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Alternative WBAI FY05 Budget Suggestions 9-13-03 |
[ A post from PNB Finance Committee chair Mark Roberts and
response from WBAI treasurer Paul Surovell added below Spooner chart ]
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From: Carol Spooner [Pacifica National Board] [Budget grid chart below] I hope we can solve this painful problem without any more grandstanding or shooting the messenger. I don't think it is debatable that WBAI's on-air fundraising is in a tailspin & has been for a year. I also don't think it is debatable that the station cannot continue doing on-air drives for 92 days per year without continuing to see its $$ raised per day decrease to the vanishing point. Whether or not Steve Brown's estimates of on-air funds raised per day are precisely accurate (and we need accurate figures from the station management for the last 5 fund drives ASAP) it is true that the average raised/day dropped this year like a stone from last year and previous years. We really need accurate numbers for each fund drive -- right away -- both for amounts pledged per day, and the actual fulfillment rate for each drive this past year. The solution to this problem has serious repercussions, not just for WBAI, but also for all the national divisions -- which depend on Central Services at 20% of listener support from each station for their budgets. If WBAI projects listener support that it can't raise, then the national office/programming/archives will also have serious problems meeting payrolls and other obligations. Whether or not the other stations will have the ability to make up the difference is very questionable, since everyone is operating on tight budgets & having trouble coming up with their 1-month operating reserves this year. We tried to face this problem last fall when the WBAI October '03 fund drive fell seriously short. Unfortunately the main "solution" to the problem -- more days of on-air fund drives -- masked the problem and actually made it worse over the course of the year. We could see that WBAI was meeting its budgeted fundraising goals, but could not easily see the downward spiral in $$s raised per day, because those figures aren't part of our current regular financial reporting system. This information should be reported regularly for all stations to the finance committee from now on, including the pledged amount & fulfillment rate for each fund drive. Before wading into this with my suggestions, I took a hard look at the historical facts & trends. I've attached a spreadsheet showing the actual audited figures from 2000 through 2003, the '04 budgeted figures, the '04 actual figures (as projected in the 7/31/04 income statement), the '05 proposed budget (9/9/04 version) -- and a revised proposal budget, based on the following: limiting on-air fundraising to a maximum 50 days
The primary goal for the '05 fiscal year would be to raise that back up to $45,000/day in 50 days of on-air fundraising. (And to raise it back up to $60k over the following two years.) Here are some suggestions on how to do that:
Other suggestions:
I've gone through the budget line-by-line looking at this year's projected actual expenses vs next year's budget and suggested cuts wherever it looked possible to me (though probably painful). Those on the ground at WBAI may find other places to make cuts, or places where I've suggested cuts that just can't be made. This will require a lot of discipline, and the finance committee should monitor it like a hawk this coming year and not let anything slide. Some final thoughts about salary cuts. Salaries and related expenses at WBAI have increased by 35% -- almost $400k -- since FYE 9/30/01 (since the settlement with the old board) -- from $1,138,038 in FYE '01 to $1,536,041 projected for FYE '04. This 35% increase took place without solidifying sustainable income growth to support it. I think there were many reasons for this -- not the least of which was some euphoria at ridding the network of the old repressive regime, and a feeling of entitlement to "splurge" and reward our friends, as well as fill some vacancies that may have really been needed. Big increases in salaries & benes also occurred at KPFA & KPFK -- but both of those stations have more "wiggle room" because they own their buildings and don't pay the exorbitant rent that WBAI pays (both for its Wall Street offices and for its tower at the Empire State Building) -- and both of those stations have so far been able to sustain the income growth to support it, though I really do worry about KPFA. Another reason is probably the loss of institutional memory in the person of Pacifica's long-time controller for 18 years -- Sandra Rosas -- who was fired by Bessie Wash in early 2001. Sandra was a fiscal conservative, and she enforced prudent spending policies based on "proven income." Needless to say, she was controversial. Nobody likes a "bean counter." But we need to learn from this experience at WBAI and institute better controls on expense over-runs. It is counter-productive and unfair to charge anyone with being "anti-worker" because WBAI's income shortage requires staff cuts. I hope that everyone -- particularly the station and national management -- will be sensitive & not use this situation to further inflame partisan passions. --Carol |
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WBAI FINANCIAL RECOVERY AND RESPONSIBILITY PLAN FOR FYE 9/30/06
[ Proposed WBAI FYO5 budget present to the LSB 9-9-04:
