The State of the System 2021 — Radio is Falling Further Behind

A few months ago, CDP hosted a webinar that looked at the state of individual giving to public radio and television through the end of the 2021 calendar year.

CDP President, Michal Heiplik, Daren Winckel, CDP’s Senior Director of Fundraising Strategy, and CDP’s Chief Customer Officer, Stephanie Patterson, provided a deep dive into the data from the National Reference File (NRF) of 187 stations that includes 90% of all public television donors and over 50% of public radio donors.

This is the most extensive collection of data on public media’s contributors, more than 4.3 million donors. Plus, the information from CDP’s analytics is timely, allowing stations to quickly turn the information and trends from the reports into short-term tactics and long-term strategies.

I’m devoting most of this blog post to the state of public radio’s individual giving efforts as there are several negative trends that should be significant concerns for stations.

The session opened with an environmental scan on the economy and the nonprofit sector. We looked at many of these issues in the February 10th edition of my Three Things newsletter for public media leaders. The Chronicle of Philanthropy’s Dan Parks also writes monthly on the economy’s impact on the nonprofit sector. The headline of his piece from March 15th was “Economic Data Shocks Charity Officials Just as They Were Hoping for a Post-Pandemic Boom.”

Turning now to the fundraising performance of public media, the results were a mixed bag, with more good news for public television than for public radio.

Public television is still riding the wave with PBS Passport with a year-over-year revenue increase of 8% in the Q4 of 2021 with a two percent increase in donors. Meanwhile, as the chart above shows, public radio saw a six percent year-over-year decrease in donors, 45,000 fewer contributors and only a marginal increase (1% and less than $1 million) in revenue.

However, if there is a headline from this session that would get your attention, it would be from the image below. 2020 was a year that donors stepped up in a big way to support public media because of the news cycle, and, for public television, stations saw significant growth in new members signing on through PBS Passport. But unfortunately, this was not the case in 2021 with first-year donors.

Public radio saw a 32% decrease in the median change in first-year donors in 2021 and a 22% decrease in revenue from first-year donors.

Public Television and joint licensees were also in negative territory (down 8.5% in first-year donors and down 3.3% in revenue), but not nearly as significant as public radio.

In sharing these results, CDP’s Michal Heiplik described the -32% as “really alarming.” He adds that coming off the big gains in 2020, a drop is not unexpected; however, a decline of this significance is “not normal.”

The CDP team pointed to some of the reasons for this drop-off:

· On-air pledge is not holding up for radio. It’s not doing particularly well for television either. Still, public television has been able to bring in new donors from other sources like PBS Passport, and many stations are now doing canvassing as an acquisition channel that’s working well.

· There’s been no significant digital strategy to acquire new donors to public radio.

· Local engagement by public radio stations doesn’t seem to be converting audiences to giving — at least not enough giving from first-time donors to keep pace with attrition at stations.[i]

· There’s a significant need for public radio to diversify its new donor acquisition efforts. This translates to the fact that on-air pledge cannot be the only tool stations use to acquire first-time donors.

What’s more, you can’t equate the drop in audience to this kind of change as a large part of the public radio audience is returning as we move farther away from the lockdown months of 2020.

The chart below from CDP’s Revenue Opportunity and Action Report (ROAR) library shows every public radio station that submitted data to the NRF. The graphic shows that only a few stations are experiencing new donor growth. The green color shows those who have performed the best compared to their peers — even when losing new donors, they lost less. Conversely, every station in yellow and red has fallen behind in acquiring new donors.

The CDP analysis notes that those stations with significant losses are without diverse acquisition channels for new members. By the amount of red you see on the graphic, that’s a lot of stations. As noted previously in the Three Things newsletter, not enough new donors are joining public radio stations to outpace attrition.

Another interesting comparison between public radio and public television was looking at revenue per donor (see the chart above.) Public radio saw a big jump in revenue per donor, from $187 in Q4 of 2020 to $198 in Q4 of 2021. Meanwhile, public television stations’ revenue per donor dropped in that same period from $158 to $131.

