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Get the latest, most relevant information about the business of public media. Read breaking industry news and learn best business practices. Find out about upcoming PMBA conferences, toolkits, and roundtables. Discover educational programming from a variety of public media organizations as well as opportunities to enhance the professional capabilities of your staff in areas such as management, finance, accounting, and human resources.

March 25, 2015

Developing a Tactical Fundraising Calendar for Your Organization

The tactical strategy for your fundraising should not be random, and it shouldn't be based on a "we'll figure this out as we go along" mentality. Your best bet to ensure maximum revenue is to lay out a tactical fundraising calendar as part of your overall fundraising plan. 
March 20, 2015

Pilot stations are beta-testing PBS’s premium content service for members

A limited beta test of PBS Membership Video on Demand (MVOD), a premium TV content service for contributors to stations, began at several broadcasters. Once up and running, MVOD will give stations a hook to draw new members with a perk of exclusive access to certain PBS programs.
March 20, 2015

NPR’s new news chief will seek to boost partnerships with member stations

The new top news executive at NPR hopes that increased collaboration with the network's member stations can produce stronger local and national journalism. NPR announced the hiring of Michael Oreskes as senior VP for news and editorial director. He begins in the position April 27. Oreskes will report directly to NPR President and CEO Jarl Mohn, under the new management structure Mohn implemented in October 2014. 
March 17, 2015

Five Tips To Better Manage Nonprofit Finances

Neela Pal, consultant at Fiscal Management Associates, writes: "In my decade working in the sector, every nonprofit I have encountered has been preoccupied with bringing in more money. Much rarer, however, is the nonprofit that carefully scrutinizes how existing dollars are being used. Here are five tips on how to maximize the limited financial resources of a nonprofit organization, without raising another dollar." 
March 13, 2015

A Moving Target: The regulation of online fundraising platforms

The National Association of State Charity Officials (NASCO) posted a document on its website titled "Internet and Social Media Solicitations: Wise Giving Tips." True to its title, the document laid out advice on issues relating to fraudulent and deceptive solicitations, charities' control over the use of their names on fundraising platforms and transparency in fundraising platform policies. But in what seems less a tip and more of a warning, it mentioned that certain fundraising platforms might be subject to state registration and reporting requirements.
February 11, 2015

