According to a statement issued, yesterday, by David Strand, the LCMS radio program, Issues, Etc. lost about $250k last year. According to the "Save the LCMS" website they raised over $900k last year. So that makes the budget for Issues, Etc. about $1.2M. We are also told at "Save the LCMS" that the LCMS Foundation was charging Issues, Etc. a 38% fundraising service fee. That would be nearly $350k. That means that synod, through it's various entities actually took in more money than it cost to produce and broadcast Issues, Etc. This also means that Issues, Etc. was in fact self supporting. So how is the synod actually saving money on this deal?
One note that needs to be made in the form of full disclosure, I have heard through the grape vine from a private source that the 38% service fee charged by the LCMS Foundation may not be accurate. But, if it is not accurate, why hasn't the LCMS Foundation issued a denial. This is a damning fact. If I were at the Foundation, and such a thing was in circulation, and it was not in fact true, I'd be running at full sprint to the nearest microphone, blog site, etc. to get my denial out, like yesterday.
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The money thing will never add up. If it was a money Issue, they would have started pleading on the air with something like, "hey folks, they are only giving us 2 more weeks to raise this much money, or we're gone." Then, the last day, they could have had a going away show, with clips of former guests, saying good bye to Todd & Jeff. But, the money would have come in, because people supported & loved Issues Etc. They obviously had their "groupies" like Star War "groupies". We loved them & learned so much from them.
Also if it was money, they would not have removed the archives. That speaks that it was more theological or political, or both.
Think about it. Get rid of the best confessional voice, (Law & Gospel is great, too, but he volunteers his time, so it'd be very hard to claim a money issue there) & start bringing in a watered down version of Lutheranism. Or sell the station to support more Ablaze, non-Lutheran churches. The money from selling the station can plant all kinds of them all over the country.
It will take a lot to make me believe the money issue. It just doesn't add up.
In the interest of accuracy, I believe it is important not to propagate this unsubstantiated figure of 38-40%. We need to keep the truth on our side. While I believe those who initially estimated the costs at 40% did so in good faith with the best information they had at their disposal at the time, the figure is not quite that high. Nevertheless, it is still quite high.
The official "CPDR" (cost per dollar raised) for KFUO is $.275 for AM and FM combined. This is what you will be told if you ask the Foundation, and they have official audited figures to back it up.
That said, I also should add that neither the Foundation, nor KFUO appear to have kept track of what fundraising costs could be attributed specifically to the AM station or to Issues, Etc.
On KFUO's own financial books, the fundraising costs are arbitrarily split 50/50 between the AM and FM columns.
If you want documentation, on page 6 of the Foundation's own financial report are the figures from which the Foundation calculates a $.275 CPDR. The synod's audited financial report supports the $.275 figure as well.
The Foundation's report shows that KFUO had $1,086,756 in "Direct Gifts". These include: "cash, stock and distributions from donor advised funds." And, KFUO had an additional $227,425 in "Matured Gifts Distributed." These include: "All distributions other than direct gifts including trusts, endowments, gift annuities, pooled funds and bequests."
You get the same $.275 CDPR using the figures on pages 24 and 25 of the official audited LCMS "Consolidated Financial Reports" for the fiscal year ending June 30, 2007.
Just wanting to keep the truth on our side. :-) The difference between 28% and 38% is totally insignificant when considering the big picture.
Let's just forget all the financial details for a moment and suppose that Issues, Etc. WAS costing the station a lot of money. So what?
The question remains, why was this particularly effective apologetic outreach considered unworthy of synod resources while so many other questionable modes of outreach (e.g. Ablaze!) are garnishing exponentially more of our synod's resources? That question demands that we realize there are theological considerations involved here.
The more disconcerting question is whether this was more than a simple matter of differences in priorities. Was Issues, Etc. considered to be a monkey wrench in the smooth oiled machinery of "change" in the LCMS toward a church growth approach to ministry and outreach? I believe the answer to that question is YES! That would mean this was not only theologically motivated, but politically calculated.
THAT is the real issue we need to focus on.
Ooops! I left out the actual fundraising cost figure reported in the LCMS audited financial report. That's $361,000 for KFUO. That's the amount KFUO split 50/50 between the AM and FM columns.
