The only direct government funding NPR receives is through competitive grants from government agencies for specific projects. Such grants are awarded by the Corporation for Public Broadcasting, the National Science Foundation, and the National Endowments for the Arts and the Humanities, and typically represent only 2% of total revenues.

The Corporation for Public Broadcasting (CPB) gets about $400 million in appropriations from Congress annually now, and about the same from state governments, which make up roughly 1/3 of it's budget. That gets us :

educational and quality programming, outreach services, education, workplace and long distance training, public safety initiatives, and partnerships with other community organizations. [...] CPB has supported traditional programming, web sites, outreach efforts, educational resources and training materials for public broadcasters to use in collaboration with state and local governments, schools, community centers, libraries, museums and other community
organizations.

CPB is not looking to the federal government for all of it's budget :

The Public Broadcasting Act limits the federal share of the total revenues for public broadcasting to 40 percent. This cap was enacted not only to protect against undue governmental control, but also to act as a guarantee of continuing support. With a stable and continuous source of federal funds, it was felt that public broadcasting would be able to leverage additional donations from other sources.

Since 1976, Congress has recognized the importance of providing an advance
appropriation for public broadcasting in order to provide stations lead-time to produce and acquire programming; allow stations to use Federal funding as leverage for other sources of funding; and reduce the ability and temptation of political influence and/or control of programming decisions.

CPB is both a producer of original programming, such as the Ken Burns documentaries, and a funder and early adopter of technological innovation, such as PAD (program associated data), digital radio, digital television, PRX, podcasting and others. They provide coverage that commercial stations lack because although it may be important, it is not commercially lucrative, such as full political convention coverage or congressional committee coverage. It produces quality teaching resources, such as Frontline, documentaries and teaching materials and references for my wife (who is a high school teacher), offering them for free on their websites.

They are leaders and provide funding to try out new technologies and formats and produce content that may not be commercially justified, but that businesses and commercial formats often take advantage of later. The seed money the federal government provides for the important work CPB does helps to generate matching funds from other sources. It's not just 15% of the budget that will disappear - it is all the money that that initial money generates as well. Public media will be severely hurt, which in turn will hurt the level of public awareness, educational resources and commercial media that depend on CPB to develop programming, spur innovation and forge technological progress.

CPB sponsored media and programming are also helpful to our civic education. People who do watch PBS or listen to NPR are better informed about world and national events than people who do not. Neither is it just for hippies - listener demographics for NPR are about 1/3 liberal, 1/3 conservative and 1/3 independent.

News        Average rate per
Source      misperception
Fox         45%
CBS         36
CNN         31
ABC         30
NBC         30
Print media 25
NPR/PBS     11

The $400 million annual appropriation that our government provides CPB is one of the best returns on investment that we make, benefiting the people who see and hear the programming, those who the receive the grants, and the companies that follow in their footsteps and make money without having to foot the initial bills of research and experimentation. Cutting that money because you are depending on some stereotyped notion of CPB and it's consumers being snooty or arrogant is both ignorant and incredibly short sighted.

That's related to the argument that didn't seem to catch fire when it was floated years ago: that PBS television properties are quite well marketed as toys and such -- does anyone sane believe that if PBS were either privatized or simply ended, that Big Bird and Elmo, for example, would go away?