The Nonprofit Road

Think Tank "Journalism"

2011-09-16T09:31:00.005-04:00

I admire Rob Bluey's determination and initiative. He's a conservative blogger at the conservative Heritage Foundation, and he seems to be intent on revolutionizing or at least reinvigorating journalism at a time when so many of of legacy media have become more preoccupied with the bottom line than the public good.

Yesterday, Bluey popped up with another in a series of posts on of discipline he calls "thinktank journalism."

Bluey's case for think tanks getting into the journalism business seems to be that that they cover "stories that are often ignored by other media outlets." And according to Bluey, that means think thanks are "re-shaping" journalism.

If only it were that easy. Bluey's plug for "thinktank journalism" seems geared more toward crafting a new pitch to entice Heritage's donors than developing the kind of intellectual rigor that Heritage is known for.

My issue with Bluey and those he praises in his posts is twofold.

1) What they are producing is investigative, but it certainly isn't journalism. That's not to say it isn't factual -- it just isn't put to the same kind of contextual stress-testing as real journalism.

2) More importantly, many of the conservative-leaning "watchdog" sites commit the sin that journalists hold in greatest contempt -- hypocrisy. They demand transparency of politicians, government and people who receive government benefits, yet they hide the sources of their funding.

Worse yet, they encourage readers to donate anonymously, encourage them to take charitable tax deductions and then pretend they they don't receive government support for their work. Those deductions are often referred to as "tax expenditures," and conservatives have been villfying them for years.

Bluey and Heritage, to their credit, are open about their point of view. Heritage's mission "is to formulate and promote conservative public policies based on the principles of free enterprise, limited government, individual freedom, traditional American values, and a strong national defense." Bluey's very job was conceived as a part of that mission, and that may be important work. But it's certainly not the mission of journalism.

To be clear, I'm not arguing here that Heritage -- or any other think tank of any persuasion, for that matter -- should not be digging around government programs and politicians. They can be great, vital sources of information -- and fodder for real journalism. In my days as a Capitol Hill reporter for a daily newspaper, I spent a lot of time in the auditorium at Heritage because I got great material from great thinkers.

But neither Bluey nor Heritage nor and other "think tank journalist" should pretend that what they're posting is real journalism. It's not, and it never will be.

ProPublica Joins INN

2011-08-31T21:49:00.004-04:00

A long time ago, the poet John Donne wrote that "No man is an island." The same could be said today of nonprofit news organizations, and here's our newest proof point: ProPublica has joined Investigative News Network, according to a release from the two organizations yesterday.

This move benefits both parties greatly. For INN, it means the addition of a successful, innovative and high-profile member. But in the long run, it does a lot more for ProPublica: It may well ensure the organization's survival.

Founded in 2007, ProPublica was among the first wave of nonprofits news organizations that was formed in response to the crumbling of the newspaper model and its diminishing capacity to support public service journalism. Arguably, it has been the most successful as a journalistic enterprise, having won two Pulitzer Prizes. And it came out of the gate as one of the best funded, thanks to an initial $10 million-per-year commitment from the Sandler Foundation. ProPublica also had the advantage of being a first mover.

But as dozens of other nonprofit news organizations launched, ProPublica began looking like something of an outlier, at least in terms of its business model. It produced world-class journalism, but it struggled with how to diversify its revenue base. For a time, it seemed that ProPublica's idea of revenue diversification was to gain support from a half-dozen foundations instead of one.

Meanwhile, dozens of smaller and lower-profile organizations were working to crack the code of sustainability. None has found the silver bullet yet. But that's the whole point of INN: The network's founding members realized early (2009) on that they would be stronger together than apart.

Today, it's clear that those who aren't on board will be doomed to a zero-sum competition for resources, and they are more likely to repeat mistakes that others have made before. That's not good for anybody -- especially the foundations that want to see measurable results and could cut off funding in two or three years if they don't see any.

ProPublica's move makes Donne's directive all the more apt for nonprofit news organizations: "Never send to know for whom the bell tolls; it tolls for thee."

Pew Study's Lack Of Comparison

2011-07-27T19:10:00.006-04:00

While I was on vacation a couple of weeks ago, the Pew Project for Excellence in Journalism released a groundbreaking new study that attempted to address the most pervasive criticism of nonprofit news organizations -- that their journalism is biased by their business model.