Even a 28% service fee is way out of line. My understanding is that they could have hired an outside fund raising management firm for 10%.
I should add a welcome to Erich. It's good to know that a few people are finding there way here.
Thanks for the welcome. I came to your blog through a link provided by Pr. Weedon.
As for the fundraising, everybody wants out from under the Foundation. The Foundation is just not efficient. I believe the fundraising was all centralized under the Foundation about 2001. It's a failed experiment.
Probably the most important entity to get out of that structure is LCMS World Relief and Human Care, and they're only getting charged 12%. Generally speaking, in the fundraising business the more money involved, the greater the efficiency, and the lower the CPDR. KFUO was small potatoes by comparison.
It's worth noting that the initial removal of the archives could have been for financial reasons.
I have a source in IT at the international center who tells me that the bandwidth costs were really high.
Good point, Pr. Lehmann. Yes, the bandwidth is expensive, but worth every penny for getting Issues, Etc. out there to the world!
According to David Strand's recently release "Q&As":
"Since last October (discounting November, when a sizable anomaly was known to occur), the average count of monthly “Issues” downloads was 113,801, or 3,793 a day. These are good numbers, and KFUO-AM is grateful to those who have accessed “Issues” and other AM programs in this way. Of course, providing this downloading service incurs costs for the Synod, including about $30,000 this past year for bandwidth."
Hmmm... $30,000 for bandwidth for Issues, Etc. for 3,793 downloads/day vs. $25,000 grants for "mission" church plants like Jefferson Hills??? Where are the synod's priorities?
This makes my point well. Yes, Issues, Etc. cost money. But so what? Everything costs the synod money. The problem is the mistaken priorities of our current synodical leadership.
I have trouble believing that the bandwidth for downloads cost as much as they said it does. It's the live stream that's expensive. Bandwidth that I use for my website is 4.95 a month. Granted, I'm not putting 15 hours a week up. But seriously...30,000??? Was the LCMS Foundation their nameserver host too?
Rev. Fisk, you have a valid point. The average in the industry right now for bandwidth is well below one dollar per gigabyte. Amazon's S3 service charges under 20 cents per gigabyte. The following is from Amazon's website:
Data transferred into Amazon S3 costs $0.10 per GB, while data transferred out of Amazon S3 costs $0.18 per GB for the first 10 TB (10,240 GB). Volume discounts are automatically applied for additional data transferred out of Amazon S3; the next 40 TB cost $0.16 per GB and all additional data transferred out of Amazon S3 in a month costs $0.13 per GB. Volume discounts are applied separately for the U.S. and for Europe. There is also a small per-request charge that depends on the operation and the location of the servers you are accessing. PUT and LIST operations cost $0.01 per 1,000 requests, while all other operations cost $0.01 per 10,000 requests for buckets located in the U.S. PUT and LIST operations cost $0.012 per 1,000 requests, while all other operations cost $0.012 per 10,000 requests for buckets located in Europe.
David Strand says the "average count of monthly 'Issues' downloads was 113,801." And, the average 1 hour episode of Issues, Etc. appears on my iTunes to be about 8MB.
113,801 downloads per month X 12 months = 1,365,612 downloads per year X 8MB each = 11,924,896MB/year.
That rounds out to 12,000 gigabytes per year. If they used Amazon's service, they could do this for under $2000/year. If it actually cost $30,000/year, as David Strand says, then the synod is paying $2.50 per gigabyte transfered.
It appears this cost figure is either inflated, or whoever was in charge of purchasing bandwidth was not aware that there are much cheaper services out there to choose from than what they were using.
But, there's another financial mismanagement question for someone to investigate.
I'm still afraid that this is taking the focus off the real issues, which are theological and political. Does anyone really believe that the use of expensive bandwidth would be theologically motivated or politically calculated? I think you can chalk this one up to the fact that the management of KFUO is just really bad at running a business -- as evidenced by the fact that the previous BCS gave them a vote of no confidence.
I still say the money thing needs to be investigated. But the focus of our investigation should be exposing the bad priorities of the current leadership, and their political motivations for actions like canceling Issues, Etc. If all we prove is that KFUO management was doing a horrible job of managing KFUO, where does that get us?
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