Underwriting; It’s Not Advertising

This is a concept the average person has a hard time understanding.  So here’s an explanation.

WHY ISN’T IT ADVERTISING?

It’s not advertising because no prices are listed.  No comparisons to other businesses and products (including superlatives like ‘best’, biggest’ or newest’) or their prices are included.  No ‘calls to action’ such as ‘buy now’ or ‘come see our…’ or anything else that asks people to do something are included.  Imagine an ad that has none of that.  Underwriting is about businesses supporting public broadcasting, not about public broadcasting selling them the chance to promote their businesses.  *

BUT WHAT’S WRONG WITH ADVERTISING?

That’s easy, nothing.  Advertising is how for-profit media, radio, TV and newspapers, make their money.  Even if it’s something the user pays a subscription for, most of the time, the majority of expenses are paid by advertising revenues.  To use an old-fashioned comparison, newspaper subscriptions don’t pay for anything but delivering your paper.  The cost of running it and printing it and every other cost involved, is paid for by advertising.  So don’t complain about the ads.  Without them, there’d be no paper.

SO WHY DOESN’T PUBLIC BROADCASTING SELL ADVERTISING?

The short answer is because we’re not allowed to.  But there’s a reason for that.   The Corporation for Public Broadcasting, a nonprofit itself, includes this as a requirement in their grants, which are a major portion of any public broadcaster’s budget.  Also, 501(c)3** Nonprofits are not permitted to promote for profit businesses.  That’s an Internal Revenue Service rule.  The reason for not taking money to promote for profit businesses is that it helps to ensure that advertisers are not influencing programming decisions.  Public broadcasting is meant to be run by its membership, not it’s underwriters. We’re not actually allowed to sell anything.  Whatever your public radio station gives you, premiums, underwriting spots, etc. is a token, a gift to you for showing your support.  To qualify, the monetary value of whatever it is has to be less (usually a lot less) than the amount donated.  This includes underwriting.

*HERE’S A GOOD DEFINITION OF UNDERWRITING

excerpted from Wikipedia

An underwriting spot is an announcement made on public broadcasting outlets, especially in the United States, in exchange for funding. These spots usually mention the name of the sponsor, and can resemble traditional television advertisements in commercial broadcasting to a limited extent; however, under the terms of a public broadcaster’s license from the Federal Communications Commission, such spots are prohibited from being promotional (such as making product claims, using superlatives, or being more than 30 seconds long) or making any sort of “call to action” (a phrase that refers to “any device designed to prompt an immediate response or encourage an immediate sale” such as announcing prices or providing an incentive to buy).^[1] In the U.S., these restrictions apply to any television or radio station licensed as a non-commercial educational (NCE) stations, and even for non-sponsoring companies and products.

Donors who contribute funding can include corporations, small businesses, philanthropic organizations, charitable trusts, and individuals. An underwriting spot can typically include the name (and, in local underwriting spots, address) of the underwriter, possibly including a company slogan (provided the slogan does not contain a call to action) and a message of appreciation, either from the sponsor indicating its pride in the program or from the station indicating its thanks for the underwriter’s sponsorship. Individual spots, more apparent on public radio, often are used to express personal appreciation for the station’s programming, and often also offer family members or friend best wishes on a major life event such as a wedding, anniversary or birthday.

**the Internal Revenue Service code that governs the specific type of nonprofits that includes public broadcasting.