In "Non-Profit News: Assessing a New Landscape in Journalism," Pew asks the right questions -- "Are these sites delivering, as they generally purport to be, independent and disinterested news reporting? Or are some of them more political and ideological in their reporting?" -- and it succeeds in providing us with the first methodical assessment of nonprofits that have launched since 2005. Among other things, it finds that transparency of mission, size of staff and multiplicity of funders are associated with balanced reporting.

But where the study falls short is in benchmarking its findings. It looks at a total of 46 sites that purport to produce objective state and/or national news, and it includes seven sites that operate as for-profit business. It then applies a content analysis to determine which harbor some kind of ideological bias, and it concludes that 44 percent of the sites in its universe are "ideological."

That conclusion led to this unfortunate headline in the Chronicle of Philanthropy: "Ideology Drives Many Nonprofit News Sites, Study Says." What constitutes "many"? We don't know because Pew didn't compare nonprofits to a broader universe of state and national media.

Take a look around, and it's not hard to discern the ideological biases that guide many of our media outlets. Plenty of for-profit outlets skew their reporting to capture the loyalties of a particular slice of the market and deliver it to advertisers. Fox News is the obvious example of how to make a profit by introducing ideological bias into news reporting. But it happens in less obvious ways as well. Online newsletters often reflect the biases of the industries and professions they serve, for example.

I don't dispute the method Pew used to assess ideology, but I think the analysis would have benefited from having a more rigorous comparison with a broader control group. As a result, we are left to ask: Ideological? Comapred to what?

Here's one piece of the analysis that I thought worth cheering. Pew found that news organizations with high levels of transparency and diversity of revenue sources were most balanced in their reporting. From the report:

Sites that offered a mixed or balanced political perspective, on the other hand, tended to have multiple funders, more revenue streams, more transparency and more content with a deeper bench of reporters. The six most transparent sites studied, for instance, were among the most balanced in the news they produced.

That conclusion confirms what a lot of people in the nonprofit sector have assumed for years, and it lends additional credibility to many of the organizations that have worked hardest to play by the rules of good journalism.

Welcome Aboard, Sandy

2011-06-07T16:06:00.005-04:00

Last week, Sandy Rowe, the editor who hired me at The Oregonian back in 1994, published a new paper at the Shorenstein Center about collaborations to support watchdog reporting in an age of limited newsroom resources.

Sandy's bottom-line take in "Partners of Necessity: The Case for Collaboration in Local Investigative Reporting" is that the crumbling business models that have underwritten the cost of watchdog/accountability/investigative reporting -- primarily newspapers – will continue to crumble and that "no new business model is within reach."

Then, in the next paragraph she writes:

Growing evidence suggests that collaborations and partnerships between new and established news organizations, universities and foundations may be the overlooked key for investigative journalism to thrive at the local and state levels. These partnerships, variously and often loosely organized, can share responsibility for content creation, generate wider distribution of stories and spread the substantial cost of accountability journalism.

What's this? Sounds like a business model. And if it sounds like a familiar one, it should.

This model -- let's call it the collaboration model -- has been around about as long as modern daily journalism. Back in 1846, a handful of newspapers in New York City pooled their resources to pay for news couriers from the Mexican-American War. That collaboration worked quite well, and today it is the nonprofit news organization known as the Associated Press.

With her paper, Sandy does a fantastic job of describing the emerging landscape of newsgathering collaborations at the national and local level. But she approaches the topic -- understandably -- from the point of view of a newsroom executive, not a publisher. And in doing so, she sells short the potential of the very business model she has documented.

Today, smaller scale nonprofit models are being replicated in communities across the nation -- sometimes formally, sometimes informally -- among traditional news outlets, startup newsrooms and universities. Why? Because nonprofits are a highly adaptable business model when traditional models and markets fail.

Yes, as Sandy notes, many of the startups that supply original investigative content to these collaborations are highly dependent on foundations, and they probably will be for a while. And yes, many will fail because their leadership comes from the old school of journalism, which shunned the notion of an entrepreneurial newsroom.

