The Indicator from Planet Money - A brief history of NPR funding

Episode Date: May 13, 2025

Where does NPR get its funding? Today on the show, we open our books and share a brief history of public radio. And we learn what's at stake with President Trump's executive order to cut off federal funding to NPR. Under NPR's protocol for reporting on itself, no corporate official or news executive reviewed this story before it was posted publicly. For sponsor-free episodes of The Indicator from Planet Money, subscribe to Planet Money+ via Apple Podcasts or at plus.npr.org. Fact-checking by Sierra Juarez. Music by Drop Electric. Find us: TikTok, Instagram, Facebook, Newsletter. See pcm.adswizz.com for information about our collection and use of personal data for sponsorship and to manage your podcast sponsorship preferences.NPR Privacy Policy

NPR Adrian Ma. Darian Woods. When you tell people that you work for NPR, do you ever get this response? Have you got to meet the great ARA Glass? This is from when I was being interviewed this year by the New Zealand station, RNZ.

So Ira Glass, the founding host of this American life. To be clear, he doesn't work at NPR. Only all the time, Daryon. Right. I also get asked about whether I run into Kairisnol from Marketplace. Tiny Desk is a big one. Yes, that one is us.

Yes. Not to mention the war correspondence, national, international, and investigative journalists that we are lucky to work with. And I guess it makes sense. You know, we're all part of the same extended public radio Marvel universe. Another question we get is, how are we funded? That's coming up a lot these days. President Trump just signed an executive order to stop all federal funding to PBS and National Public Radio. This is the indicator from Planet Money.

I'm Darien Woods. And I'm Adrian Ma. Today on the show, we open up our books. Just how much does public radio rely on federal funding? And where does the other money come from? Partly from our sponsors, right now. The dawn of public radio starts at the beginning of the 20th century, with non-commercial radio stations scattered across the country.

The Wisconsin College of the Air present... These were usually tied to colleges. The oldest one that's... still running is WHA from the University of Wisconsin. This week, Mr. Bowles will describe the government's new dairy products program, designed to get you more butter. We could all do a little bit more butter, Adrian. Could we, though?

Back then, these non-commercial radio stations were mostly for education. A big turning point came in 1949 when a wealthy pacifist by the name of Lewis Hill started what's believed to be the first listener-supported radio station in the U.S. This station was KPFA in Berkeley and it had a more eclectic range of topics. This one covered marijuana advocates, LGBTQ issues, beat poets like Alan Ginsberg. I saw the best minds of my generation destroyed by madness.

So pretty eclectic, huh? Yes. So having hundreds of different non-commercial stations around the country is great for local needs. At the time, there were also loose organizations that help these stations collaborate. And that's the way it might have stayed if it weren't for some entrepreneurial radio folks

from the University of Michigan in the 1960s. So Congress was working on a big bill called the Public Television Act to fund public TV. And thanks to the University of Michigan lobbyists, they got the name changed to the Public Broadcasting Act. They tacked on the words, and radio with scotch tape,

literally scotch tape all over the business. and established the Corporation for Public Broadcasting, or the CPP. CPP then went on to create NPR. Scotch tape on the bill sounds very public radio to me for some reason. Yeah, like DIY, renegade, but all over the details of the legislation. And there at the beginning was Jack Mitchell. Well, I was the first employee of NPR, for one thing. Jack's title, Program Associate.

It meant just do whatever needed doing. From National Public Radio in Washington, I'm Robert Conley with All Things Considered. Among the tasks he would end up doing, producing All Things Considered, this 90-minute live news program that would go on to air on those hundreds of non-commercial radio stations around the country. So at this time, the funding model for NPR was fairly simple. Congress sent money to the Corporation for Public Broadcasting, or CPB, and then the CPB would pay NPR to make. radio shows. NPR expanded a loss in the 1970s. But then in the early 1980s, Ronald Reagan pushed

Congress to reduce public media funding. And it did by 20 percent. And that effectively meant a 20 percent cut to NPR. Now, NPR probably could have dealt with that, except that the president was Frank Mankowitz, who had grand visions and little sense of money. And so his solution was to expand. What we can't make up for in profit, we'll make up for in volume. Yes, right, exactly. Yeah, there was actually terrible financial management. Frank Mankowitz did help NPR diversify its funding, though,

raising money from private sources. You know, like you hear those messages, NPR receives financial support from such-and-such-and-such foundation. But this wasn't enough to offset its badly-kept books. In 1983, NPR was running a multi-million dollar deficit. It came to a crisis. I mean, we literally couldn't pay the rent. The phones were going to be cut off. They could padlock the door.

It was at the moment of we could go off the air. Jack became head of programming and had to lay off nearly a third of NPR staff. It was awful. And it was clear something had to change long term about how NPR was funded. So the CPB and NPR decided that instead of giving NPR lump sum, the CPB would send most of this funding to local stations who would then buy radio shows from NPR. Just to keep the money coming because Republicans

were all for cutting it all off, but it was less unacceptable to them if it went through the stations. And there was a philosophy that public broadcasting was to represent the entire country. And this is essentially the current system. It gave member stations around the country more sway with NPR's direction. And the benefits to NPR of spreading public radio funding across the country became clear in the 1990s. Republican House Speaker Newt Gingrich tried to eliminate public broadcasting funding. But when you had station managers talking to their congressmen, then they make the argument, this money's going to us.

But today, there's another big threat to public funding of media. Today we are looking at the more than half a billion dollars federal taxpayers spend annually to fund. Earlier this year, a Republican-led subcommittee in Congress called NPR CEO Catherine Marr to testify about alleged political bias. She strongly disputed that claim and stressed that federal funding goes to member stations across the country to serve all Americans. My belief is that the funding is essential to the public radio system. But several weeks after that testimony on May 1st, Trump signed his executive order to defund NPR and PPS. The executive order aims to do two things to NPR.

It demands a stop to federal funding directly to NPR. And secondly, it orders member stations not to use any federal money they receive to benefit NPR. Now, it's unclear whether this means member stations cannot buy any NPR shows without losing federal funding. Gabrielle Jones is interim CEO of Louisville Public Media. So you've chosen quite an interesting time to be interim CEO. It chose me, but yes, it's definitely an interesting time. We asked her whether they're going to stop playing NPR shows. We're really all just in very much a wait and see mode.

If the executive order holds up legally, then this is definitely a problem for NPR. The first part of blocking federal money going directly to NPR hurts, but is manageable. Yeah, it's often said that NPR receives only about, 1% of its funding directly from the federal government. Other revenue includes donations, returns from its endowment, and corporate sponsorship. But it's also worth considering this. NPR also receives about 30% mostly from its 246 member stations. And so if NPR's member stations were to stop buying NPR's shows, that could be a massive blow. Now, that's a big if. Federal funds typically make up a small share of local stations revenue, about 13% on

average, but this varies a lot. And so federal funding going away would be painful for member stations, even existential for some, but most would be able to weather the cuts. NPR's defenses against political attacks might come from that compromise Jack Mitchell helped facilitate in the 1980s, getting the lion's share of federal funding going through the member stations. Those member stations like Louisville Public Media are advocates at a local level. We've been focused over the last several weeks in talking to our community about ways that they can make their voices heard and reach out to lawmakers and people like that to let them know how important public media is to them, that our community here has shown that together.

This episode was produced by Julia Ritchie with engineering by Neil Rauch and Kwayze. It was fact-tracked by Sarah Quares. Kate Concanon edits the show and The Indicator is a production of NPR.