CPB

Overall

As CPB has done every year for more than two decades, CPB asked several station representatives as well as leaders of public radio's major national organizations to review the status of CPB's funding programs--station grants, the Future Fund and the Program Fund. This report summarizes their mid-April discussions, invites system comment, and sets the stage for the next phase of this consultation. This will focus primarily on system funding of rural stations, certainly the rural incentives of the station grants program, but also related Future Fund and Program Fund support.

An essential part of every consultation is an invitation for system comment at every step of the process. This consultation is no different. Though no specific proposals are on the table yet, CPB welcomes your thoughts and advice at any time.

These should be directed to:

Richard H. Madden, Vice President, Radio
Corporation for Public Broadcasting
901 E Street, NW
Washington, DC 20004
Phone: 202-879-9733
Fax: 202-783-1019
Email: rmadden@cpb.org

Minority and Rural Station Grant Incentives

The committee devoted most of its time to reviewing CPB's station grant rural and minority incentives. These incentives were created by a similar grants review process in 1992 for implementation in 1994. After five years experience, CPB thought it a good time to examine whether they work as intended and, if so, will they continue to do so. The committee reached two conclusions.

The station grant minority incentives work, will continue to do so, and should remain in place. Based on an analysis of the nonfederal financial support and station grants of the stations that benefit, the review committee concluded that incentives reach the intended target, make a substantial, measurable difference in the grants eligible stations receive, and enrich the services these stations provide.

Based on a similar analysis, CPB and the committee concluded that the station grant rural incentives do not work as intended. CPB and the committee believe that the current rural incentive approach appears ineffective in sustaining and increasing public radio's services to Americans living in remote and rural areas. They and we believe that the problems are likely some combination of the

level of investment,
the structure for investment--the current incentives may be a disincentive for necessary change, that is, the current incentives may encourage efforts for maximum dollars rather than maximum service.
the absence of linkages to service results, and
the failure to exploit alternative governance, management, and technological approaches.

Sending more money may appear to solve the first problem; but, it may not touch the others. That is because public radio needs to solve them in ways that go beyond station-based solutions to ones that yield multiple, sustainable services to their listeners. In considering solutions, we must remember that service to rural areas, as to any area, must be more than simply importing a distant signal. It must have, wherever feasible, a local character, including an appropriate combination of facilities and staff to originate programming from the community of license.

CPB and the committee don't have any solution in mind. That is why we will enlarge the conversation. We will extend the consultation so that CPB, the committee, and the public radio system can offer and consider different approaches. These approaches should engage the full array of resources--station grants, the Future Fund, and the Program Fund.

The next step in the consultation will be to meet with some of the current beneficiaries to the existing rural incentives and brief the public radio regional organizations at the Public Radio Conference. The review committee will meet again in mid-summer. CPB will review any alternatives that emerge with the public radio system, including discussions at the Fall regional meetings.

Audience Service Standard

The committee also studied CPB's implementation of the new Audience Service Standard eligibility criterion last fall. The committee reaffirmed the principles of the Audience Service Standard--public radio's goal to become more self-sufficient, the need to be more efficient, more effective, and more accountable to the listeners it serves, while preserving public radio's core values, including the preservation of its noncommercial franchise, station, and audience diversity, and the capacity to reach as many Americans as possible. The committee also endorsed the higher levels already set for 1999 and 2000. They asked for additional information before considering any additional increase in these criteria for 2001 CSG station grant eligibility.

Future Fund

Toward Achieving Public Radio's Revenue Ambitions

1995's significant challenge to public broadcasting's federal funding was the evident factor prompting the creation of the Public Radio Future Fund and the introduction of an audience service standard. At the time, public radio set a development goal--generating significant new non-governmental dollars, on the order of $60 million to $100 million annually. Public radio is on course to achieve that goal. Station nonfederal revenues grew about $90 million from 1994 to 1997, with about half coming from audience sensitive income.

While the challenges to federal funding and the creation of the Future Fund are important, other, more compelling and longer lasting factors have emerged. The most important are public radio's increasing maturity and self-confidence in programming and fund raising. Consequently, stronger audience service has created the energy that allows public radio to tap a broader array of fund raising mechanisms that will necessarily and appropriately broaden its financial base.

The Future Fund's single most important contribution is the focus placed on the real and multiple opportunities to secure untapped, non-governmental revenues for public radio stations. Through funded projects and local initiatives, stations have engaged in the most intense sequence of performance-driven development activities in public radio history. Stations are also actively exploring new ways to become more productive not just in revenue production but in the level and range of services they provide listeners. This includes efforts to improve audience service as well as initiatives to reinvent the way stations work with one another to increase productivity and also so they can devote relatively more dollars to programming. Finally, the Future Fund has helped to attract new development talent to public radio and aided in the reinvention of the Development Exchange as an increasingly essential station resource.

Putting Future Fund Activities In A Time Perspective

Though the Future Fund is in its third year of operation, virtually all Future Fund supported activities have been underway for two years or less. For instance, the first contracted Future Fund project, the SRG's Leaders Partnership project, held its first planning meeting in May 1996. AudiGraphics seminars began in fall 1996. And so forth. So, we're only now seeing the first projects come to fruition and we're just coming into a period of time when there are results to share.

That is why the review committee recommended that a key Future Fund activity of the next year should be to engage in a detailed assessment of project outcomes. Did projects achieve their goals? What have we learned? Are the results replicable across the system? If so, how can we accelerate that process? If not, why not?

Toward Systemwide Benefit from Future Fund Projects

There was review committee consensus about the importance of organized, accessible communication by CPB and by Future Fund recipients concerning processes and results that enable Future Fund recipients to strengthen their financial capacity. This will provide valuable information and insights to all CPB-supported stations and will contribute to a more efficient growth process. Stations need to know more about what's happening, what has worked, what didn't, and why. Though more than 250 stations directly participate in Future Fund projects, the review committee stressed how important it is to actively share information, inspiration, and experiences as widely as possible, particularly given the mutual investment aspects of the Future Fund.

Creating New Businesses

The Future Fund has influenced the reallocation of time and the focus of energy for public radio's top development experts--Barbara Appleby, Doug Eichten, Mark Fuerst, Cathy Ives, Loretta Rucker, John Sutton, and Kay Tuttle to name a few. Public radio now benefits from Marc Hand's and Susan Harmon's capabilities in ways it has not enjoyed for years. Jim Lewis and Helen Kennedy are working about as much in public radio as they are in public television. When combined with consultants and firms new to and attracted to public radio, such as Bob Stein and Jim Taszarek or the Results Group and Target Analysis, CPB's Future Fund has elevated the development expertise available to public radio and helped poise public radio to achieve the revenue generation promises many believe is possible. Because many of these individuals operate independently, they may now charge for services that once may have been free. The committee viewed this outcome as the inevitable and appropriate cost of improving the character and quality of public radio's development activities.

On more defined issues, CPB and the advisory committee agreed that only a couple of Future Fund projects might conceivably yield continuing revenues that could be retained by a Future Fund recipient. One is the Musicsource, a project in which stations that voluntarily choose to
participate directly share in the proceeds. The other is the proposed Membershop, an effort, still in the planning stages, to create a membership service bureau capable of providing consolidated back-room support for stations.

Program Fund

For the past two years, CPB has employed the same Program Fund priority--for projects that will strengthen stations' audience service. CPB adopted this priority based on the system's recommendation. A review committee considered this priority and believes that it remains consistent with the strategic direction for public radio programming at the national level over the coming years.