But "give it away" is more than what Sandy calls a "new value" of investigative journalism. In today's news online news ecosystem, it's also a hard fact of economic life, and with all respect to the New York Times’ effort to erect an online pay wall, there’s no for-profit model that can change its impact. For better or worse, as Texas Tribune founder John Thornton ably argued a couple of years ago, the potential for infinite replication of a news story on the Internet drives its production cost toward zero. So if you’re wondering why there’s not as much great investigative journalism coming out of for-profit enterprises as there used to be, the reason is simple: There’s no money in it. The only way to get it in the quantities we need is to have nonprofits do the work that that our old models used to do – without the profit imperative.

While Sandy cites the successes of nonprofit newsrooms from ProPublica to the Rocky Mountain Investigative News Network, she overlooks how rapidly the model is evolving -- and the success that some are having in weaning themselves from the cycle of grantmaking. Recently, Texas Tribune disclosed that only 51 percent of its revenues come from philanthropy. That bears repeating: 51 percent. Just three years ago, getting under 80 percent would have been regarded as something of a 4-minute-mile mark, deemed impossible to break. But it has happened.

And it won’t stop there. New institutions – particularly Investigative News Network, the two-year-old umbrella organization for nonprofit news organizations – are looking for ways to bring collaboration to scale. Will they find a silver bullet this year or next? Probably not. But by sharing experience and expertise, they’re going to get a lot closer a lot faster than we might surmise from our observations to date. While some well-known startups are girding for a fight with their brethren over foundation funding, the savvy ones are getting on board the network bandwagon.

A parting thought: It’s easy to forget how much progress has been made so quickly. But I am reminded and highly encouraged by what I see behind Sandy’s paper: Here we have one of journalism’s leading lights wrapping her mind around a model that, after her Shorenstein stint, I hope she will embrace by applying herself to a leadership position that might not have existed two or three years ago. I think she could accomplish things that she never imagined.

At the very beginning of her paper, Sandy recounts the blow she felt when one of her managing editors and her investigative editor left The Oregonian in 2008 to join ProPublica. That anecdote made me flash back a couple of years earlier, to 2006, when after a great deal of research, I sent Sandy an email from my seat in the D.C. bureau proposing that The Oregonian’s parent, Newhouse newspapers, create a nonprofit to do investigative journalism at the national level. Her reply at the time was a courteous, one-line dismissal saying in essence that she was too busy to look at the proposal and would send it to her next-in-command in the newsroom. Now I have the kind of response I had been hoping for, and I’m glad to see it.

Welcome aboard, Sandy.

Test For Nonprofit Newsrooms

2011-05-25T16:06:00.007-04:00

I've talked a lot in this space about standards and credibility -- and what nonprofit news organizations can or should do to prove they've got what it takes. Along the way, I've looked for various proxies for a Good Housekeeping Seal of approval. The last place (or one of the last) I ever thought I'd find a decent one was at Comcast subsidiary NBC Universal. But there it was, in the list of criteria that NBC Universal is seeking in the nonprofit news organizations that its 10 local affiliates will consider partnering with.

The list:

•Robust local news gathering capabilities
•A track record of objectivity and excellence in journalism
•Strong journalistic qualifications
•Strong organizational management
•Strong financial resources capable of sustaining a multi-year relationship
•The ability to report on diverse stories and provide diverse viewpoints
•Diversity of your organization’s leadership and staff and its ties to the community it serves
•The ability to work collegially in a cooperative relationship

I think it's great that somebody at NBC Universal (at least that's who I presume drew up the list) took the time to think about what makes a reputable, reliable news organization. But here's the problem: I can't think of more than a handful of nonprofit news organizations across the country that meet all these criteria -- particularly the part about "strong financial resources."

In fairness, NBC Universal's San Diego affiliate, KSND, has been spoiled by its collaborative partnership with voiceofsandiego.org, which has been around for several years now and has dedicated patrons.

There are a few other nonprofit news organizations that fit the NBC Universal profile. But once you look beyond the nation's biggest cities to the places where traditional newsrooms have taken the biggest hit in recent years the list gets very short very fast. Which begs the question: What exactly is guiding NBC Universal's actions here? A desire to restore local news coverage and perfect a new business model for collaboration? Or, under Comcast's shadow, make a minimal effort to meet terms of the FCC's approval of the merger?

NBC Universal says: "The purpose of these arrangements is to work cooperatively in the development and presentation of locally focused news and information on multiple platforms and to enhance diversity of viewpoints and programming in the selected markets."

Fine. But the application itself reads as though it came from an executive in the marketing department. Check out Section VI, Question 1: "Describe the composition of your target audience. Be as specific as possible and include demographic, geographic and psychographic profiles."

