Pledges and the Sustainability of WBAI

When is the Time to Sound the Alarm?

Report to the LSB on Pledges and Sustainability of WBAI

by Mitchel Cohen
Chair, WBAI  Local Station Board
February 18, 2010

The heady optimism we all felt when management announced 3 successful fund drives in a row this past year (for the first time in years!) was based on the increased number of pledges received in each drive. This increase was accurately reported and management had no reason to doubt that the increase in pledges would translate into sustaining WBAI, implementing new initiatives, and beginning to pay some of its debt.

Unfortunately, even though WBAI did increase it’s income by $278,000 in those drives over that accrued in commensurate drives for the past few years, we did not obtain as much income as needed because fulfillment was unexpectedly low. Even should Pacifica suspend repayment of WBAI’s $1.2 million debt which had bailed out WBAI for the last 6 years (with no adequate monitoring, recovery or repayment plans), it is unlikely that WBAI will become self-sustaining at the current level of fixed costs and personnel salaries and benefits unless it registers a 15%-18% increase in fulfillment rates overall and a 30% increase in membership. As it stands, WBAI is facing an existential urgency despite running another successful fund drive and increasing its annual income since May of 2009.

In this report I summarize the problem of declining fulfillment rates and offer a variety of suggestions for dealing with it in the short term. I do not examine here the many other problems with premiums, pledges, rent or other aspects of finance, programming, governance, management or communication. I, and the other members of the LSB, have detailed elsewhere how to restructure the pledge/premiums calamity and we expect management to review and begin implementing them. Meanwhile, we are also pitching-in as volunteers to save the station, which teeters on the edge of disaster. My goal in this report is to map out the general contours of the premiums problem with an eye towards patching it immediately.


The fulfillment rates by those who ordered premiums unexpectedly plummeted in May 2009. [See Appendixes A, B] In 2007 and 2008 the rates plateaued at around 73-76 percent for fulfillment of pledges, and at least one drive exceeded that level. Since May 2009, they unexpectedly fell to an average of just under 65 percent. That 11%-14% decline in fulfillment rates translates into many hundreds of thousands of dollars that were pledged but not received — perhaps around$200,000-275,000 since May 2009 that would have been attained had we achieved even the low end of the already-diminished fulfillment rate plateau of the previous year. More than $800,000 in pledges went unfulfilled in the past 8 months. The problem was partly masked by an increase in the total number of pledges which resulted in more income than usual.

However, although WBAI’s income from each drive’s listener contributions exceeded the sum for commensurate drives of the previous four years, these were not sufficient to replace the network’s subsidies to WBAI and sustain the station. (The whole network is suffering from financial instability and without desperate emergency measures may be on the brink of collapse.)

In responding to my inquiries, the Business office at WBAI concludes that among the factors contributing to low fulfillment rates are:

● Pledges must be entered in a timely manner. [Has this been occurring?]
● Pledge reminders must be sent in a timely manner (the first goes out the next day after the pledge is made; 2nd in 25 days; 3rd in 50 days and the final in 75 days). [Were those first invoices sent out immediately upon receiving the pledge? One well-documented proposal says that initial invoices should not be mailed at all.]
● Renewal notices are a big source of income and yet none have gone out since November 2008.
● Corporate Matching Funds — another source of income — have not been pursued. [What did these amount to in the past? How is this related to fulfillment rates?]
● Premiums must be sent out in a timely manner. [There were over 5,400 premiums that had been paid for but that were not sent out in the year before the new Premiums Director took over in January 2009.]

In addition, we can add:

● Confusion in interfacing web transactions directly with the MEMSYS database, to enable immediate access to those funds and prevent cancellations and chargebacks.
● The high expense of purchasing premiums. [Has the station purchased all of the premiums promised to listeners? Has it overstocked other premiums?]

Many of these questions are not new. They have gone unanswered by WBAI for years. While these items help to explain why the fulfillment rates are so low in general; but they do not provide an explanation for why all of a sudden Credit Card fulfillment rates sharply declined beginning in May 2009 and why non-credit card fulfillments plummeted from their already low rate.

We need to understand:
a) why the fulfillment rates plummeted;
b) how to yet “capture” unfulfilled pledges from current and prior fund drives, and
c) ways to change the way the station systematizes its fund drives in the future.

SUGGESTED ACTION ITEM #1: The LSB needs regular (weekly) reports from the Business Department, Premiums, Fund Drive coordinators, Program Director and General Manager on all of the above, and also on specific problems that have contributed to the new low plateau of fulfillment rates these past 8 months, including:

● Refunds, Returns and Chargebacks. These lower the fulfillment rate. How much has it cost the station directly when people who pledged with a credit card had the card company cancel the transaction when they didn’t receive a premium?
● Premiums must be properly coded; there remain significant problems in recent drives, including the current drive, in fixing this.
● Invoices that had gone out containing an improperly coded return envelope.
● Invoices that have gone out with no return envelope (BRE) at all.
● Improving use of the airwaves to expand contributions via internet.


