The following letter was sent in January of 2011

Dear Supporter of The Spirit,

The board of Extreme Grace Media (EGM) would like to thank you for standing with and supporting your local Christian radio station through your gifts.  There are changes coming to your radio station.  If you have an unfulfilled pledge from the September Sharathon, you will not be receiving future giving summaries.  If you have set up automatic gifts, you may have noticed that your automatic donations have stopped.  This is because we at EGM feel you need to have a choice in continuing those donations in light of the message presented in the remainder of this letter.  We hope you will take the time to read this letter.

The board of Extreme Grace Media (EGM) has been doing a lot of praying and analyzing of numbers since September.  Fall Sharathon was good compared to the previous 5 Sharathons under EGM, all of which reached 50% to 60% range of their goals.  Fall 2010 finished just under 72%.  That is great!

 

The numbers behind the recent total tell a story.  The number of listeners donating during Sharathon did not change; there were 315 individuals that made a pledge or donation which is similar to the most recent 2 Sharathons, Fall 2009 and Spring 2010.  Most of the increase in donations are the result of three large matching challenges all around $5000 each.  Take away these matching challenges and their matching pledges, and the total would be around $85,000, very similar to the previous Sharathons.

 

And we can't neglect the fact that the goal was not met.  The financial goal is what it takes to run the station at a bare minimum level without paying 4 employees.  When this giving cycle ends in March, EGM will have operated the station for three years, never once meeting a Sharathon goal.

 

When EGM began operating the station, there was one main goal:  keep the Christian CHR(Contemporary Hit Radio) music format on the air in eastern Iowa.  This is still our goal.

 

We have heard many comments, most as a direct result of the "Crossroads" letter from August 2010.  The number one comment is that it is the music that makes the most difference.  While being local and community oriented has been the vision and goal of EGM, that does not seem to be the most important part of the ministry for most people. 

The board of EGM believes it has a way to ensure that Christian CHR stays on the air here for many years to come.  With much prayer and serious thought, The Spirit is about to make a change.  The change may not be noticeable to a large number of listeners.   EGM believes this will be a change for the better. 

By June of this year, The Spirit will be transferred to Educational Media Foundation, and will begin airing a national network called Air 1 which plays essentially the same music you have enjoyed listening to on The Spirit for many years.  With the transfer, the signals in Cedar Rapids and Waterloo will be significantly improved, and the signal in Iowa City will be noticeably better as well.

This was not an easy decision.  The board discussed this with several advisors, prayed many weeks about it, and does not take this lightly.  Perhaps without the 2008 flood and the economic condition of the country, things would be different.  But, the fact is that sufficient support for the station does not exist at this time.  Without the ability to hire a proper staff to run the station, the board would continue to sacrifice time, family and relationships to keep the station moving forward while having to maintain employment outside the station to meet family financial responsibilities.  In the end, given all the information and circumstances, this decision had to be made.

Until the transfer is complete, EGM will continue to operate the station to the best of its ability.  The board thanks all of its supporters for their gracious and generous gifts, and hopes that the listeners continue to find support and encouragement in the music played on The Spirit.  If you have comments or questions, you can e-mail them to future@thespirit.org.

In Christ,

chris behmlander

President

Extreme Grace Media

The following letter was written in August 2010.

Dear Friend of The Spirit,

Your radio station is at a crossroads.  The board is faced with major decisions that will affect the future of your radio station.  Economic and financial circumstances have forced the Board of Directors to reevaluate the direction the station should be headed.  To understand the current situation, I want to tell you how your station got to where it is today.  

While this is long, I hope and pray you read it and understand what it means.