Psychographic profiles? Really?

The last question asks in part "how working with your organization would help us achieve the goals of expanding the availability of locally focused news and information."

Most of the nonprofit news organizations I'm familiar with -- mostly members of Investigative News Network -- are staffed by deeply dedicated journalists. But most are startups and have budgets less -- often far less -- than $300,000. For them, psychographic studies and other market research is a dream. Meanwhile, Comcast has revenues of $36 billion -- that's billion with a "B" -- and they want to know what nonprofits can do for them?

As part of its deal with the FCC, Comcast agreed that it would report on the progress of its nonprofit partnerships every six months for three years. I just hope somebody at the FCC is watching closely what comes of their handiwork.

Final Final Exam

2011-05-03T09:34:00.006-04:00

For the past four years, I have made my intellectual home at George Washington University's Trachtenberg School of Public Policy and Public Administration, pursuing a master's in nonprofit management. Today, I take my last exam, and on May 15 I take on a new title: alumnus.

The great thing about going back to school at my advanced age and with one master's under my belt, is that it really didn't matter to anyone except me what I did with my time at GW. Looking back, I think that perspective gave me license to pursue topics and questions that I otherwise might have not. It allowed me to help frame questions that the emerging nonprofit sector of journalism must answer in order to survive. It also allowed me to have some fun.

The journey began seven years ago, when I read an article by my first graduate school adviser, Philip Meyer, a man who has been 20 years ahead of his time for half a century. In "Saving Journalism," Phil made a compelling case that we needed to develop new economic models to support what he called "socially responsible journalism" -- the investigative, enterprise and accountability journalism that we need as a society, but aren't always willing to support as individuals. One of the models he suggested was the nonprofit model.

I was hooked. The more I looked at nonprofits, the more I became convinced that the structure was closely aligned with the goals of journalism itself. Nonprofits are supposed to be accountable, transparent and focused on public service. Like newspapers, they might not always meet those goals. But what better place to start looking for a solution?

Today, I am more convinced than ever that journalism and nonprofit models that support it can be mutually reinforcing institutions -- much like the "virtuous cycle" that made it economically desirable for newspapers to support public service journalism.

Now excuse me while I do some last-minute cramming for that econ final.

Advocacy Organizations And Journalism

2011-04-26T15:51:00.008-04:00

One of the enduring criticisms of the nonprofit model in journalism is that nonprofit newsrooms are somehow suspect because they are funded in whole or in part by foundations or other organizations that have an advocacy function. This criticism is leveled most often by people who think that a financial transaction -- charging subscriptions or taking advertising -- somehow is the only way of cleansing journalism of bias or subterfuge.

So for those who adhere to the transaction-equals-legitimacy view, here's a real kick in the head: As it turns out, one of the finest for-profit newspapers in the country, The Washington Post, has been owned and operated for years by .... an advocacy organization.

That news comes to us courtesy of The Washington Post itself -- though you had to look hard to find it. It was deep inside a lengthy examination of the Post Co.'s Kaplan educational subsidiary that was published in the April 10 Sunday Business section.

The upshot of the story is that the Post Co. developed Kaplan into a cash cow that serendipitously helped the company through hard times in its core newspaper business. An important part of that work involved lobbying Congress to keep financial aid flowing through Title IV -- work that Post Co. Chairman Don Graham took on personally. From the article:

Graham has taken part in a fierce lobbying campaign by the for-profit education industry. He has visited key members of Congress, written an op-ed article for the Wall Street Journal and hired for The Post Co. high-powered lobbying firms including Akin Gump and Elmendorf Ryan, at a cost of $810,000 in 2010.

What's wrong with Graham's advocacy? Absolutely nothing. Because he did it the right way. Graham, like all good publishers, knows the value of maintaining an independent newsroom. So there was no pressure on the newsroom to write about the merits of the for-profit education business.

There are all kinds of pressures that can impact a newsroom and its coverage of any given topic. But the key is in how they are managed and, ultimately, deflected. In this regard, Graham did his part by staying out of his newsroom. Should the Post newsroom have taken initiative and done some digging on the for-profit education industry before Kaplan's recruiting practices were cited by regulators? Perhaps. But as so many newsrooms do, the Post took its cues from other societal watchdogs and, eventually executed well.