The CFO's Overhead Dilemma

The CFO’s Overhead Dilemmaby the Public Media Business AssociationPublic media’s finance professionals must strike a delicate balance when dealing with “the overhead myth.” As a system, in general, our administrative and fundraising overhead costs are high relative to many other nonprofits. Charity Navigator’s Financial Ratings Tables acknowledges that public broadcasting and media’s high expenses are a function of the business: These charities use expensive air time to raise money, requiring a higher investment in their fundraising efforts and thus raising fundraising costs. Among these charities, the median fundraising expenses percentage is higher than the median of all of the charities we rate.In addition, many stations have unique operations that impact ratios and appear to drive up overhead expenses. For example, a station that has for-profit subsidiaries that contribute profits to the station’s mission based work also has to address the fact that those subsidiaries can make overhead look even higher. In other cases, a CFO may only use the overhead ratio for managing certain grants. CFOs know the importance of working with their general managers and fundraising professionals to shift the conversation away from administrative and overhead expenses to a focus on the impact the station in making. Our industry in particular is continuously evolving and requires stations to invest significantly in the product in order to keep it relevant. A singular focus on tracking and reporting a nonprofit’s administrative and overhead costs is considered by many CFOs to be outdated.As much as CFOs are anxious to debunk “the overhead myth,” the reality is that many potential donors are looking at these metrics and paying close attention to overhead. Funders and donors are smart, and they do their research by looking up a station’s GuideStar ratings or reading a station’s 990s. This is the type of information the donor community researches, so when a foundation looks up causes, public media often looks inefficient. Whether or not they employ the overhead ratio as a key metric, CFOs have many reasons to closely monitor overhead. It is important to monitor what is reported as functional expenses in audited reports because of the stigma associated with nonprofits that report higher administrative, marketing, or fundraising expenses. Even beyond using the information to gain philanthropic and corporate support, close monitoring of overhead and fundraising expenses enables the CFO to understand, report, and strategize for diverse revenue streams.CFOs make sure to monitor expenses by functionality. Programs such as direct mail, telemarketing, pledge, and sustainer programs are monitored for effectiveness and efficiency, including expenses and the cost to raise a dollar. This analysis is a fairly straightforward exercise in a data-driven culture. High-touch major giving efforts that result in significant annual fund gifts, capital campaign gifts, and planned giving promises require a different type of consideration. Different metrics are necessary for these efforts as the cost to raise a dollar can present a skewed perspective. A metric such as the average major donor net revenue per full time employee (FTE) is a more useful way to look at major giving. This is an example of how CFOs are developing meaningful metrics and using them to educate funders, management, and other current and potential stakeholders. In many cases it is important to track, review, and present metrics across fiscal years for impact. For example, an investment in donor acquisition frequently shows a net loss in a single fiscal year. However, over multiple fiscal years this is an important file building activity for a strong membership program. Sustaining memberships are another area that needs to be analyzed over multiple fiscal years to get the full financial picture. This often seems to be an area of misunderstanding between the finance and development departments, sometimes exacerbated by a renewed focus on overhead.Another area where station leadership and decision-makers need to take a long view is digital. When looking at digital initiatives, financial indicators can be lethal. The decision to invest and maintain a digital presence is something that is embraced by the public media system and key for positioning survival in the years to come. However, there is not a sustaining business model in place as of yet. Stations are investing in digital as a long-term strategy, with the full intent that eventually digital will be self-sustaining. These investments can only happen with the support and vision of station governance and leadership who look at long-term impact and innovative methods to meet the station’s mission. Transparency and communication at all levels is important. Including general expenses by category in your annual report and on your website offer the opportunity to be transparent and begin the conversation about why your business is run a certain way and what it really costs to meet your mission. Make sure that management, your major giving team, and key customer service representatives understand the nature of these expenses and can talk about them with your donors.As you build trust with your stakeholders, potential funders, and management, then you can shift focus to impact. Public media needs to communicate impact measurements internally and externally and ultimately, make impact part of the funding culture.CFOs continue to work with stakeholders to get their buy-in on the goals, help them understand the reporting mechanisms, and educate them about how reporting ties to the organization’s strategic goals. Although many overhead expenses are justified and unique to public media, the finance department continues to find ways to reduce overhead expenses through new efficiencies. Researching and establishing shared administrative and fundraising services is an opportunity to scale back on the duplicative efforts stations utilize to reduce expenses and free up additional resources for mission based work. There are many exciting possibilities which would allow stations to remain relevant to the community while outsourcing certain operational functions or consolidating our back-office and fundraising activities – much like the technology collaborations (i.e., shared master controls) that have already taken place.Special thanks to the following PMBA Board members for contributing to this article: Esperanza Flury, Assistant General Manager & CFO, WXPN; Ron Hetrick, Senior Vice President, WITF Public Media Center; Mark Leonard, Vice Chair, General Manager & CEO, Nebraska Educational Telecommunications; and Jun Reina, COO/CFO, Capital Public Radio. Carl Pedersen , VP of Finance and Technology, Nashville Public Radio, also contributed.originally published in Greater Public’s February Edge Newsletter 
February 11, 2015