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From: Mark Roberts Greetings to all, I have read many emails regarding WBAI over the last few months with great interest, concern, and hope. To be honest, with respect to the proposed FY '05 budget, I think both primary sides make valid points, but also err. Those arguing for budgetary restraints are correct in highlighting past fundraising difficulties, donor fatigue, and associated expenses, but need to also consider the affect of severe reductions on the station and its considerable supporters, legacy, and promise. Those seeking to rely on new and proposed revenue enhancements and cost efficiencies are right to remain optimistic, but must also recognize the legitimacy of present concerns. So, how to proceed? Excessive on-air fundraising days and reduced fulfillment rates are issues that will not go away, nor should they. However, the underlying presumption that WBAI is bleeding more affluent, white listeners in favor of less engaged "community folk" is also problematic and troubling. The interjection of race and class always muddies the waters. At times, it almost seems as though bad news becomes good news to those seeking a different direction in BAI programming and perceived identity. Those who base their fiscal arguments solely on a Pacifica mission statement rooted in amplifying the "voiceless" seem to ignore the financial risks of a budget fueled solely by parochial intent. The left, almost by definition, is a loose collaboration of interests not always aligned. Intellectual monogamy is the hallmark of the right. On "our" side, we must work hard to tolerate our differences in the interest of our commonalties. Unfortunately, the question of whether BAI is "too black" or should be "more white" ignores the deeper issues of how to remain vibrant, solvent, and relevant in one of the world's largest and most diverse markets. I am not a deep believer in the relevance of Arbitron data to community radio--especially one as historic and influential as ours--and I find comparisons to NPR harmful. This is Pacifica. "Bling" and star power are not our aim. Peace, Justice, Access, and Understanding are more on the mark. How to reconcile both? To me, that is a more relevant question than what Gary Null does, or Bernard White doesn't. And I must reveal that my underlying assumption is that all parties want BAI to live and breath and thrive. But how? Forgive my arrogance, but I suggest six things from my engaged, albeit remote, office here in DC, as follows: 1) I would acknowledge that the budget, crafted by competent professionals and volunteers at BAI, is a collaborative blue print--a PLAN of attack. We need to move away from calling out names, assigning blame, or attacking personal investments. The GM, the BM, the Treasurer, the LSB--ALL want what they perceive is best for the station they love. Let's move away from character assassination and towards character development--on all sides; 2) I would consider a contingency plan for now. Pass the annual budget on a three month basis with a motion to revisit in time to revise by January if any underlying assumptions prove significantly false in either direction--yielding more or less than anticipated; 3) Place a six-month moratorium of any and all consultant hirings. Rely on the current paid staff and more volunteers to work the vision through. This ban would help alleviate the concern that WBAI has become a revenue source for individuals rather than the common good; 4) Reduce projected revenue for FY '05 by 12%. While the number appears arbitrary, it is not and seeks to acknowledge the current fundraising difficulties, while also managing a reasonable downsizing that incorporates both reinvigorating funding and development goals and recognizing staffing implications. WBAI would also need to reduce expenses in the proposed budget by 12% in order to maintain mandated, national working capital requirements. I am not as familiar with the budget as those at WBAI are, but I have reviewed it, and I would look at administrative, premium, and mailing costs. Those, together with the reductions in consultant expenses, should accomplish the goal; 5) Stop turning every mole hill into a mountain. It distorts the terrain; and 6) However you wish to proceed, remember how powerful WBAI remains. Too often, when in battle, we all harp continuously about what "us or them" are NOT and fail to celebrate what WE have become. I respect the passion at WBAI. Passion is a great thing, but, at times, needs to be harnessed. Yes, let the vision and the numbers guide you. But lingering negativity and simmering distrust will not breed the optimism, communion, excitement, and creativity needed to overtake this impasse. A little more sunshine could work wonders. Please remember how much all of us are counting on you, your goodness, and your ideas to make a way.
Mark Roberts, Chair
From: Paul Surovell [WBAI LSB Treasurer]
WILL THE BUDGET AX INCREASE CONTEXT On September 30, 2004, the end of Fiscal Year 2004, WBAI have at least $150,000 in the bank, more than enough take us into the October Fund-Drive, according to Business Manager Indra Hart's most recent cashflow analysis. PROPOSALS FOR BUDGET CUTS AT WBAI The issue of the daily rate of WBAI's fund-raising -- as opposed to how much WBAI is raising -- was presented as the primary reason why 7 LSB members voted to reject the WBAI budget presented by Business Manager Indra Hardat, GM Don Rojas and LSB Treasurer Paul Surovell. In the same vote 6 members voted to approve and 3 members abstained. In response to this concern about the daily rate of fund-raising at WBAI, two members of the National Finance Committee, Mark Roberts and Carol Spooner, have called for cuts in WBAI's budget as part of their recommendations to improve WBAI's daily rate of on-air fund-raising. Mark recommends a 12% overall cut in the budget. Carol recommends a 24.5% overall cut, including a 28.1% cut in the paid staff, part-time and temporary employees. [This is on top of a $65,000 cut (37%) in nonstaff part-time and temporary employees included in the budget proposed by the WBAI Business Manager, GM and LSB Treasurer.] Mark's proposal would cut spending and income by $483,460 at WBAI. Carol's would cut spending and income by $966,000. In my opinion, neither Mark nor Carol have provided a single reason or rationale, as to why and how budget cuts would help WBAI increase its daily rate of on-air fund-raising. With all due respect, I regard their proposals as gratuitous and irrelevant to the issue on hand. BUDGET CUTS AT THIS TIME WOULD WORSEN DAILY FUND-RAISING In fact, I think there is good reason to believe that sharp cuts among the staff -- which has worked so incredibly hard to meet WBAI's