Three Things for June 17, 2021
This is the June 17th edition of the Three Things newsletter for public media leaders from the Public Impact Group.
Here’s what’s up this week:
Philanthropy in 2020
The Pledge 1% Movement
Will Apple’s Podcast Subscription Service Become a Public Radio Paywall?
THING ONE: Philanthropy in 2020
Giving USA 2021: The Annual Report on Philanthropy for the Year 2020 was released earlier this week, reporting that total charitable giving increased by 5.1% (in current dollars) with individuals, bequests, foundations, and corporations giving $471.44 billion to U.S. charities in 2020.
Giving by foundations increased 17.0%, to an estimated $88.55 billion, reaching its highest-ever dollar amount. Foundation’s giving to charities represented 19% of total giving in 2020, its largest share on record.1
Individual giving increased by 2.2%, while giving from corporations declined in 2020 by 6.1%. It’s noted in the report that this type of giving is highly responsive to changes in corporate pre-tax profits and GDP, both of which declined in 2020.
The Giving USA report noted that donations to the arts, culture, and humanities (usually the place where public media is classified) suffered a decline of 7.5% in 2020. The impact of the pandemic on these institutions was significant, coupled with the shift in giving priorities last year, ranging from the increased interest in supporting health-related charities, food assistance programs and a sharp focus on addressing systemic issues facing communities of color in America.
This data comes on the heels of the findings from the Corporation for Public Broadcasting shared at the Public Media Business Association conference earlier this month that reported revenue for CPB-funding radio and television stations down by $147 million, or 5% in fiscal year 2020.2
The CPB “State of the System” analysis reported by Current noted a 14% YoY decrease ($66 million) in corporate sponsorship and $60 million less in foundation revenue (32%) in FY 2020 when compared to FY 2019.
All of this data is worth a deeper dive, and it’s worth remembering by the chart above that the largest share of philanthropy comes from individuals.
THING TWO: Growing Corporate Philanthropy (not sponsorship) for Public Media
For some, it’s stunning to see that corporate philanthropy only accounts for 4% of all giving to charity. However, it is also important to note that most of the revenue from businesses and corporations in public media for on-air and digital sponsorship comes from advertising budgets, not corporate philanthropy.
That’s where an idea detailed in a recent story in TechCrunch has stayed with me as a high-impact opportunity to grow corporate philanthropy in America and around the world — and that public media could position itself well to be a recipient for some of those gifts.
The piece in TechCrunch briefly told the story of the corporate philanthropy organization Pledge 1%. Pledge 1% was co-founded by Salesforce founder Marc Benioff and Atlassian co-founder Scott Farquhar, among others.
Since its launch in 2014, Pledge 1% has asked founders to donate 1% of their companies’ equity, profits, product, or employees’ time starting on their first day of business. Yahoo Finance reported last week that Pledge 1% is looking to unlock billions in new philanthropy with the launch of Boardroom Allies.
The founding group of top venture capitalists (VCs) have committed to unlocking $5 billion in new philanthropy over the next five years by partnering with Pledge 1% to advise their portfolio companies on how to set aside equity for social impact prior to their liquidity events. Amidst a heightened focus on the role businesses play in fostering societal change, Boardroom Allies will play a pivotal role in ushering in a new era of corporate giving.
Pledge 1% is an entity that establishes the framework to enable companies to begin their corporate philanthropy in its earliest stages. By doing so, it’s establishing philanthropy as a general operating principle and is seeking to build community and thought-leadership in this space.
So how can public media work its way into this conversation as a recipient for some of this corporate generosity?
The role of public media as a solution for the crisis in local news is the first step. We need to continue to make the case that local news is vital to a strong democracy and that public media is committed to filling that role in communities across America.
Lauren Harris reinforced that belief this week in The Journalism Crisis Project newsletter, noting that “There is significant evidence that localized, trustworthy information is essential to democracy, but it does not have to take the form of a traditional print newspaper.” So who better than public media, where we’ve already established a revenue model that is being duplicated by others in nonprofit and for-profit news, to be a key player in communities large and small across America.
Second, the reach and impact of public media in communities across the country could help reinforce and build this movement of corporate philanthropy. Third, we align the benefits that we’ve given to corporate sponsors over the years with Pledge 1%'s benefits to encourage participation in this movement.
This is taken directly from the Pledge 1% website:
Pledge 1% boosts your bottom line.
87% of consumers believe corporations should place equal weight on business and supporting communities.
59% of Americans are more likely to buy a product associated with a corporate-nonprofit partnership.
Companies with engaged employees see a 26% higher revenue per employee & 13% higher total returns to stakeholders.
By comparison, let’s go back to the long-standing halo-effect research for public radio:3
It’s the perfect marriage.
The Pledge 1% movement is an opportunity for corporate philanthropy to play a more prominent role for local public media organizations. First, however, we need to organize ourselves to take advantage of this opportunity. The effort of the Local Media Association in establishing the Fund for Local Journalism is an example for us to explore as we seek to collaborate and tell our story more effectively. I’m currently reaching out to the team at Pledge 1% about how public media could work with them as partners and report back in a future edition of Three Things.
THING THREE: Will Podcast Listeners Pay for an Ad-Free Podcast?
The long-awaited roll-out of the Apple Podcast Subscriptions went live on Tuesday (June 15). Unfortunately, some reviews of the app update have been less than kind, but it’s unlikely that bad reviews will impact the dominance that Apple has had in the on-demand audio space.
From Hot Pod News, Nicholas Quah offers his take that the subscription model may be more beneficial for larger publishers because of the workflow needed to create two different products: one that’s an ad-free product and one with advertising.
I’m a little skeptical that offering an ad-free product is enough to push people into paying for something that they can get for free if you want to sit through (or skip past) some advertising. There’s also some growing evidence that consumers are concerned about the increasing number of subscription fees they are paying for media content, as detailed in Jacobs Media TechSurvey 2021.
Another research study of podcast listeners in March 2021 from Signal Hill Insights with Cumulus Media found exclusive and original content, not ad-free listening, would most influence a decision to pay for a podcast.
If it’s creating exclusive content that will draw listeners to pay for content, how does public media still position itself as a place with universal access to our content? For example, the PBS Passport model has worked because the offerings on Passport were available to “non-paying” audiences at some point in time.
Do we move to a place where we’re putting some of our content behind a paywall for public radio? Up to this point in time, we’ve not had to answer that question other than for the few stations who experimented with pledge-free streams for members during on-air campaigns. And I would classify that as something a little different than offering exclusive content to paying podcast subscribers.
This is an essential question that the system needs to address moving forward. Much of nonprofit media outside of public radio and television has made it a point that its content should be accessible to all who want it.
Should public radio be willing to make that commitment as well?
That’s all for now. Thanks for reading.
The estimate for giving by foundations was created by the Indiana University Lilly Family School of Philanthropy using data from Candid.
It should be noted that a portion of fiscal year 2020 for public broadcasters would have occurred before the onset of the pandemic in March 2020.
There is a question as to whether the “Halo Effect” resonates as strongly in digital as it does via broadcast, but that’s for another day to discuss.