Dishing out the hamburger money

The money’s in the bank, all $235 million of it.

Dick Starmann, advisor to the late Joan B. Kroc, widow of McDonald’s founder Ray Kroc and giver of this staggering gift, describes how he just finished sending it to National Public Radio about three weeks ago. Laughing, cheerful as any provider of someone else’s fortune could be, this retired head of worldwide communications for McDonald’s portrays his contribution to philanthropy: “I asked Kevin [Klose, NPR president and CEO]: ‘Do you want it in big bills or small?’ ”

The largest gift ever made to a journalistic or cultural institution in America -- NPR is public radio’s foremost source of programming -- has arrived (by wire transfer, as it turns out). But life, a wise man once said, is lived in the chasm between what one is given and what one makes of it. NPR has started its adventure across that terrain and is already confronting tests and opportunities that will dramatically expand and transform the organization.

The careful way NPR seems to be addressing its future -- heavy on meetings, conducted in a quasi-academic way -- reflects the unusual dynamics that Kroc saw in NPR, Starmann says. She gave her bequest with no restrictions or stipulations.

“She wanted them to be a better organization, to be bigger and more relevant. She believed in public radio.”

NPR’s leaders see the gift as the affirmation of an approach to broadcasting that has delivered the network an audience of more than 22 million listeners, one that has doubled in the last five years. Its “Morning Edition” attracts an average daily audience of 13 million listeners, and the early-evening “All Things Considered” draws 12 million, numbers on par with network TV newscasts.

That audience was gained, NPR Foreign Editor Loren Jenkins says, in part “by default,” as listeners increasingly dial across a radio spectrum that mostly bristles with the raw partisan voices of talk radio or flattens to an icy commercial slickness of endless ads interrupted by sound bites of news. Television, Jenkins points out, is doing less of the foreign reporting on which NPR prides itself.

But prominence brings visibility. The more than 35,000 e-mails responding to NPR’s ouster of longtime “Morning Edition” anchor Bob Edwards last month shows the size and activist engagement of NPR’s audience.

NPR executives say they’ve moved past what they call a justified but insensitively managed decision. They have turned to a range of new possibilities and risks for NPR that can be categorized under the three words of its name.

For an organization anchored in Washington, D.C., but rooted to a system of local stations, what will be the balance of its national and local priorities? Will NPR’s ambitious effort, through its new broadcasting facility in Los Angeles, NPR West, effectively position it as a national force for gathering and delivering news?

How diverse a public can it serve? Weighing heavily on a network that espouses diversity is that its audience remains largely affluent, college-educated and, too often, white. How NPR will build a larger, more diverse audience is a key question about the financially enhanced future.

What does radio mean at a time when its programming will flow across a whole new array of digital, satellite and online technologies that will change listeners’ relationships to the medium?

When Klose speaks of the Kroc gift, he describes it as the keel of a ship, an addition to the organization’s resources that will keep it steady over the long haul. Last week, the benefit was more immediate: Unusual companywide bonuses to the NPR workforce, drawn from the Kroc gift, of roughly 1% of an employee’s annual salary -- a minimum of $500 per person and a maximum bonus of $1,200 -- totaling $700,000.

On Tuesday, the network announced the Kroc gift would also permit it to give about $2.4 million worth of savings to stations, offsetting increases that, according to a complex formula, stations pay for programming. “We’re trying to put stations in a position to improve their local services,” said Ken Stern, NPR’s executive vice president.

But NPR’s leaders have begun exploring more far-reaching ideas for how to invest and spend the Kroc money ($35 million to cover immediate operating expenses and an additional $200 million for long-term growth). Most tangible is a plan to expand the news staff by about 45 reporters and other staffers over the next three years, with about $10 million NPR hopes to gain, after inflation, from three years’ interest on the gift.

Specific additions being considered include a second correspondent in Africa and a new staffer in Baghdad. Top editors want to double up on reporters covering specific beats so that staffers will be able to trade off daily coverage and investigative reporting.

NPR recently hired William Marimow, a two-time Pulitzer Prize-winning reporter at the Philadelphia Inquirer and former editor of the Baltimore Sun. He’ll join two top editors in running news operations, with that new emphasis on investigative work.

News is expensive, and NPR busted budgets in the wake of covering the 9/11 attacks and the invasion of Iraq. One great advantage the Kroc gift offers, Stern says, will be a cushion to cope with increased coverage without draining long-term reserves.

Those moves form the gift’s public face. There’s also the essential effort to manage the money well.

It is typical of the network’s ethos that Cephas Bowles, the general manager of a jazz-oriented station in Newark, N.J., is also in charge of NPR’s investment committee. Music may be his favorite subject, but he also seems to get a knowledgeable buzz from talking about gaining access to certain kinds of investment funds from which the broadcaster had been barred in the past.