In December 2007, several of us learned the station was in jeopardy of going off the air in January 2008 unless a solution could be found to a major problem.  I won’t bore you with the details, but it was a matter of life or death for the station.  January 18, 2008, was the deadline when the station and its assets were to be sold at auction.  If Christian CHR  (Contemporary Hit Radio) music was to stay in eastern Iowa, a solution had to be found.  Several people were consulted, a detailed analysis of finances was made, and a lot of time was spent in prayer.  The result was the formation of Extreme Grace Media (EGM) as an Iowa non-profit corporation on January 7, 2008.  With help from an attorney in Washington, D.C., an agreement was submitted to the debtor in control of the station’s destiny for approval one day before the deadline.  The agreement was accepted, saving the station.  However, the work was far from over.

EGM began its tenure at your station under the premise that its Board of Directors would, for a period of time, provide services to your station at no cost, essentially donating the salaries of a full-time general manager (Regina), a full-time business manager/CPA (Mama Kay), and a bit more than half-time technical director (chris).  The board continues to do this today, two years later.

In January 2008, all of the station’s programming came from a network.   EGM’s vision was to make your station “your station” by having the station involved with the community, partnering with local churches and missions, and working together to build up the body of Christ.   The on-air personalities would be involved with events in the community.  We believe EGM has met its goals. 

EGM’s goals for the station were:

Local programming

Live morning show

Live afternoon show

Community involvement

Expand reach (coverage) to Iowa City and Waterloo

EGM’s efforts to meet these goals:

All locally programmed music since July 2009

Morning show in May 2008

Afternoon show in September 2009

Involvement in many events over the past two years

Iowa City in March 2008;  Waterloo in September 2009

The coverage expansion was accomplished without using listener or Vision Partner funds.

A local, community-involved station meant an increase in staff which required more office space. The Spirit had been operating out of 800 square feet of leased office space since May 2006.  That lease expired at the end of April this year.  Having 5 people trying to do their jobs in very tight quarters was becoming more and more of a challenge.  EGM began looking for a larger home in the summer of 2009.  After looking at many options, including trying to get more space in the current location, EGM decided to purchase a building.  The goal in choosing a building was to keep monthly expenses the same, and have at least twice the space.  EGM found a 4500 square foot building in Marion for a price that would satisfy the goal.  Operations were moved to that building on June 1, 2010, but the renovation is not complete.  The down payment for the building did not come from listener donations.

That brings us to today.  As you know, The Spirit has struggled to meet Sharathon goals for several years.  Since September 2008, the flood and the economy have resulted in lower support because listener resources have been needed for rebuilding lives. The station struggles day to day.  Bills are being paid, and donations are coming in, many of them just in time to meet the need.  God always provides.  Anything out of the ordinary like broken equipment is a financial strain.

The level of effort required to maintain operations where they are is greater than what the board of directors and staff can provide. The station needs a paid full-time general manager and a paid office/business manager.  Earlier this year, when two of your station’s staff moved on to another opportunity, the station was left with two critical positions unfilled.  To continue to operate the station at its current level requires more time and effort from the board and hiring of replacement staff.  None of these are possible at this time. 

EGM has always made it clear that the finances of your radio station are open to be examined at any time.  Examining the Profit and Loss statement will lead one to the conclusion that the support of listeners is not enough to provide the kind of station that EGM wants it to be: one that is very involved in the community and provides the best in contemporary Christian music.

EGM is at a crossroads.  The board is faced with major decisions that will affect the future of your radio station.  Should it fill the vacant positions? Should it move the station back to network programming?  How does it meet its financial obligations?  During this period, all possibilities will be considered including the possibility of selling the station to another organization.  Nothing is off the table.  All of this will be done with constant prayer seeking God’s guidance for The Spirit’s next step.  The board hopes to reach a decision no later than the end of September.

I ask for your prayers for the staff of The Spirit and the board of EGM during this time. Tell all those you know who benefit from your station our situation and ask them to pray for it as well.

If you have questions or comments, feel free to call the station, or send an e-mail message to crossroads@thespirit.org. 

In Christ,

chris behmlander

President

Extreme Grace Media

Extreme Grace Media and The Spirit

Frequently Asked Questions

(and frequently thought questions you were afraid to ask)

History of Extreme Grace Media

Financially related questions

General questions

HISTORY

Q100. Who or what is Extreme Grace Media?