The question that remains: If the Post Co. can advocate for its interests before the government and maintain an award-winning, independent newsroom, why shouldn't other advocacy organizations be trusted to do the same? In the last analysis, every company, foundation, membership group or club advocates for something. The bottom line is, they have to earn that trust -- just as the Post has done.

A Milestone for Sustainability

2011-03-11T09:36:00.002-05:00

As reported by Paid Content today, Texas Tribune and Bay Citizen are splitting a $975,000 grant from the Knight Foundation to build "a free, open source publishing platform for other news organizations."

Great news. But the bigger news was buried a few sentences lower, where we learn that in 2010, philanthropy accounted for just 51 percent of TT's total revenues. That's an enormous leap forward in the race to sustainability. The rest came from membership (11 percent) corporate underwriting (17 percent) and events and specialty publications (21 percent).

Not that long ago, philanthropy was considered to be the primary source now and for the foreseeable future; revenue from publications and such were considered something of a bonus. No more.

There's no particular ratio of philanthropy that is considered mandatory for nonprofit news organizations. But there is widespread agreement that it has to go lower -- much lower -- in order for these organizations to last for the long haul.

Not every nonprofit news organization will move as far as fast as TT. But the effect for the sector as a whole is to move their Mendoza Line considerably farther north.

George Soros' Media Conspiracy

2011-02-28T20:39:00.005-05:00

Before the FCC approved Comcast's purchase of NBC Universal earlier this month, it strongly suggested to Comcast that as the new owner of 10 local NBC affiliates, it should invest in partnerships with nonprofit news organizations such as Voice of San Diego.

Comcast agreed. But now some conspiracy theorists have cooked up an even better story as to who was behind the deal. Turns out, it was none other than financier/philanthropist George Soros -- or so we are told by conservative blogger Andrew Breitbart.

He writes:

There’s just one problem with this: Voice of San Diego is a member of INN (Investigative News Network) which is funded by the Open Society Institute, the URL of which is “www.soros.org.” Yes, these “non-profit” journalism centers are funded by George Soros. ... People who have an economic interest in the fall of the American economic system ... are completely free to invest in newsrooms but they are not free to cut a deal with the FCC to have the inclusion of their group be a mandate for a merger.

If it sounds like some important context is missing from this statement, that's because it is. Nothing in the FCC order requires Comcast to partner with INN members or any other specific nonprofit news organization.

Breitbart also fails to mention that INN members get funding from a wide range of funders, including libertarian groups. The catch: Contrary to Breitbart's claim, the funders don't get to dictate what is covered and how. It's an important distinction, one that separates journalism from public relations. It's a simple concept, but apparently not one that Breitbart is intellectually capable of making.

Consider the source: Breitbart may be best known for doctoring a video of Shirley Sherrod, the former Georgia director for rural development for the U.S. Department of Agriculture, to make it appear that she was practicing reverse discrimination against white farmers. Earlier this month, Sherrod sued Breitbart for defamation.

Comcast's Christmas Present To Nonprofits

2011-01-05T10:10:00.008-05:00

It won't come as a surprise to many when, later this month, the Federal Communications Commission approves Comcast's plan to buy NBC Universal and the 10 local affiliates that the network owns.

But when the order comes out, look for a late Christmas present from Comcast: As first reported by The New York Times, the cable giant will lay out an ambitious plan to partner with nonprofit news organizations in at least five communities in which NBC owns stations (see the list below) for at least three years.

In a letter to the FCC sent two days before Christmas, Comcast spelled out some of the details of its plan. The partnerships, Comcast said, would include "story development, sharing of news footage and other content resources, financial support, in-kind contributions, shared use of technical facilities and personnel, on-air opportunities, promotional assistance, and cross-linking/embedding of websites."

Notably absent was any formal commitment of financial resources. But those kinds of specifics are likely to be forthcoming, assuming the FCC approves the deal. As Comcast spokeswoman Sena Fitzmaurice told me Tuesday evening: "Look for the order when it comes out. There will probably more detail in there."

The partnerships are an attempt to respond to the hollowing out of local TV newsrooms as the broadcast affiliate model continues to crumble. Comcast says it is committed to "hyperlocalism," which it defines as "local news, local public affairs, and other public interest programming," and to providing "free, over-the-air broadcast service" through the 10 NBC-owned affiliates.

