger than the overall decline in listening for the same period. Many factors could explain the increase in membership revenue as listening decreased, but the one certainty is that the financial crisis did not result in a decrease in what is typically public radio’s most resilient source of funding.
Mid-level revenue ($250 – $999 cumulative)
Fiscal year | Total same store membership revenue | Gain or loss year over year | Gain or loss FY08 – FY13 |
2008 | $34,242,755 | ||
2009 | $32,769,327 | -4% | |
2010 | $34,436,991 | +5% | |
2011 | $39,508,695 | +15% | |
2012 | $41,494,951 | +5% | |
2013 | $42,988,606 | +4% | +26% |
Mid-level giving revenue grew at a slightly lower rate compared to membership revenue and there is a year-over-year decrease from FY08 to FY09 that could be explained by the financial crisis.
Major giving revenue ($1,000+ cumulative)
Fiscal year | Total same store membership revenue | Gain or loss year over year | Gain or loss FY08 – FY13 |
2008 | $15,652,881 | ||
2009 | $15,821,169 | +1% | |
2010 | $17,138,727 | +8% | |
2011 | $20,596,722 | +20% | |
2012 | $20,566,112 | No change | |
2013 | $21,045,616 | +2% | +34% |
Major giving revenue grew at a rate comparable to membership revenue. Public radio’s increased focus on major giving could explain the modest increase in revenue from FY08 to FY09. The increase might have been bigger if the country hadn’t entered a financial crisis, but public radio also might have experienced a decrease in major giving revenue if stations’ hadn’t been increasing their attention on this area of fundraising as the crisis unfolded.
Individual Giving Analysis
Public radio saw considerable growth in individual giving from FY08 to FY13, but the year-over-year increases tell a cautionary tale, especially in mid-level and major giving in the first year of the financial crisis. Many factors influence public radio’s fundraising results. We can’t conclude that the financial crisis caused the slower growth in mid-level and major giving in the year after the turmoil began as compared to the following couple of years, but it’s reason enough to curb expectations.
Corporate support revenue
Fiscal year | Total same store membership revenue | Gain or loss year over year | Gain or loss FY08 – FY13 |
2008 | $87,532,892 | ||
2009 | $80,515,765 | -8% | |
2010 | $80,791,372 | No change | |
2011 | $86,684,761 | +7% | |
2012 | $91,058,032 | +5% | |
2013 | $101,550,747 | +12% | +16% |
Corporate Support Analysis
Corporate support is a different story. Revenue grew 16% from FY08 – FY13, but revenue decreased from FY08 – FY09 and remained flat from FY09 – FY10. It took three years for public radio’s corporate support to fully recover and four years for it to begin to grow.
Overall Conclusions
The financial crisis had some effect on public radio’s mid-level and major giving but its biggest impact was felt in corporate support. The COVID-19 crisis is following a similar pattern so far. Listener support remains resilient, for now. There are significant differences between the financial crisis of 2007/2008 and the coronavirus crisis. These differences suggest that public radio’s fundraising history in the years following the start of the 2007/2008 financial crisis might not be the best indicator of what’s to come.
The unemployment rate is higher in the COVID-19 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.
Given that corporate support accounts for about half of the total funding at many public radio stations including some of the biggest stations, we might be well served by looking at the economic patterns of the Great Depression for the lessons we need today.