A. Extreme Grace Media (EGM) is a local non-profit or not-for-profit corporation, incorporated in Iowa January 2008.  It is also a 501 (c)(3) organization as designated by the IRS.  It was formed with the sole purpose of keeping CHR Christian radio in Easters Iowa.

Q101. What is the difference between a for-profit and a not-for-profit organization?

A. In simplified terms, the difference is the purpose or mission of the organization. A for-profit has owners whose purpose is to realize net-profits for its owners.  A not-for-profit is not owned by anyone.  It has a Board of Directors who are entrusted with managing the non-profit to fulfill its mission to meet a socially desirable need of the community or its members.  

Q102. Is EGM managed by a Board of Directors and no one owns it?

A. Yes.

Q103. Who are the Board of Directors entrusted with managing EGM to fulfill its mission?

A. chris behmlander, Regina behmlander and Karen Goldberger

Q104. What is the mission of EGM?

A. The mission of The Spirit - KXGM (Extreme Grace Media Inc.) is to bring the good news of the Gospel of Jesus Christ through contemporary Christian music and brief edifying segments via radio and the Internet while displaying the highest professional standards.

Q105. Does EGM own The Spirit?

A. EGM owns the FCC licenses and other necessary facilities to operate the radio station known as The Spirit.  

Q106. How long has EGM controlled and operated The Spirit?

A. The process to purchase The Spirit from Friendship Communications, another not-for-profit organization, began in January 2008 and was finalized July 18, 2008.

Q107. Why did EGM purchase The Spirit?

A. The financial situation of The Spirit in 2008 was such that it would have been sold at auction if an agreement could not have been arranged by January 18, 2008.  Knowing the situation and after much prayer and seeking God’s guidance, EGM was formed for the purpose of keeping The Spirit from going off the air in Eastern Iowa.  

Q108. What is KXGM?

A. KXGM are the call letters of the station known as The Spirit.  All radio stations have call letters assigned by the FCC.   The K is because the station is west of the Mississippi.  The XGM is for God's eXtreme Grace and Mercy.

 FINANCIAL

Q200. What does the 501 (c)(3) designation by the IRS mean?

A.  That means all donations to EGM/The Spirit are tax deductible as charitable donations up to the extent allowed by law.

Q201. Where does EGM/The Spirit get its funding?

A. Currently approximately 70% comes from listener donations and 30% from our Vision Partner donations.  

Q202. To what extent have listeners supported The Spirit in prior years.  

A. Please see graph below.

Amounts from 2005, 2006 and 2007 were from previous non-profit organization's records.  

The amounts for 2008 are actuals from Mar to Dec, the portion of the year EGM operated The Spirit.

The amounts for 2010 are through August 15.

Q203.  What are Vision Partners?

A:  Vision Partners are businesses, churches, and other organizations that share the vision of EGM and The Spirit for reaching youth and young adults with the Gospel through music.  Vision Partners donate to The Spirit.  In return they are thanked on-air for being Vision Partners.

Q204. Is EGM allowed to sell advertising or commercials to help defray the cost of running the station?  

A. NO.  The FCC prohibits Non-Commercial/Education (NCE) radio stations from selling advertising.  KXGM-FM, The Spirit is classified as an NCE station as are all stations below 92 MHz     Also, non-profit organizations are highly regulated by the IRS regarding the source of their income.

Q205. Are the music companies and artists allowed to pay EGM for playing their songs?

A. NO.  Pay for play, as that is known, is against the law.  This is also called payola.  

Q206. How has the cost of the expansion and the new building affected the current financial situation?

A. It hasn't.  No listener dollars were used for either.  Both were accomplished through interest free loans and donations for those purposes.  The loans are being deferred and partially written off each year at the request of the donor.  The monthly expense of buying a building compared to leasing a facility is almost expense neutral.  Lease payments go up annually and a building is permanent.

