June 24, 2004 | Read Time: 6 minutes
A year ago, in thinking of how to improve news coverage at National Public Radio, top executives were limited in
their ambitions by concerns about money, recalls the nonprofit organization’s executive vice president, Ken Stern.
A new bureau in Africa seemed within the organization’s means, and indeed is set to open in the fall. But NPR is now contemplating a much more ambitious plan to station reporters in other regions of the world, possibly increasing the number of its overseas bureaus from 14 to as many as 25 in several years, as well as expanding domestic coverage at a time when many other news organizations are cutting back. Over all, NPR News plans to spend $15-million to upgrade its operations over the next three years, including the hiring of 45 additional reporters and editors.
The greatly expanded goal, Mr. Stern says, is directly traceable to a $225-million bequest from Joan B. Kroc to National Public Radio that was announced shortly after her death last fall. Mrs. Kroc was the widow of Ray Kroc, who established the McDonald’s restaurant chain.
“The Kroc gift has liberated us and allowed us to dream bigger,” Mr. Stern says. “More than anything else, it said to us, Think big about the future, and about where you need to be as a service organization in a changing environment.”
The donation to NPR was the second-largest bequest given by Mrs. Kroc. The largest, $1.5-billion, was given to the Salvation Army, which is just about to receive the bulk of the money.
At both organizations, questions have been raised about whether such a big donation will have the transforming effects Mrs. Kroc hoped for or will lead to changes that have the potential to cause fund-raising and other problems. Some observers worry, for example, that NPR’s quest to provide more comprehensive news coverage may crowd out some of the quirkier pieces that have long been one of its hallmarks. And some local affiliates have worried that news of the gift might cause some supporters to direct their gifts elsewhere.
Changing Relationships
At National Public Radio, officials say the money has changed the psychology among employees, donors, and supporters alike, and promises to transform the competitive tension between fund raisers for NPR and those at its 770 member stations around the country.
The public-radio network received the proceeds of two charitable-remainder trusts from Mrs. Kroc’s estate. The larger sum — $190.6-million — has been invested in the NPR Endowment Fund for Excellence. The remaining $34.3-million has gone into the organization’s operating reserve fund, which now totals $50-million. The network plans in both cases to preserve the capital and spend only the interest, which is estimated to be between $4-million and $10-million a year. Its operating budget is $106-million.
The gift has already had an invigorating effect on public radio, says NPR’s president, Kevin Klose, who notes that NPR had long retained a sense of financial struggle reminiscent of its early days. In an effort to counter that hand-to-mouth feeling, Mr. Klose focused on increasing NPR’s endowment, which has grown from about $8-million to $25-million since his arrival in 1998.
“It has given people, for the first time ever, a sense of confidence that there is a future beyond the yearly scramble” for funds, Mr. Klose says. “Not that we can stop that yearly effort. But it has given us a sense of confidence that we didn’t have before, and allowed us to think outside our present circumstances.”
Expanding Its Audience
In addition to its newsroom hires, NPR plans to improve reporting at local stations through workshops and fellowships to develop young journalistic talent. And it hopes to take other measures to continue expanding its nationwide audience, which has grown from 13 million listeners a week in 1998 to 22 million today.
NPR has also shared its good fortune with its 700 employees and with some of its member stations. Last fall, employees had received a pay increase of 1.5 percent, the lowest in years. A portion of the Kroc gift was distributed to all employees in the form of a bonus totaling 1 percent of their wages. And NPR used another portion of the gift to moderate some of the sharp increases it had required stations to pay last year to broadcast its programs.
The way the Kroc gift was cultivated has also promised to alter the fund-raising dynamics between NPR and its affiliated public-radio stations around the country. The connection between Mrs. Kroc and NPR was arranged by Stephanie Bergsma, associate general manager for development at KPBS, a public radio and television station in San Diego. Ms. Bergsma had had a long relationship with Mrs. Kroc, who previously had donated $3-million to build a production center for the public-radio station.
In 2001, Ms. Bergsma invited Mr. Klose to meet with Mrs. Kroc over lunch, and helped arrange some subsequent conversations as well during the course of the next two years. At the end of 2001, Mrs. Kroc gave $100,000 to KPBS and $500,000 to NPR.
Officials at KPBS and NPR were stunned to learn last fall of the magnitude of Mrs. Kroc’s bequests. KPBS, which has an operating budget of $18-million, received a separate $5-million bequest, some of which is being used to upgrade equipment at the station, says Ms. Bergsma, and the rest of which is going to its endowment and operating reserve.
“It had a remarkable effect on people’s attitudes toward working together and with NPR,” Ms. Bergsma says. She notes that the country’s public-radio stations, which are separate entities with their own staffs, budgets, organizational structures, and formats, often act more like a disparate collection of stations than like a single network.
“There’s always been some hesitancy about inviting NPR into our major markets to meet with donors, thinking they might steal them from us,” she says. But inviting NPR executives to meet Mrs. Kroc “seemed to be perfect sense at the time,” she adds. “You have to offer a donor the opportunity to make big gifts.”
As a result, feelings of jealousy and suspicion among local stations worried about donor poaching by NPR or fellow stations have largely dissipated.
“It’s been extraordinary, and something I never would have anticipated,” Ms. Bergsma says. “There’s a new spirit of communication.”
Working Together
Mark Handley, president of New Hampshire Public Radio, and chairman of NPR’s board of directors, is hopeful that the relationship between local stations and NPR will be permanently altered.
“There was a new realization that this partnership could be very powerful, and that we needed to explore new ways to work on it,” he says. “We had never explored ways in which we can bring the power and powerful brand of NPR and the personalities of NPR to strengthen the local case for fund raising,” Mr. Handley says.
But as a result of the experience with the Kroc gift, a committee of local-station representatives and NPR development officials has formed, he adds, for the purpose of “exploring how we can make this work to our mutual benefit, so that it is not a subtractive but an additive process, building up the local station while increasing NPR’s ability to increase its own revenue.”
