Minnesota Radio Stories Were a Disservice

To the Editor:

Why did The Chronicle (“Sale of Catalogue Business Nets Profits for Minn. Public Radio — and Top Officials,” April 9) print the defamatory opinion of Matthew Landy, an official at the National Charities Information Bureau, that there may have been an inappropriate transfer of the charity’s assets to top officials when the facts — the Minnesota Attorney General’s opinion on the matter — found no such impropriety?

Why, too, did The Chronicle print Henry Goldstein’s equally defamatory and uninformed opinion in the same issue (“Making Charities’ For-Profit Arms More Accountable,” Opinion)?

We can only imagine that stimulating controversy was the intent in printing such disparagement. This is a disservice to Minnesota Public Radio, its associated group of companies, their boards, staffs, and legions of supporters. More than that, readers — many of whom are individuals who care deeply about the challenges to non-profits and are interested in success stories and innovation in meeting those challenges — may have been misled.

Mr. Landy is not familiar with Minnesota Public Radio, its group of companies, their governance policies, or missions. Mr. Landy’s organization has no “watchdog” relationship with Minnesota Public Radio, nor had he read the Minnesota Attorney General’s opinion. The Minnesota Charities Review Council, which does serve as a charities watchdog for Minnesota and which has recently completed a review, found that Minnesota Public Radio meets all its standards.

Mr. Goldstein is also clearly unfamiliar with the facts about MPR. His supposition that “the organization built up the for-profit side of its operation through the subsidy provided by tax exemption and tax deductibility” is just plain wrong.

Since its inception, the for-profit business has been a tax-paying corporation operating like any other commercial business.

Mr. Goldstein also errs in assuming that somehow the risk associated with the for-profit businesses was “left to taxpayers in general, and Minnesota Public Radio’s donors, in particular.” Again, had he known the facts, he would have known that the structure of

the companies appropriately insulated the non-profit. No non-profit assets were ever put at risk in the for-profit business.

However, the non-profit, as the sole shareholder, experienced fluctuations in income as a result of business conditions that affected [the catalogue company] Rivertown’s performance. That is precisely why selling Rivertown and converting the operating asset to a diversified endowment asset makes so much sense for MPR.

Minnesota Public Radio and its group of companies are governed by highly respected boards of experienced executives whose thorough review and involvement guaranteed that the non-profit and the for-profit companies remained separate and free from any conflicts of interest. Throughout the entire history of these companies we have used nationally recognized outside compensation experts and first-class independent legal counsel. The boards’ decisions passed every test of ethics and legality and were guided by our desire to serve Minnesota Public Radio.

Was the compensation appropriate? Yes. Was there adequate oversight? Yes. All decisions always favored the non-profit mission, first and foremost.

Minnesota Public Radio has been extraordinarily successful in meeting both the challenge to deliver on its mission and to provide the money to make it possible. In 1981, Congress explicitly challenged public broadcasters to find ways to generate new sources of revenue. That year, a Congressional report linked revenue and quality explicitly: “public-broadcast stations must be free to generate substantial sums of additional revenue if the nation’s public-broadcasting system is to survive and still provide high-quality programming.”

Every public-broadcasting organization in the country received the same challenge from Congress, and virtually every non-profit has felt pressure since then to create new revenue that will help meet its mission. Minnesota Public Radio took up that challenge and has had the vision, the leadership, the courage, and the talent to build what is widely recognized as the best public-radio service in the nation, to create a highly successful for-profit business, and to sell that business to insure the non-profit’s future stability and growth through endowment.

Steven M. Rothschild
Chairman, Board of Trustees
Minnesota Public Radio
St. Paul