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Should WBEZ donors be told their money might be spent on Vocalo?

By Michael Miner

August 14, 2008

“Full disclosure!” snorted my daughter Laura when I told her what I was working on. “Nobody discloses everything. Nobody told me when I gave money to John Edwards that some of it would be used as hush money.”

You gave him money? I said. She’d answered phones for Edwards in Iowa, but I didn’t think she had any money to give.

She admitted she hadn’t. But saying it was money made it a better story.

Big difference, I lectured. Money is fungible. Labor isn’t.

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Which is something to keep in mind as this column shifts from the latest Washington sex scandal to its actual subject—full disclosure as Chicago Public Radio didn’t practice it during its June pledge drive.

On July 24, Torey Malatia, the general manager of WBEZ and CEO of its parent, Chicago Public Radio, received an e-mail that began, “After 15 years of supporting WBEZ, I called earlier today and cancelled my monthly pledge.”

Jeanne Marie Olson had pledged a dollar a day to WBEZ, or so she thought, on June 23. On July 7 she got a note from Malatia thanking her for her “donation to Chicago Public Radio.” CPR, WBEZ—to Olson that was a distinction without a difference. The note was on CPR stationery that listed two FM stations—WBEZ in Chicago and WBEQ in Morris, Illinois—at the bottom. A third CPR station, WBEW FM in Chesterton, Indiana, wasn’t acknowledged.

A few days later Olson read my July 17 Hot Type and discovered the existence of Vocalo.org, the bleeding edge Web site/radio station CPR launched on WBEW last May to try to reach a vast young audience that wouldn’t tune in WBEZ on a bet. At the moment it’s primarily an online audio stream, but a tower going up in Porter, Indiana, will soon extend the WBEW signal at 89.5 FM to millions. Vocalo is raw, it’s wild, and one day it may transform public radio. From listening to WBEZ you’d never know it exists.

Introduce WBEZ to Vocalo at a party and they’d shake hands like sullen strangers. They share space on Navy Pier and the same senior management, but neither acknowledges the other, not even during pledge drives on WBEZ, when CPR boasts of its triumphs and ambitions. Total separation is the marketing strategy.

Malatia originally assured WBEZ staffers that their station and Vocalo would be funded by entirely different sources. But in late June he told them some Vocalo grants hadn’t come through on schedule and WBEZ would make up the shortfall. Vocalo finished the year about $600,000 in the red, double expectations. WBEZ was short $887,000. “The good news is that we have net assets that take care of this,” Malatia told me. “But this year we’ll have to be very careful.”

To the distress of WBEZ staffers I spoke with, Malatia was trimming their station’s sails. And they were suddenly sharing their rainy-day fund with Vocalo, which in their view was unlistenable.

“I don’t care much about Vocalo one way or the other,” Olson’s e-mail continued. “I think experimentation is cool, as long as the donors to Vocalo know what they are supporting. If Vocalo can make it on their own through their own donors, kudos. But not with my money unless I choose to give it to them. . . . I pledged to support the programming on 91.5 FM. Only.”

Olson engaged Malatia in an extended e-mail conversation that she decided to share with me. Malatia doesn’t want me to quote his part, but I will say he gave as good as he got, and his defense was rooted in the fungibility of money. That is, dollars are interchangeable—every dollar that’s forbidden to pass to Vocalo and is spent on something else frees up a dollar that can go to Vocalo instead.

Olson wasn’t persuaded. “Since you are relying on voluntary donations from listeners,” she wrote him on July 28, “the station has more responsibility to its donors than, say, a lemonade stand would have to its patrons. At a lemonade stand, I put down 50 cents. I receive my cup. I drink it and leave. If the lemonade stand owner decides to invest his profit into selling clown hats on the side, it doesn’t matter to me. I paid for my lemonade, received it, and that is that.

“Public radio is not a lemonade stand.

“When you go on the air at a pledge drive and ask for listener support, you cite the many expenses that go into making a public radio station work. As a benefit, you mention—specifically by name—the programs that we receive as listeners of the station. When we voluntarily give to the station, especially if our donation is pledged to continue over a period of time, we are entering into a donor agreement with you. We give money and you spend that money on what you have represented as the not-for-profit that is worthy of funding. In this case, that is WBEZ.”

Malatia wears different hats, and if Olson trusts the decisions he makes for WBEZ why shouldn’t she trust the ones he makes for CPR? Malatia’s a gambler, and he’s gambling that in the long run Vocalo will make Chicago Public Radio stronger. If he’s right WBEZ will benefit too, even if today WBEZ pretends Vocalo doesn’t exist.

But if Malatia is gambling with her money, Olson would at least like to know about it. “To tell me, after you have secured my pledge, that you will be diverting money to a completely different station, a station that I would not have known about had I not read the Chicago Reader, that makes me believe that I cannot trust you to be a responsible steward of my donation,” Olson told him. “It isn’t the FACT that you are doing it, Torey. It is HOW you have gone about it. It is how this whole thing is playing out. If there are any reserves from past years and WBEZ is coming up short in 2008, that is where the reserves should go.”

If every last penny of Olson’s contributions went to WBEZ—if she scrawled “Not for use by Vocalo” on a check in red ink and CPR obeyed—her money would simply replenish cash reserves that Vocalo is tapping. And of course a lot of those reserves also came in as donations from the public.

So if I were Malatia I’d explain that the totally separate marketing of WBEZ and Vocalo is a business decision intended to benefit both brands—not a stratagem for deceiving donors. And I’d concede that Olson had a point and promise to review the pledge pitch.

I e-mailed Malatia asking for an interview on Olson’s critique. He wrote back that he’d be out of town for several days. “But this is pretty standard stuff,” he added, “so anyone at our place can answer these questions.”

Yet no one quite did. I wound up speaking with Daniel Ash, CPR’s vice president of strategic communications. “There’s no story here,” he said. “We don’t think we’ve done anything improper at all in terms of our investment in Vocalo.org.”

But no one’s saying the investment in Vocalo is improper. The question is whether the investment should have been acknowledged during the last pledge drive.

“We receive income and we use that income to support our mission,” said Ash. “We go out of our way to make sure every single dollar we receive in revenues goes to support the public service mission of Chicago Public Radio.”

Which is fine. But Vocalo is an audacious new response to that mission, and the WBEZ audience has been told nothing about it.

“Before we pitched This American Life we didn’t pitch it on the air,” said Ash. “During a membership drive you can’t pitch something people don’t know. We’re always testing new ideas, but you can’t expect people to respond to an idea or a program they haven’t experienced.”

Actually, it is very possible to respond to an idea—once you know someone has it. Still, as an occasional CPR donor myself, I’d cut Malatia more slack than Olson did. I’d tell myself he’s done well enough with WBEZ to have earned the right to be wrong.

For more on the media, see Michael Miner’s blog, News Bites.