The letter goes on to explain that the partnerships would be modeled after the working relationship between nonprofit voiceofsandiego.org and KNSD, the NBC-owned affiliate in San Diego. That partnership began as an informal sharing agreement in 2006 and since has grown to include some financial support from KNSD, as Scott Lewis, CEO of voiceofsandiego.org, explains in an interview with Investigative News Network.

Lewis is cautiously optimistic about what could develop. The arrangement with KNSD works so well, he said, because it is built on relationships and trust that have evolved over time. And he notes that while the model cannot be thrust on unwilling or uninterested parties, it certainly can be replicated by those who see its potential.

"By investing in it, if it worked, it could be a mutually beneficial innovation," Lewis told me in an email. "Public gets better more in-depth stories and fact checks on local news like the ones we help with. And NBC is able to make it at least pay for itself. And then groups like ours can have it as part of their portfolio of distributors for our content, which is then just one part of our revenue portfolio."

Indeed, there is precedent for cooperation beyond San Diego. Texas Tribune, for example, has cooperated with KHOU in Houston, lending out its reporters to discuss public affairs stories. And in the print arena, ProPublica has established relationships with newspapers such as The New York Times and The Washington Post. As Lewis notes, the key for nonprofits is getting partners to see the value in supporting the nonprofit as a community asset.

Whether Comcast will commit real resources to the partnerships remains to be seen, but indications are that it will -- if only because it must do so to win FCC approval of its NBC deal. Some data points:

* Through its Future of Media initiative, the FCC has expressed a strong interest in fostering new models for underwriting public-affairs journalism.
* Notably, it was the FCC -- not Comcast -- that contacted Lewis to learn about the relationship with KNSD.
* The Dec. 23 letter from Comcast lays out a detailed plan for reporting to the FCC every six months for three years on how well the partnerships are faring -- not the kind work most companies take on unless they have to.

Does it matter whether it took some nudging from the FCC for Comcast to recognize the gem of a partnership it will gain in San Diego? Or that as NBC's new owner, it can help build an innovative, private-sector response to the decline of local public affairs reporting? Not at all. A gift is a gift, regardless of any ulterior motive, and Comcast's offering could well become a model for others to emulate.

+++++++++++++++++++++++++++++++

NBC owned and operated stations:
KNBC Los Angeles
KNSD San Diego
KNTV San Jose
KXAS Fort Worth
WCAU Philadelphia
WMAQ Chicago
WNBC New York
WRC Washington DC
WTVJ Miami
WVIT Hartford-New Haven

A Modest Proposal For (De-)Funding NPR

2010-12-20T13:49:00.000-05:00

Shortly after the November midterm election, resurgent House Republicans proposed cutting funding to National Public Radio -- which incoming Speaker John Boehner called "a left-wing radio network" -- by forbidding local stations from using government funding to buy NPR programs.

It was a ham-fisted approach inspired by NPR's firing of commentator Juan Williams and it went down on Nov. by a vote of 239-171 with lame duck Democrats helping provide the big margin of defeat. No doubt, NPR will be a target again once the new Congress is sworn in. So how can NPR -- which in actuality gets the much of its funding through various forms of philanthropy and sponsorship -- make its case for government support?

Like Boehner, a lot of Republicans think NPR is biased against them, despite evidence to the contrary. But maybe the real problem is one of constituency. Maybe Republicans don't feel like they have much at stake in sustaining NPR.

If that's the case, maybe they're right.

NPR doesn't get funding directly from the federal government. Member stations receive grants from the Corporation for Public Broadcasting, the independent nonprofit that distributes federal money to public broadcasters, and that was the pressure point of the Republican proposal. Those stations pay fees to NPR for programming and technical services, which together account for about half of NPR's annual revenues.

Each grant is considered on its own merits. But when all those grants are added up by state, a clear pattern emerges: Some states get a lot less than others on a per-capita basis. And if you look at a list of the have-nots of the CPB grant system -- the 20 states that got less than $4 million apiece in 2009 -- the list includes 12 of the 22 states that John McCain won in the 2008 presidential election. In other words, the issue might be that Republican-leaning states don't have as much at stake. So if Republican members of Congress go after NPR, they are unlikely to suffer political consequences.