The Overhead Myth: What Impact Really Costs

The Overhead Myth: What Impact Really Costsby Amie Miller, Greater Public foundation support advisor Nonprofits – and funders – want their work to have impact. We talk a lot about how to measure impact, but a related question is equally important: What does impact cost? It’s an essential question. What are the real costs involved in building, implementing and sustaining effective organizations and programs? One method that has been used to assess nonprofit effectiveness is the “overhead ratio” – the percentage of an organization’s total expenses that is devoted to administrative and fundraising costs as opposed to program costs. Unfortunately, this proxy for effectiveness has led to what has been called the “nonprofit starvation cycle,” where nonprofits attempt to operate with ever-lower overhead costs – often grossly under-investing in their own infrastructure and significantly underreporting their true overhead costs.Increasingly, both funders and nonprofits are recognizing that the idea that low overhead equals high effectiveness is a myth. And the truth is, there’s not just one overhead myth; there are several.Overhead Myth #1: There’s a definition of “overhead.”Weirdly, there really isn’t. Different organizations (both nonprofits and funders) include various kinds of costs under the heading of “overhead.” The IRS Form 990 asks nonprofits to divide all of their costs into three expense categories: Program Service expensesManagement & General expenses Fundraising expenses. But exactly what these categories should include is not clear. “I think part of the problem is that everyone has a different understanding of overhead,” says Heather Peeler, vice president of member and partner engagement at Grantmakers for Effective Organizations. “Even grantmakers don’t really understand it.” As a result, many nonprofits do not invest in – or even include in their budgets – the full costs of implementing their work or of building their capacity, and many funders do not push the issue. As Peeler adds, “One grantmaker’s definition of capacity-building is another’s definition of overhead. Grantmakers for Effective Organizations thinks that you can’t have effective programs in weak organizations. If you want strong results, you have to invest in the whole organization.”Overhead Myth #2: Overhead costs are not program costs.The lack of clarity around overhead costs is mirrored in a lack of clarity around program costs. “There is no definition for what is allowed in a program budget or not. So each organization does it differently,” says Unmi Song, president of the Lloyd A. Fry Foundation. Song argues that costs like rent, utilities, and technology are essential to running programs and should, therefore, be allocated across program budgets. Unfortunately, she notes, “Staff training, administrative support, a strong accounting office, a strong budgeting process, and up-to-date technology sometimes fall out of the program budgets. Training is generally specifically for a program. Evaluation, I believe, should be allocated toward program. A lot of nonprofits would really benefit from understanding that those are costs that definitely belong in project budgets.”Overhead Myth #3: You can’t talk to foundations about overhead.Many nonprofits are reluctant to talk directly with foundations about overhead, perhaps out of concern that overhead expenses make them look like ineffective stewards of resources.While it is true that some foundations put a cap on the amount of overhead they will fund, there is evidence that many grantmakers are willing to discuss overhead costs. A 2014 survey by Grantmakers for Effective Organizations found that:77% of foundation respondents actively support capacity-building activities. 53% said they would be open to allowing a “significant proportion” of project grants to cover indirect costs “if it was justified.” 62% said they make decisions about how much overhead to allow on a case- by-case basis. Only one-quarter had a written policy about support for indirect costs.“I think that for nonprofits, the door is open in terms of negotiating and putting [overhead] on the table,” says Peeler. “Ultimately it’s a matter of sitting down with the funder and talking about your vision for your organization, what you want to achieve, and what it will take to get there. Make that part of the case and believe that you’re worthy of investment. The worst a funder will say is no. Why say it for them?”Overhead Myth #4: Overhead takes away from impact.  Bottom line, donors want to fund impact. And if they’re honest, both nonprofits and funders know that organizations that operate on duct tape and shoestrings are generally not effective at achieving their goals.As Unmi Song points out, the Fry Foundation has found that the grantees with the best outcomes – the strongest impact – are the very ones that:Provide quality training to their staff.Actively research evidence-based practice.Have the most rigorous monitoring and assessment programs.The Fry Foundation views these activities as essential to strong and effective programming and wants to see them included in program budgets. Other funders see them as overhead. But the bottom line is that they are central to driving impact.So, why not just cover all overhead costs with general support? In fact, Grantmakers for Effective Organizations encourages foundations to give more general operating grants – and their research indicates that foundations are increasing this giving, if relatively slowly. But general support has a couple of potential problems: Many funders want more accountability around outcomes than general support grants typically offer; and Many nonprofits themselves recognize that they would have difficulty investing general support in infrastructure and capacity-building instead of expanded programming. To meet the needs of both funders and grantees, some foundations have sought out a kind of middle ground. The John R. Oishei Foundation, for example, developed a category of grantmaking that it calls Core Operations Improvement Grants. Executive vice president Paul Hogan acknowledges that donors have a “wholly understandable” desire to see a direct line between the money they give and the services delivered. But as a former nonprofit executive himself, he also acknowledges that this desire for impact often pressures nonprofits to expand their programming, whether or not they are really equipped to do so. The Oishei Foundation’s Core Operations Improvement grants are specifically aimed at “strengthening the internal operations of organizations that help to better fulfill their missions.” The goal is to build grantees’ competence as a precursor to expanding their program capacity. Importantly, these grants are explicitly “time-limited, outcome-oriented and evaluable,” giving the foundation the level of accountability it needs. The Bottom LineIt’s critical for nonprofits and foundations to find ways to speak as honestly as possible with each other about what it really costs to for the organization to do its work. Hogan says, “This is about going to a funder and saying, ‘I know you want to serve 10,000 more people. If I try to do that, the programming I do will not be nearly as good as if I professionalize my staff, bring our IT up to date, and so on -- first. Then I will be able to go and serve more people – and maybe at that point I might even be able to do it without your money.’ Most funders will hear that.”Hogan adds, “The idea of overhead is still a raging debate, but it should not be. . . Nonprofit organizations need that money to operate. That’s the end of the conversation. The better that nonprofits get at telling what they do with that money, the more philanthropy will come along.”Read more: The CFO's Overhead DilemmaOriginally published in Greater Public’s February Edge Newsletter. Reprinted with permission.
January 14, 2015

Prevent your star performers from losing passion for their work

Companies must instead provide a new kind of currency to engage their professionals – one we call "active partnering." The first step is to create a system that allows executives to talk candidly with their managers about what is most important to them professionally and personally and how their organizations might support these goals given their key work responsibilities.
January 13, 2015

How do you get millennials to care about local news? The Charlotte Observer is testing out one idea

The median age of an Observer reader (print and online combined) is 46; between 2009 and 2012, Charlotte's millennial population growth was the 10th highest in the United States, according to a 2013 Brookings Institution study. 
January 13, 2015

Nonprofits win key victory in overhead battles with government

Rather than focusing on what Congress will (or won’t) do in the new year, foundations and other nonprofits would do well to take a close look at a little-noticed overhaul of federal grant-making rules—in the works for three years and that took effect the day after Christmas—that could provide meaningful traction for ending the so-called nonprofit starvation cycle.

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