Our Clients in Arts & Culture

Sector: Arts & Culture

Website: ckua.com

CKUA

The CKUA Radio Network is a storied, beloved non-profit organization. These are wonderful attributes until, as its chief executive officer learned in 2011, you need to borrow money.

Since going on the air in 1927, CKUA has been a trailblazer: Canada’s first public broadcaster, the first FM station in Alberta, first in the nation to stream online and the only station in Alberta to broadcast its over-the-air signal throughout the province. Moreover, it’s funded by a legion of loyal listeners who don’t bat an eye at donating dollars for a service they can get for free.

The problem? Well, the banks called it “social risk.”

When then-station CEO Ken Regan first heard that phrase, he was trying to piece together a financial plan to get CKUA out of its drafty, flood-prone, possibly haunted digs in the Alberta Block on Jasper Avenue. The destination was the Alberta Hotel, a project eight blocks east that had even more history than CKUA. The 1903 hotel, where Sir Wilfrid Laurier stayed on the eve of Alberta becoming a province, had been carefully dismantled in 1984 and was being painstakingly rebuilt as the historic façade of an entirely modern structure.

The undertaking was huge. CKUA would buy the building for $12 million from architect Gene Dub, then complete more than $5 million in interior construction to suit its needs as a contemporary broadcast enterprise.

But the opportunity was sheer magic — a magnificent historical building with purpose-built studios, a state-of-the-art performance space and an archive-quality library to protect CKUA’s astounding collection of recorded music.

“It was all playing out exactly as we had hoped,” Regan says. “All we needed to do was raise $20 million.”

And he was optimistic. CKUA would sell the Alberta Block, have a million or so in the bank and high hopes for $15 million or more in government assistance.

With its track record for raising money from listeners, it also set a $5-million goal for a capital fund drive. But it would also need a loan, so Regan spent months meeting with bank managers at a half-dozen financial institutions. They were effusive about their love of the arts and admiration of CKUA, he recalls. Not so helpful, however, when it came to the business at-hand.

“I finally said, ‘You keep saying wonderful things but, you know, I need the money,’” recalls Regan, who retired in 2017. “That’s when they coined a phrase for me that I hadn’t heard before … They said, ‘We just can’t take on the social risk.’ And I said, ‘Social risk? Social risk? What is social risk?’ And they said, ‘Well, what happens if we ever had to foreclose?’”

In Regan’s laugh, you can still hear a touch of disbelief. “I said, ‘What you’re telling me is that CKUA is so loved,’ ” he pauses, “ ‘and so well-appreciated by the community,’ ” another pause, “ ‘that you can’t afford to give us the money?’ They shrugged their shoulders and said, ‘Yeah, that’s right.’ “And that’s when I realized how difficult it is for people who do great work in the not-for-profit realm. Because your success becomes a liability.”

RISK AND REWARD
Edmonton was one of the first communities in Canada to recognize that non-profit, socially motivated organizations couldn’t get a break from traditional lenders.

In 2008, the City of Edmonton and Edmonton Community Foundation (ECF) created the Social Enterprise Fund (SEF), offering loans to organizations with a mission to make an impact — “like Dragons’ Den, but for good,” states the cheeky description on its website.

It was not long after that CKUA and SEF started talking; one with a financial problem and the other with money to lend.

HOW TO (FUND) RAISE A NEW RADIO STATION
In 1997, CKUA went off the air for five weeks, a victim of politics, finances and an attempt at privatization. Those were dark days with a silver lining. The ensuing “Touch the Transmitter” campaign demonstrated how deeply Albertans cared about the radio station and became the foundation of its twice-yearly donor drives, which now raise more than $3 million per year for operations.

In 2001, the radio station got its first grant of many from ECF — $10,000 to support its computerized pledge room. Not long after, a small but steady new source of revenue arrived in the form of ECF endowment funds. The predictable nature of annual endowments is important to CKUA, which is, as its current CEO Marc Carnes says, “always in a very vulnerable position with its customer-funding model.”

And in 2011, as Regan was puzzling over the financial plan, the station once again got a lift from ECF when the SEF agreed to lend CKUA $1.5 million for its construction work on the new building.

SEF was very early money in and the rest fell into place. By the end of 2011, the city had committed to a $5-million grant, matched in October 2012 by the province. By then, Regan had found his way to ATB CEO Dave Mowat, for conversations that quickly turned into a loan of almost $6 million.

In the end, the SEF money became all-important bridge financing that helped CKUA pay the bills as the grant money — which was spread out over numerous years — trickled in. “The fact that the Social Enterprise Fund existed was tremendously fortunate for us,” Regan says.

BUILDING THE FUTURE
Carnes never worked in the old building, but he doesn’t need to have lived the comparison to realize the value of the new one. He says any radio station’s long-term sustainability is based on the success of its on-air experience and its digital presence. For CKUA, finding a home in the Alberta Hotel has added a third pillar: Human connection.

“It allows us to bring people into the magic a little bit more and have a better appreciation of the power that music and the arts have in our lives,” Carnes says.

The lobby became home to ATB’s Arts & Culture branch, a clubhouse/arts venue/financial institution for creative and cultural workers.

Meanwhile, anyone can book a building tour to peek into the studios and explore the legendary library with its 140 years’ worth of sound recordings.

The CKUA performance space, with its soaring wall of windows, headquarters the donor drives, but it’s also rented for community functions and special events.

Regan says this ability to engage with the general public just didn’t exist in the old building. “We occasionally tried to do something where we would invite the community,” he says, “and it was always cramped and dirty and dusty.”

The move has also shaken up CKUA’ s business operation, as the owner of the building, it is now landlord to four organizations: Revel Bistro & Bar, the Pembina Institute, Canadian Parks and Wilderness Society and Serious Labs, a tech company that does virtual reality training for heavy equipment operators.

“We’re not a grassroots organization anymore. We have almost a $20-million asset that we own, we’re 70 people on the payroll, we have two studios in the province,” Carnes says.

“We’re not the same little go-getter that we once were. We’re definitely maturing in this organization. And this building is part of that.”

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