Management is to be praised for the recovery of $124,000 in mailed-in checks that had been sent to a Post Box that had been closed. It took quite a bit of doing to track down those missing checks. However, the printer bar-code mix-up and closed Postal box accounts for only part of the shortfall (primarily checks that are too old to deposit — we need an accounting of that, by the way). Do we know for sure that the Post Office saved all of the mail sent to our closed box, or was some of it returned? There were just under 1,000 checks there, it was reported. But pledges from 3 fund drives, even at the very low fulfillment rate, should have resulted in triple or even quadruple that number of checks.

SUGGESTED ACTION ITEM #2: Have Berthold Reimers re-contact Ms. Cherry Liu, Business Mail Entry Representative of the US Post Office, or (if necessary) her supervisor, to do a further search for additional boxes of mail for WBAI that may be hidden somewhere, and obtain a definitive answer about whether they are still holding WBAI mail, as well as how much of it was returned to sender. The LSB would appreciate an update to the CFO’s report on this matter, that incorporates all new and relevant information.

Some of the collapse of the fulfillment rate may have to do with pledgers not being sent a postage-paid return envelope with notices.

SUGGESTED ACTION ITEM #3: Compile a report for the LSB of the fulfillment by pledgers who were sent proper notices and contrast it to the response rates from those mailings that did not include a postage-paid return envelope. The 1-1/2 year-long delay in sending out the over 5,400+ premiums to people who had paid for them has driven away a large number of donors. The Premiums Department has worked against extreme difficulties in cutting into this number substantially over the last year. But the delay and prior mishandling has alienated a substantial number of donors, many of whom have still not received their premiums ordered several years ago. I’ve detailed that disaster separately in other documents. The LSB applauds the work the staff in the premiums office is doing to reduce the inherited back-log of premiums and their commitment to fulfilling delivery of every premiums ordered.

We would appreciate periodic reports on how this is coming along.


The station has contracted with an outside firm to contact all individuals listed in the database. There were significant problems with the scripts the company was using and possibly the lists the station provided. Why was the company telling people who had already paid as members that they needed to make additional payments to become a member? Was the problem with the company’s scripts or did WBAI provide the company with poorly delineated lists? Improved communication between Management and the LSB is essential to proper governance as mandated in the Bylaws.

SUGGESTED ACTION ITEM #4: Prepare a report on the outsourcing of these phone calls, problems, successes and plans for outreaching to potential donors. If the outsourcing of calls is not to continue it will be necessary to follow-up immediately in-house. Doing this correctly will require much greater reliance on email and the internet.

SUGGESTED ACTION ITEM 5: Appoint a staff member or volunteer to be in charge of contacting unfulfilled pledges. That person will need to

a) obtain a printout of all who made unfulfilled pledges from the past two fund drives;

b) draft a letter for Management to sign and email it to all unfulfilled pledges for whom we have email addresses in the database;

c) appoint 3 volunteers to follow-up on the email responses, and make phone calls to those who do not respond to the email messages and to those who have not provided email addresses;

d) ensure that accurate records are kept of these efforts, and a running tally of the success rates.
e) Perhaps producers can be recruited to make calls to people who have pledged to their show.

The best approach will be to start from the current drive, and work our way backwards. The further back we go, the lower the fulfillment rate will become until it reaches a point that makes it no longer cost effective to rely on further phone-calling. Other strategies can then be employed.

We should be able to improve fulfillment of non-Credit Card pledges in this way by 50 percent, maybe more. We should expect to recoup $75,000 to $100,000 in short order by following this procedure. A key point will be, of course, finding reliable volunteers. LSB members are ready to help in this effort.


The poor Credit Card fulfillment rate is another matter. Yes, there may have been errors in transcribing the information by those answering the phones; and there may also have been errors in inputting the information into MEMSYS; but these do not explain the significant variance in fulfillment rates between pre- and post- May drives of 2009. Nor do they explain the extremely low credit card fulfillment rate of the current drive, around 78 percent. Unless something dramatically different occurred (new and incompetent data-entry personnel or phone-answering volunteers, for example), typical transcription errors, however frequent or infrequent, would not cause fulfillment to deviate substantially from the 98 percent rate of credit card fulfillment in the past. So while all of the above might account for an overall multi-year drop in renewals and a portion of credit card declines, those would not account for the difference between the collapsed 2009-2010 fulfillment rates and those of the past.

Could the difference be due to the economic crisis? We can find this out without speculating.