fund-raising needs this year -- would cause morale to plummet to such a degree that daily fund-raising rates would actually WORSEN, as would the necessary administrative follow-ups in data-entry, invoicing and premiums. I asked one of AFTRA's stewards last night how he thought the staff would react to staff cuts at this time of between 12% and 28.1%. He said he didn't understand the logic of such a proposal that would effectively punish the staff that has been working under duress and far beyond the call of duty, to keep WBAI afloat and up and running, for the past 12 months. He said the idea of budget cuts at this time sounded like a "nightmare" that would probably cause the best people at WBAI to leave. Unless and until those advocating budget cuts can provide reasons and rationales as to how such cuts will help WBAI increase its daily rate of on-air fund-raising, I think all such proposals should be withdrawn. THE WBAI BUDGET INCOME LINES The WBAI budget proposal includes a Listener Support line that is lower by about $154,000 than what is expected to be realized in FYR04, according the the latest projections (July 31, 2004) cited by Carol Spooner. The WBAI budget grid which I prepared that shows a slight increase in Listener Support ($18,435) was based on the May 31, 2004 projection. The major income increases that are included in the budget are the $98,000 increase in CPB funds, and increases of about $122,000 (donations, community events and grants) that are expected to result from the hiring/contracting of a development director/consultant. There is also LSB fund-raising of $50,000. The LSB has already raised this year about $40,000 through two projects by LSB member Steve Brown, and there are a number of fund-raising opportunities available right away for the LSB. What appears as a $100,000 increase for Website Income is not the case, because close to $100,000 will actually be raised by the Website in FYR04, according to station records. I concede that the budgeted income of $25,000 for the Web Radio project is not based on experience or a specific plan, and perhaps it should be reconsidered. However, I believe all other income categories are based on experience and/or specific plans. If they are not realized, obviously adjustments and cuts in spending will have to be made, as is always the case. CONTINGENCY PLANS IF INCOME TARGETS FALL SHORT WBAI and Pacifica management has on at least 2 occasions in FYR04, indicated in discussions with AFTRA, how management will respond to income shortfalls. In the first instance there were contingencies for layoffs. In the second instance, there was a contingency plan to cut salaries across the board by the amount needed to address the shortfall. There is a world of difference between a contingency plan for an income shortfall and a proposal for layoffs or salary cuts when income covers expenses. WHAT SHOULD THE WBAI LSB AND THE PNB DO? I recommend that the WBAI LSB approve both the proposed budget as well as the accompanying Budget Motion and that the LSB and the PNB Finance Committee keep a close eye on WBAI's financial performance, so that if an income shortfall appears, adjustments, and cuts, if necessary, can be instituted. Cuts under these circumstances will be justified and understood. The importance of the Budget Motion is that it will: (1) Establish clear limits on spending on part-time and temporary employees and on consultants. (2) Require LSB approval of the contract for a development position or consultant (3) Require LSB approval (under PNB guidelines) for any spending not covered by the budget. (4) Commit the LSB to work with management to improve on-air fundraising, including the daily rate of on-air fundraising. (5) Commit the LSB to work with management to improve off-air fundraising. HOW DO WE RAISE THE DAILY RATE OF FUND-RAISING? I think the highest priority should be to establish a process between management and the LSB to examine the fund-raising process as a whole. Such a process, in my view should focus on the following: a) Establish the facts about fund-raising performance at WBAI. b) Compare WBAI's experience with that of other stations. Bring in fund-raising managers from other stations to consult with us. c) Determine how can we improve the management of the fund-raising process. d) Develop a concrete plan to overcome the huge Premiums backlog. e) Establish an ongoing outreach / membership campaign headed by the WBAI Outreach Coordinator, involving ongoing leafleting, tabling, speaking and other forms of outreach to encourage the public to listen and join WBAI. Not just at special events, but several times a week, every week. f) Recognize the imperative to re-broadcast Democracy Now! in the evening, when working people and students can listen, and to consider rescheduling the morning broadcast from 9 am to 8 am. Making Democracy Now! available to progressive New Yorkers is the single most important step that WBAI can take to improve its audience, its membership and its fund-raising performance. And this can be accomplished without removing a single program from the program schedule. APPENDIX REPLIES TO PROPOSALS BY CAROL SPOONER ON FUND-RAISNG (1) Return Gary Null to fund-raising. REPLY: This has already happened. Gary Null was included in the August fund-drive, and hopefully will be included in all future drives. (2) Hire a Development Director, perhaps Phil Osequeda. REPLY. This is included in the budget and in the budget motion. Phil was closely involved in the work of our interim Development Director, whose plan for FYR05 will be a key consideration in the hiring process. I agree that Phil should remain closely involved with WBAI as much as possible. (3) Analyze each program's role in fund-raising. REPLY. Agreed. (4) Emphasize volunteers in tally. REPLY. This is already the case. The only paid employees are those who supervise the tally volunteers and the transfer of data to the membership department. (5) Fund-raising by the LSB. REPLY. Agreed (6) Station manager going on-air to emphasize the need to raise money faster. REPLY. Agreed. |
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