So here's a modest proposal for the incoming Republican House majority: With $478.8 million in grants in 2009, CPB represents less than a rounding error in the nation's $1 trillion-plus deficit, and any proposal to de-fund CPB is certain to be dead on arrival in the Democratic-controlled Senate. So why try to kill it? Instead, why not reallocate CPB money in a way that benefits Republicans and their districts?

It wouldn't be hard at all. House Republicans could devise a new formula that allocates CPB money to states according to the number of people who voted for McCain in 2008, a big Democratic year. Such a formula would go a long way to help places that arguably could use additional boost for local media. Alabama, for example, would get more than twice as with big funding increases include Mississippi, Oklahoma and South Carolina. And if they don't like the programming that NPR is sending them, they have the leverage of their increased grant money to demand change.

I'm not a big fan of government funding of journalism. But the fact of the matter is that government subsidies are everywhere -- from CPB grants to favorable mailing rates and tax deductions for individuals' grants to 501(c)3 organizations such as the Franklin Center. If Republicans really want to cut government funding of journalism, they have a lot more work to do than "executing" NPR, as GOP elder statesman Pat Buchanan suggests. Until then, they shouldn't kid themselves about what they would accomplish by blocking NPR's public revenue stream.

+++++++++++

Public Media "Have-Nots": The 20 states with the lowest CPB grant totals in 2009

Rhode Island $774,711
Wyoming $982,129 *
Maine $1,582,392
Montana $1,623,470 *
South Dakota $1,636,221 *
Vermont $1,693,422
West Virginia $2,192,000 *
Idaho $2,192,525 *
Mississippi $2,225,238 *
New Hampshire $2,227,215
Hawaii $2,522,417
Connecticut $2,834,282
Alabama $2,887,913 *
Arkansas $2,952,858 *
Oklahoma $3,146,341 *
Nevada $3,184,697
Kansas $3,356,566 *
North Dakota $3,386,257 *
South Carolina $3,513,303 *

* denotes state won by McCain in 2008

Source: Corporation for Public Broadcasting

Andy Alexander's Wake-Up Call

2010-12-05T19:40:00.003-05:00

Nonprofit news organizations got yet another wake-up call Sunday morning from Washington Post Ombudsman Andy Alexander.

In his regular column today about an environmental story produced by the Center for Public Integrity, he took Post editors to task for publishing the story without telling readers what CPI is and why the Post is publishing its work.

More than a dozen readers simply hadn't heard of CPI, Alexander wrote. But one reader he cited by name -- Douglas H. Green of Washington, D.C. -- took issue with CPI. Green said CPI "often gives a biased, anti-business view on environmental topics," according to Alexander.

What's troubling here is that although CPI has a 20-year track record of excellence, and although Alexander's own investigation found that the story had been thoroughly vetted by Post editors, the Post's failure to explain itself and CPI to readers opens it to accusations of bias from readers who have their own interests to protect.

As we learn from Alexander's column, Green is a lawyer who represents electric utilities on environmental issues. As it so happens, the story, entitled "Obama administration gives billions in stimulus money without environmental safeguards," names electric utilities that got stimulus money for job-creating projects while also being granted "exemptions from a basic form of environmental oversight."

Are these companies among Green's clients? Quite possibly. It might be that Green has some skin in the game and in fact is the party that harbors a biased view of the issue. We don't know because that information isn't disclosed, either.

But we do know that accusations of bias -- whether because of funder pressures or reporters' own political views -- remains one of the great, nagging criticisms of nonprofit news organizations. To protect themselves, and indeed, to remain viable news providers for the long haul, they and their publishing partners among legacy media need to do a better job of explaining how the model works and why it benefits readers.

RIP, New Mexico Independent

2010-11-19T10:07:00.002-05:00

On Wednesday, the New Mexico Independent ceased operations after its parent organization, the American Independent News Network, ran out of money to keep the online publication going. By all accounts, the Independent was aggressive in covering state government, and its presence will be missed.

But the lesson here is one of the importance of building a sustainable model -- and how hard that is to achieve. The Independent, which has eight sister publications still operating in states from Colorado to North Carolina, ran out of money in part because it had received grants from supporting foundations on a year-to-year basis, according to David Bennhehaum, president and CEO of the American Independent News Network.

Here's part of what he said to the New Mexico Business Weekly:

Bennehaum concedes one problem with the business model was that the creators of the network only secured one-year commitments from foundations for what was a multi-year project. Many of those commitments expired in the first quarter of 2009 — right after the financial meltdown in fall 2008. As a result, many funders were not in a position to recommit.