The reality is that public radio is bringing in more money from fewer donors, while it’s just the opposite for public TV: more donors giving less money. Public radio’s existing donors, primarily sustainers, are driving up the value of their giving to stations, which is a very good thing. However, the lack of new donors that typically give less with their first-time gift is driving that number up.

A primary reason for these results on the TV side is that the entry-level for PBS Passport is an annual gift of $60 ($5/month).

The webinar then turned to revenue retention, which is one of those metrics with long-term implications for stations’ individual giving efforts. But, as the headline on the graphic below notes, this is where things get scary for public radio.

First, in overall revenue retention (see the graphic above), there was a sharp decline for public radio from a year ago, with an 8-point drop from 95% in Q1 of 2021 to 87% in Q4 of 2021.[i] The reason for this was a decline in online and on-air donors. This kind of decrease is a trend you don’t want to see with a healthy individual giving program.

The chart to the right looks at the retention of first-year donors to public radio, dropping from 54% to 49%. This is even more worrisome because it indicates that first-year donors, at least those who gave in 2020, are not as loyal as we’ve seen in the past.

CDP’s Daren Winckel added that the first-year retention issue seems to be more related to one-time as opposed to monthly donors. However, the number of sustainers is down from previous years. This may not be a surprise because many donors may have given for the first time during the nonstop 2020 news cycle and chosen not to come back the following year.[i]

There was some positive news from the webinar for public radio stations:

For public radio, monthly giving (i.e., sustaining membership) efforts are paying off for stations. Monthly donors now make up 62% of the member files in public radio, with 50% of all individual giving revenue (up from 45% in 2020) now coming from sustaining donors.

Another positive is the growth in donors giving $1,000 or more[ii] to stations. Overall, public media stations increased the number of $1K donors by 6.4%, resulting in a 13.2% increase in revenue from donors giving $1,000 or more. In addition, public radio increased $1K donors by two percent with a seven percent increase in revenue. 

The CDP team adds that this increase can be attributed to technical enhancements through improved prospect research and the professional development of existing major giving staff at stations.

CDP’s Stephanie Patterson also says that there is a wide variance in station performance regarding their $1K giving programs. For example, some stations are doing well in adding and retaining $1,000 donors, but there seems to be no significant retention strategy for 50% of the stations that submit data to the NRF.

The biggest opportunity in public media is growing gifts of $1,000 or more with over $100 million in annual revenue possible by improved performance in this area.

Given this presentation’s trends, public radio faces a major challenge regarding its most important and reliable revenue source. The issue regarding the decrease in first-time donors is not just a development or membership department problem. This is an issue that needs the attention of leadership across the organization.

There’s the audience development opportunity to build the loyalty of new and existing listeners and readers through a station’s digital channels.

We need to become habit-forming for our audiences with newsletters, social media engagement, websites, streams and podcasts. Just as we look at listening occasions using Nielsen Audio data for our broadcast service, we need to be focused on how often audiences are returning to our digital content as a critical KPI to create the pipeline for those first-time contributors.

As was discussed in the webinar, it’s vital to create more acquisition channels to attract new donors. Perhaps it’s through canvassing or the opportunities that might exist with NPR’s upcoming podcast bundle concept that member stations might be able to take advantage of in a fashion similar to PBS Passport.

This data is also an opportunity for Greater Public to use this moment and devote a significant portion of the agenda at this summer’s PMDMC to addressing this challenge.

Here is a link to view the entire webinar on the State of the System 2021 from CDP.

**This is adapted from a post in Tim Eby’s Three Things newsletter for public media leaders published on March 24, 2022.

---

[i] This does not mean that stations should stop focusing on local engagement. What it does mean is that we need to develop a donor acquisition strategy that links to these engagement efforts.

[ii] During the webinar, Michal Heiplik rightly pointed out that most nonprofits would kill for 87% donor retention.

[iii] A few weeks ago, in the Three Things Datebook, I mentioned The Chronicle of Philanthropy webinar on “How to Retain Donors Who Gave During Crises.”

[iv] CDP describes $1,000 donors as “major donors” for benchmark purposes only. However, they recognize, as do I, that a “major donor” in most nonprofit circles is typically a donor giving $10,000 or $25,000 annually.