NPR gets $200 million windfall; KSMU benefits indirectly

by Paul Schreiber

SBJ Reporter

pschreiber@sbj.net

Two hundred million dollars can go a long way. On Nov. 6, 32-year-old National Public Radio became the beneficiary of a $200 million gift from Joan B. Kroc, equal to almost two times NPR's annual $105 million budget. Kroc, the widow of McDonald's restaurant founder Ray A. Kroc, died Oct. 12 from brain cancer in Rancho Sante Fe, Calif.

Locally, KSMU 91.1 FM, an NPR member station since 1974, while not receiving a capital infusion from the bequest, "will benefit through the continued improvements in the NPR program service. No money from that $200 million gift from Mrs. Kroc is going to filter down to the individual stations," said Arlen Diamond, director of broadcast services for KSMU and Ozark Public Television.

Instead, the $200 million will be deposited in the NPR Endowment Fund for Excellence established in 1993 to cover periodic revenue dips, said Ken Stern, executive vice president for Washington-based NPR. Before this gift the fund was worth about $35 million, he added.

"The money was directed by Mrs. Kroc to NPR, so it will probably stay with NPR," Stern said. The $200 million won't be available for about six months, he added. NPR is made up of 270 stations nationwide with a total of about 750 separate signals.

Previously, NPR's largest gift was a $14 million deposit from the John D. and Catherine T. MacArthur Foundation to be distributed over a 10-year period, Stern said.

NPR gets about 50 percent its revenue from member stations for their dues and programming fees, 25 percent in corporate sponsorship money, and another 25 percent from foundations, Stern said. Mixed into this are some government funds and other revenue generated from entrepreneurial activities, he added.

Jenny Lawhorn, manager of NPR's media and public relations, said NPR disbursed its almost $110 million 2002 budget in the following manner: $40.84 million to news and information services; $20.94 million covered general administration; $12.94 million went to engineering services; $12.28 million was for distribution services; $6.89 million covered cultural programming; $5.18 for NPR online; $4.68 for the program center; $3.63 million was spent on member and program services; $2.85 million went to development; and $720,000 was spent on NPR II or its satellite radio services.

What comes in locally

More than half of KSMU's $1 million-plus 2003 budget is contribution dollars from corporate and individual donors. Corporate support comes in at $298,000 and membership moneys come in at $277,000, Diamond said. Beyond this, KSMU receives $183,000 from the Corporation for Public Broadcasting, $75,000 through grants and contract work, such as tower leasing, and a steady $250,000 from Southwest Missouri State University, he added.

Of these funds, about $418,000 was paid out in 2003 programming and production expenses, said Tammy Wiley, KSMU general manager. After this $326,000 went out for broadcast technical support, $12,000 for program promotions, $50,000 for membership and fundraising costs, $75,000 for underwriting expenses and corporate support and $134,000 for management expenses.

Both the spring and fall on-air fundraisers brought in about $100,000, said Wiley. Pledge fulfillment rates run at about 80 percent and are higher than NPR's national average, she added.

Who cares

About 47,000 listeners a week tune into public radio in southwest Missouri, Wiley said. And while numbers are climbing, new contributions don't immediately stem from this widening audience.

"There's still an education process. One of the challenges that we face is we get that spike in our listenership, but it generally takes two to three years then to get those people to become contributors," Wiley said. "So, we have some work to do to see our revenue increase at the same rate as our listenership has."

KSMU's largest single donation was a $480,000 gift from the C.W. Titus Foundation. It was slated for equipment acquisition after the station moved from its previous location, at the corner of Grand and National, to the south wing of Strong Hall.

Kroc contribution

The more than $200 million gift is coming from a charitable remainder trust of the Kroc estate, said Dick Starmann, spokesman for Kroc. NPR is the residual beneficiary of that trust, he added.

Instrumental in the Kroc donation to NPR was a 20-year relationship between Kroc and Stephanie Bergsma, Starmann said. Bergsma is associate general manager for development at public radio station KPBS 89.5 FM. The San Diego State University-based station serves about 220,000 listeners. It was Bergsma who introduced Kroc to NPR's president, Kevin Klose, he added.

KPBS announced a $5 million gift the same day NPR made its announcement. This is in addition to the more than $3 million Kroc had already given the station, Bergsma said. Of the funds, one-third would be added to the station's endowment, one-third would go toward operating reserve and one-third would establish an equipment replacement fund, she added.

Kroc donated to a number of organizations over her lifetime, including $50 million gifts to Notre Dame and more than $90 million to the Salvation Army. "If Mrs. Kroc believed in an organization and its mission and liked the people, that was a good combination," Starmann said.

"She would surprise us and just send a gift," Bergsma added. "That's the kind of philanthropist she was."