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Headquartered in St. Paul, Minn., Minnesota Public Radio (MPR) evolved from a small public station that 26-year-old William Kling established at St. John’s Abbey and University in Collegeville, Minn. in 1967. By 2004, Kling’s venture had grown into a regional network of 38 stations, serving more than 5 million people. The organization had more than 83,000 members and boasted the highest percentage of listener membership of any community-supported public radio network in the nation. Much of MPR's growth and success had been built through what Kling referred to as "social purpose capitalism … the application of the traditional principles of capitalism … to a nonprofit organization [to] benefit the public sector.”
Kling's first foray into "social purpose capitalism" was in 1981 when Garrison Keillor, the popular host of "A Prairie Home Companion," wanted to reward loyal listeners with a free poster of “Powdermilk Biscuits,” an allusion to a fictitious sponsor that was part of a Prairie Home gag. The giveaway drew over 50,000 responses, much more than originally anticipated, costing $60,000. To avert finincial ruin, Kling printed an offer for other products that listners could buy on the back of the poster. Netting $15,000 to $20,000 from that poster convinced Kling that there were opportunities to secure MPR's financial situation. Kling created a number of for-profit ventures to support and build the MPR empire.
By 2004, however, MPR and Kling were the subject of unrelenting public criticism. Ostensibly, the issue was MPR’s unwillingness to disclose Kling’s compensation from the private for-profit enterprises spawned by MPR. After later disclosing this information, Kling became the subject of condemnation amid accusations of conflicts of interest and nepotism. Knowledgeable observers, however, saw the real concern to be fear that a public benefit organization was being driven by profit-making priorities.
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Case No: SI92