EGM knew the lease at the Hiawatha facility was to expire May 2010.  It was an extremely crowded 800 square feet of space in which to operate.  There was no other space to lease in that area.  After months of prayerful searching, the building in Marion was purchased. The current building offers adequate space for the staff and also has an opportunity for community use with a Prayer Room and a Community Room.

Q207. Will EGM/The Spirit always be listener supported?

A. Yes.  As stated, by law EGM cannot sell commercial time, receive funds from the recording industry or go into any type of profit-making business.   Just like all charities or non-profits, The Spirit is dependent on donations to stay in operation.  

Q208. Are there fundraising options available for EGM other than direct listener support?

A. The cost/benefit ratio does not always support the time and effort that goes into such fundraising activities.    There  are venue/facility and other expenses which can be costly, and the proceeds are not always as hoped for.   They are are extremely time consuming for such a small staff who is also busy out in the community attending and participating in all the various parades and events, and doing the normal business of a radio station.

Q209. Are grants available for non-commercial radio station, like The Spirit, and, if there are, are they hard to get?

A. There are organizations that could possibly provide grants to stations like The Spirit, but it is not easy to get through the process of even being considered for a grant.  The time required from staff to do this is not available.  Also, grants of this type are generally not provided for normal operating expenses, but rather for special projects.

Q210.  When will EGM/The Spirit stop asking for money?

A:  Well, most likely this will happen shortly before the second coming of Christ.  Just like most non-profit organizations, EGM is completely supported by donations and grants, and as many people know, the bills continue to come even if they can't be paid.

Q211.  Is it true that the Board has been an unpaid working Board since March 2008?

A: Yes.

Q212.  What positions do the working board fill?

A:  The board fills these positions:

General Manager/On-air

Business Manager/Accountant

Engineer/Technical Director 

Q213:  If those positions were paid, what would be the aggregate annual cost?

A: Based on industry standards, if those positions were paid positions the annual aggregate base salary would be between $160,000 and $170,000.

General

Q300. What happened to AM 850, KXGM?

A. There was not sufficient listener support to cover the expenses to keep the AM station on the air, and it was in serious need of upgraded equipment and repairs.

Q301. Why is The Spirit no longer putting on concerts?

A. While the intent is not to make money from concerts, The Spirit cannot afford to lose money on concerts either.  Concerts are expensive to put on and ticket sales have shown a lack of interest in attending the concerts.  The last concert scheduled had to be canceled because less than 80 tickets were sold.

Q302. Why do I hear another station? Why can't I hear you?  Why does your signal sound weak?

A. From about May through early September, atmospheric conditions really impact propagation of FM radio signals.  Depending on the conditions, a signal can propagate further than normal or not very far at all.  

Before May 2009, The Spirit (KXGM-FM 89.1 in Hiawatha) enjoyed relatively clear airwaves to the south.  In May 2009, an Iowa Public Radio station went on the air in Ottumwa on 89.1 (KDWI).  This station frequently interferes with The Spirit's signal in late spring, summer and early fall during the morning and late afternoon hours.  If you want to get technical,  The Spirit's signal is polarized vertically and is directional to the northwest from a tower west of Hiawatha. (That's two strikes against it to reach Cedar Rapids, Marion and points south and east).  KDWI is circularly polarized and omni directional, allowing it to overpower The Spirit in those problem times of poor propagation conditions.  The Spirit's signal is the way it is for several reasons.  One of the reasons is a former TV channel 6 in the Quad Cities.

Because the TV channel 6 station no longer exists, The Spirit has been granted permission to change its transmitter such that it is less directional and circularly (both vertical and horizontal components) polarized.  Calculated coverage based on propagation models and terrain information show a great improvement for Cedar Rapids, Marion, and even Mount Vernon.  These changes require capital to buy and install a new antenna and transmitter.  The estimated cost is between $50,000 and $60,000.