How Public Is NPR's Funding?

By Mark Browning

De-fund NPR! In the wake of the firing of Juan Williams by National Public Radio, we've once again heard conservative voices issue that call. NPR representatives respond, as they always do when their dependence on government purse strings is noted, by arguing that only two or three percent of the service's money comes from the federal government. NPR apologist Norah O'Donnell recently threw out a one- to three-percent figure on MSNBC.

We don't see these people volunteering to give up that three percent, but we have to admit that this amount of funding is not the gigantic boondoggle we might prefer to oppose. Is this three-percent number a fair claim by the NPR crowd? Apparently, in a very limited sense, it is, but in a more comprehensive analysis, it is nowhere near accurate.

To understand NPR funding, we have to recognize that public radio is a two-tier operation. There is, on the one hand, the network itself, the Washington-based producer of programs that actually terminated Juan Williams' contract. On the other hand, there is the collection of some nine hundred NPR affiliate radio stations who bring this programming to radios around the United States. We cannot hope to understand NPR's finances without understanding the stations as well, so let's begin there.

According to information available from the NPR website, local radio station money comes from the following sources:

32.1%  Individual contributions

21.1%  Business contributions

13.6%  University funds

10.1%  Corporation for Public Broadcasting funds

9.6%    Foundation money

5.6%    Federal, state, and local government funds

7.6%    Other

At first glance, this distribution of funds seems to confirm that public radio's support does not come in large amounts from the direct allocation of tax moneys. After all, 5.6% is not a gigantic portion of the budget, is it? But let's look more closely. That 10.1% that comes from the Corporation for Public Broadcasting is 99% provided by -- you guessed it -- the federal government. Those university funds, whenever they are provided by a public university, represent taxpayer-provided dollars. We can safely assert that three out of four university-supported stations are publicly funded, which means that more than 10% (three-quarters of that 13.6%) is taken from the taxpayer's pockets.

So far, we find that NPR member stations count on direct or indirect taxpayer money for some 25% of their funds -- and that's before we consider some of the largest portions of their budgets.

Obviously the support by individuals, businesses, and foundations does not constitute taxpayer funding, right? Not so fast. These donations are tax-deductible; thus, they are subsidized by the government. Granted, not every gift is actually reflected on an individual or business tax return, and not all of those that are itemized wind up offsetting  high marginal tax rates. Still, it is reasonable to believe that on average, these gifts result in deductions at the 25% tax bracket. Since these three categories add up to roughly 64% of station funds, we can reasonably argue that 16% of that money (64% x 0.25) is subsidized by the tax code.

In the end, then, local NPR affiliates derive something like 41% of their funding from taxes, either directly or indirectly.

What about the entity that generated all the buzz for firing Juan Williams? Interestingly, despite their conflicting 2% and 3% claims, the NPR website says, "We receive no direct federal funding for operations." Of course, that sort of statement leaves open the possibility of receiving direct federal funding for other purposes. What are those? They don't volunteer that information easily. What they do point out prominently is that the biggest source of money is from member stations. Local stations pay dues and fees for the programs they rebroadcast. This money, recorded as Station Programming Fees (40%), Membership Dues (1%), and Distribution Services (8%), accounts for nearly half of NPR's funds.

Why is this significant? You do recall that some 41% of local station money came from taxpayers, right? If 50% of funding comes from money that is 40% derived from taxes, then another 20% of NPR's budget comes, indirectly, from taxpayers. Twenty percent! That's a long way from the 2%-3% figures, isn't it?

The next huge chunk of NPR income comes from "Sponsorships." These are the things that, in any other media outlet, would be called advertisements. We could argue that sponsorship money is tax-deductible and therefore partly taxpayer-funded, but, lest we look like double-standard-wielding lefties, we would have to make the same argument for the ads that car companies run on ABC and CBS. Let's face it: virtually every large corporation in America enjoys some form of government largesse. That's what happens when government tentacles reach into all portions of our lives.

On the other hand, there is much more clarity when we look to the 10% "Grants and Contributions" category that represents direct taxpayer gifting (most prominently by way of the Corporation for Public Broadcasting) and indirect taxpayer support by way of tax deductions. Is it reasonable to say that half of that 10% comes in one way or another from taxes? I think so, but I'll settle for saying that this category adds just 3% to the total. This brings our total of taxpayer support for the entire NPR budget to around 23%.

Given that only 89% of the NPR income pie comes from external sources (the rest coming from investment returns), it is not unreasonable to assert that more than 25% of NPR funds from outside sources actually comes from taxpayers. That's not an overwhelming portion of the budget, but it's a long way from two to three percent.

As annoying as I find the bias at MSNBC or the New York Times, I will respect to the end their right to be as biased as they'd like. What they do with their money and whatever funds they can convince advertisers to kick in is their own business. The same does not apply to the likes of NPR. That's your money and my money going into their coffers and funding that unbalanced message. We need to demand that NPR either be pushed away from the public trough or be required to present a modicum of evenhandedness.