SUGGESTED ACTION ITEM 6: Please contact AMEX, VISA and other credit card companies, as well as other private companies that accept credit cards, and ask them about their rate of declination (or acceptance) of credit cards (restaurants, other not-for-profits in the building, etc.) by consumers and how that differs (if at all) from the past.

In addition, it has been shown that swift action on declined cards can lead to recovering many of those pledges.

SUGGESTED ACTION ITEM 7: Have the business office print out daily reports of all credit card numbers that were declined for that day; and, give the list to a staff member in charge of contacting the owners of declined credit cards, who will organize calls to all listed, on a daily basis. (This may necessitate adding 2 additional phones and another computer to the office Berthold Reimers is currently using, in order to get this done properly, and to solicit two or three competent volunteers every day to make those calls.)


Please note that Steve Brown especially, and also Carolyn Birden, Don Eremin, Mitchel Cohen and Delphine Blue have for a number of years offered detailed proposals and comments covering most aspects of how to re-structure and professionalize pledges and premiums, which would greatly improve fulfillment rates, total income and membership. Those proposals have been for the most part ignored.

SUGGESTED ACTION ITEM 8: The WBAI LSB strongly urges management to consider and refine those proposals and act to implement them immediately, while issuing regular reports to the LSB concerning the new methods and how they are working.


The LSB needs to prioritize improving fulfillment rates immediately and to expand the membership base by at least 30 percent if we are to survive as a listener-sponsored, non-commercial radio station for the next few years. Proper fulfillment of premiums is essential to accomplishing those goals. Both LSB and Management must prioritize regular communication and Management must see the importance of transparency, providing timely information. We can and must accomplish all of this not only in the future but now, immediately, if we are to recoup unpaid pledges for the last year — it’s not too late (but it’s getting close)!

Mitchel Cohen

Chair, WBAI Local Station Board

APPENDIX A    February 10, 2010
Latest actuals compiled with locked-box money added in.

                                             Spring (May) 2009           Spring (May) 2008
Number of Days in Drive                    27                                          25
Total Pledged                                     848,520                               607,623
Total Paid                                             564,450                               503,585
Percent Pledged by Credit Card      59.8%                                   58.3%
Credit Card fulfillment                      88.3%                                  97.2%
Non-CC fulfillment                            34.1%                                    62.8%
Total Fulfillment                                66.5%                                     82.8%

                                              Summer (August) 2009       Summer 2008
Number of Days in Drive                       17                                           11
Total Pledged                                          613,599                                 255,829
Total Paid                                                391,274                                  197,767
Percent Pledged by Credit Card            55.9%                                    57.7%
Credit Card fulfillment                           89.0%                                    95.8%
Non-CC fulfillment                                  31.9%                                     52.0%
Total Fulfillment                                      63.8%                                     77.3%

                                                            September 2009
Number of Days in Drive                            2
Total Pledged                                        63,580
Total Paid                                              46,165
Percent Pledged by Credit Card           65.7%
Credit Card fulfillment                          92.7%
Non-CC fulfillment                                34.2%
Total Fulfillment                                    72.6%

                                                               Fall 2009     Fall (Sept.) 2008
Number of Days in Drive                        26                            23
Total Pledged                                        840,835                  556,204
Total Paid                                               533,958                  424,089
Percent Pledged by Credit Card              62.3%                    59.9%
Credit Card fulfillment                             87.8%                       95.4%
Non-CC fulfillment                                    23.5%                       47.5%
Total Fulfillment                                         63.5%                      76.5%

7 month totals:    April-November 7, 2009           Fall 2007-Winter 2009
TOTAL PLEDGED                                $2,458,638                             $4,147,104
TOTAL PAID                                          $1,594,045                            $3,124,913
TOTAL FULFILLMENT                           64.83%                                        75.35%
CREDIT CARDS FULF.                                88.31%                                      95%
NON-CRED CARD FULF.                            29.96%                                      48%
PLEDGED/DAY                                           $31,553                                  $25,134
FULFILLED/DAY                                     $20,478                                   $18,939



FALL 2007                75.5%  (27 days)
MLK 2008                  77.4%  (2 days)
WINTER 2008           72.3%  (27 days)
APRIL 2008               68.8%  (2 days)
SPRING 2008             82.8%  (25 days)
SUMMER 2008         77.3%  (11 days)
SEPT 2008                   76.2%  (23 days)
OCTOBER 2008          70.5%  (7 days)
DECEMBER 2008      75.6%  (13 days)
MLK 2009                    72.3%  (1 day)
WINTER 2009            71.5%  (27 days)
APRIL 2009                63.2%  (3 days)
SPRING (MAY) 09     66.5%  (27 days)
SUMMER 2009           63.8%  (17 days)
SEPTEMBER 09          72.6%  (2 days)
FALL 2009                  63.5%  (26 days)


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