He and others hope the endowment will earn 5% to 7% interest. They also stress that a company with annual operating costs totaling about $110 million can hardly rely on that amount to keep itself going. NPR officials worry that potential donors will conclude Joan Kroc made NPR so rich it doesn’t need them.

Feeding morale and a mission

NPR is housed in a wedge-shaped, seven-story steel and glass building here in the nation’s capital that could belong to a small government agency or a large think tank. Production facilities for the major news magazines, “Morning Edition” and “All Things Considered,” “Weekend Edition Saturday” and “Weekend Edition Sunday,” are on the second floor. The shows are broadcast from one studio, 2A.

Various news desks, and the offices of some senior editors and producers occupy the third floor.

On the top floor is the master control room, a nerve center whose softly glowing, computerized equipment that gathers masses of information and distributes programs over satellites to 778 public radio stations across the country -- a public radio empire that embraces one station in the U.S. Virgin Islands and 40 in California.

The voices that the signals carry include the knowing tones of Edwards’ interim replacements, Steve Inskeep and Rene Montagne, the detachment and engagement of Robert Siegal, the matronly calm of Cokie Roberts and the manic practicality of Tom and Ray Magliozzi on “Car Talk.”

Among those who work in the building, the Kroc money has stirred a general sense of gratitude and optimism. Standing in her smallish office on the second floor, Michele Norris, co-host of the flagship evening program “All Things Considered,” noted: “We’re curious to see what they’ll do with the hamburger money. People here work long, hard hours. They see it as validating what they do.”

Among the people who run the place, her accessible humor gives way to the aluminum-like phrases of business planning. Yet the bohemian and the businesslike merge in executive offices and NPR’s boardroom, as when the words “strategic planning” crisply unfurl from the lips of Mark Handley, the chairman of NPR’s board of directors and general manager of New Hampshire Public Radio, a neatly bearded former farmer who commutes from a sailboat in Boston Harbor.

This spring, starting before the Edwards episode and continuing during and after it, the NPR staff, upper management, its board of directors and members of its fundraising body, the NPR Foundation, engaged in a series of meetings to develop NPR’s strategic goals for the next few years. They were presented to more than 100 local station executives who met for their annual meeting last week in Arlington, Va.

While such meetings have been held in the past, this was the first one at which upper management discussed how it was dealing with the Kroc gift and priorities for the future that the gift made possible. The Times was permitted to sit in on several of these meetings, including two key sessions held by the NPR board of directors in mid-April.

Addressing one of the board of directors meetings, Klose asked, “Will we continue ... to serve the increasingly segmented, diverse, struggling citizenry of this democracy?” Or, he wondered, would NPR “watch as the world of values-destroying medias speed past us, multiplying their strengths, shouldering aside the good with an endless sequence of sensation after sensation as the core of what they present to the American people?”

Last week, station officials mingled with people like Dana Rehm, who organized the meeting and is vice president for member and program services. They spoke with Jackie Nixon, director of audience and corporate research. They heard from Mike Starling, vice president in charge of engineering, who leads NPR’s efforts as an innovative developer of the technology that may shape NPR’s future more than any other element.

Talking to them, it becomes clear how squarely NPR stands at the edge of unexplored ground. The local-national collaboration at NPR is having some success, particularly two shows that originate from the new NPR West studios in Culver City. “The Tavis Smiley Show,” a new talk show hosted by a rising African American radio (and, on PBS, TV) personality, grew from a dialogue between NPR and 34 NPR stations with a strong African American listenership. It has taken quick hold in major markets. “Day to Day,” the midday news magazine hosted by Alex Chadwick, also caught on rapidly, airing on more than 100 stations. It too was developed with input from local stations.

Yet at least one difficult issue looms in local-national cooperation: satellite radio. NPR already uplinks shows to Sirius Satellite Radio, one of two providers of a fee-driven subscription radio service analogous to satellite TV, but it has withheld “Morning Edition” and “All Things Considered” -- news magazines that many of its local members rely on as the core of their programming.

It has been a subject of intensifying conversation on all levels at NPR. Member stations might be surprised to hear the increasing, sometimes nervous focus among the 16 members of NPR’s board of directors on the possibility of sending more NPR programs over satellite to keep up with the competition and not get left behind.

The possibility that Nixon sees for NPR is for a growth in audience that she believes, within the next five years, could reach between 30 million and 50 million listeners. “I mean to go more into depth about how to have programming that resonates even more strongly with different groups,” she says. A coming series of focus groups will look at listening among African Americans, in part to gauge response to “The Tavis Smiley Show.”

Starling’s view of the next few years is more developed and encompasses what NPR calls “Tomorrow Radio”: digital radio technology that will enable single stations to multiply themselves into two or more simultaneous broadcast entities. KCRW-FM (89.9) and KPCC-FM (89.3) in Los Angeles could offer listeners an all-Spanish version of certain programs on a parallel channel or separate streams of music or literary programming.

When the NPR board of directors met in mid-April, an awareness of Tomorrow Radio technology lay behind a series of long, searching exchanges about its implications for programming.

Though some members of the board emphasized NPR’s role as a source of news, there seemed to be considerable support for an enlarged role for various kinds of programming about the arts, as Tomorrow Radio increases what stations can deliver.

Bowles spoke up during the meeting, saying that NPR should expand its role as “a place that is known for cultural expression.”

Ellen Rocco, general manager of North Country Public Radio in northern New York, agreed: “There is this huge audience for a kind of trusted curatorial service and I think NPR can do that, as it applies to music and a broader on-air discussion of books.”

In pure NPR style, the meetings will lead to more meetings to refine the network’s new mission statement. “If we are successful, in five years there will be more NPR reporters, reporting in more depth, from more places around the country and the world,” Handley said. “There will be more listeners, and more Americans will be well informed.”

Sensing a more certain future

The Kroc money is especially meaningful to veterans from the organization’s early years, when the glow of public radio idealism faced constant uncertainty.

NPR went on air in 1971, amid the turmoil of the Vietnam War and a time of great turmoil for the relationship between commercial broadcasters and the government. In fact, May 10 was a bleak anniversary for NPR. It marks 20 years since Frank Mankiewicz, a well-connected Washington insider, resigned as president of NPR amid a financial crisis that almost brought the network to ruin. It was bailed out with federal money, repaid, ultimately, with the help of the member stations.

The 1990s were no easier, as public broadcasting was buffeted by critics from the right who strove to curtail the NPR budget. Ray Suarez of “The NewsHour with Jim Lehrer” on PBS, was host of the NPR show “Talk of the Nation” in those years and he remembers how the show made contingency plans for different levels of cuts, ranging from 20% to 60%. Yet NPR survived and gradually found the means to separate itself from direct government funding by increasing fees from its member stations and launching a more assertive campaign for corporate and foundation donations.

The independence fuel of the Kroc gift is not likely to lower NPR’s profile as an organization squarely in the middle of the culture wars between the political advocates of the right who have traditionally charged NPR with being too liberal and those critics who say the network bends over too far to disprove the liberal label.

Next week, Fairness & Accuracy in Reporting, a journalism monitoring organization that labels itself “progressive,” will unveil what it calls a “major ... critical” study of NPR. Steve Rendall, senior analyst for FAIR, says: “The thing we’re asking is, where’s the public in public radio? We find that, while NPR is not a slave to sound-bite culture, and while NPR is clearly a prominent source for news, it is largely reliant on the same elite voices that dominate mainstream commercial media. Contrary to the view that NPR is a liberal media outpost, Republicans appeared in the period studied substantially more often than did Democrats.”

FAIR based its study, Rendall says, on scrutiny of NPR’s daily programming throughout June 2003.

In an interview, veteran “60 Minutes” correspondent Morley Safer made clear his unhappiness about the April 30 removal of “Morning Edition” anchor Bob Edwards, especially NPR executives’ failure to do a better job explaining it. But he declares NPR’s importance in a broadcast news environment he critiques savagely.

“I look at broadcasting now and the sad, awful success of Fox and that hectoring kind of giving voice to the fringe, people like Bill O’Reilly and Limbaugh.... That has nothing to do with liberal or conservative. This has nothing to do ... with real understanding. These are silly midway acts ... they are not a rat pack or mouse pack.”

Any creature comparisons to make to NPR?

“NPR is a very good, reliable collie that occasionally bares its teeth.”

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(BEGIN TEXT OF INFOBOX)

An NPR primer

Here are some basics about National Public Radio.

Content and general role

Creates programming, from its main news magazines “Morning Edition” and “All Things Considered” to a variety of other shows, including music (“Performance Today”) and business (“The Motley Fool”). The network produces and distributes 32 programs offering news, talk, music and entertainment.

NPR staff and budget

Employs more than 700 reporters, producers, editors, and online and administrative staff, with 600 employees in Washington, D.C. It has 13 foreign bureaus and 21 domestic bureaus. Annual operating costs are roughly $110 million. The newsroom budget is about $45 million.

NPR and local stations

Serves 274 public radio licensees, which often own more than one station or broadcast signal, adding up to 778 signals. Most of the license holders are schools and school boards.

Funding and structure

Once dependent on federal funding, through the Corporation for Public Broadcasting, it no longer relies on direct government subsidies. It is supported by fees paid by member stations, and by donations from corporations, foundations and individual givers. The terms of its relationship with its stations prohibit NPR from conducting on-air soliciting. Fund drives that listeners hear raise money for local public radio stations.

Responses can be e-mailed to Calendar@latimes.com.