Ouch.

Could Bennehaum have anticipated the impact of a downturn in the economy? Maybe. Should he have insisted on multi-year commitments such as the rolling, three-year, $10 million-a-year commitment the Sandler Foundation has made to ProPublica? Again, maybe. But had he done so, he probably never would have gotten off the ground.

Nonprofits Among The ONA Finalists

2010-09-29T13:29:00.003-04:00

Congrats to the many nonprofits named among the finalists for the Online News Association's 2010 Online Journalism Awards. They cleared out all competitors in the general excellence, micro- and small-site categories, and placed one of three finalists in each of the medium- and large-site categories.

Here are the highlights:

General Excellence in Online Journalism, Micro Site
* California Watch and the Center for Investigative Reporting
* Gotham Gazette
* St. Louis Beacon

General Excellence in Online Journalism, Small Site
* ProPublica
* The Texas Tribune | texastribune.org
* voiceofsandiego.org

General Excellence in Online Journalism, Medium Site
* Mother Jones

General Excellence in Online Journalism, Large Site
* NPR: NPR.ORG

Gannett Foundation Award for Innovative Investigative Journalism, Small Site
* The Center for Public Integrity: Sexual Assault on Campus: A Frustrating Search for Justice
* ProPublica, the New Orleans Times-Picayune and Frontline: Law and Disorder
* voiceofsandiego.org: Out of Reach

Gannett Foundation Award for Innovative Investigative Journalism, Large Site
* NPR, ProPublica, Frontline: Brain Wars: How the Military is Failing the Wounded

Do-It-Yourself Nonprofit Journalism

2010-09-22T16:34:00.003-04:00

At last: A comprehensive tool kit for those interested in starting their own nonprofit news sites, courtesy of Brant Houston, Andy Hall and the Knight Citizen News Network.

The best thing about the tool kit may be the advice that comes with it -- things like taking time to assess whether you're really up for all the work and frustration that comes with launching a new enterprise. And some great tips, like finding another 501c3 to act as fiscal agent.

Brant and Andy clearly put a lot of time, energy and passion into this project. Kudos for a great job.

Government-free* Nonprofit Journalism

2010-09-01T11:33:00.027-04:00

Here's a test for nonprofit journalism and its stakeholders.

The following sentence comes from the "Contribute" page of a nonprofit journalism organization. What's wrong with it?

The (organization) neither accepts nor receives any government or taxpayer-financed grants and relies solely on the generous support of our donors.

The answer is ... nothing is wrong.

Ha! It was a trick question. The website belongs to organization that claims to help produce independent journalism and doesn't like the idea of government supporting its work. No problem.

But in the same breath, the organization informs its potential donors: "Your donation ... is tax deductible to the fullest extent of the law under Internal Revenue Service Code Section 501(c)(3)."

Now we have a problem.

The organization I am zinging here, the Franklin Center for Government and Public Integrity, says tax deductions aren't the same thing as government support. "Our generous contributors are not funding government support of journalism when they donate to the Franklin Center," Jason Stverak, the group's president wrote in an email. (Complete response below.)

Economists disagree.

Charitable deductions are known within the realm of economics as "tax expenditures," and according to Stanley Surrey, the former assistant Treasury secretary who coined the term, they're no different than direct government spending.

"Whatever their form, these departures from the normative tax structure represent government spending for favored activities or groups, effected through the tax system rather than through direct grants, loans, or other forms of government assistance," Surrey wrote in 1985 with co-author Paul McDaniel (emphasis, mine).

The Heritage Foundation offers a similar definition. It says in part: "The word 'expenditure' is used to highlight the similarity between the use of the tax code to provide advantages to a select group and the more traditional method of giving the group a slice of the federal budget."

Last month, I took WikiLeaks to task for promoting itself as a cutting-edge proponent of transparency in government while failing to disclose much of anything about its own funding and expenditures. My gripe, in a nutshell, was that WikiLeaks' adherence to a double standard undercuts not only its own credibility, but also that of the entire nonprofit sector in journalism.

Like WikiLeaks, the Franklin Center seeks to "advance the cause of transparency in government" while it also withholds information about its own finances. But it slides further down the slippery slope when it condemns the idea of government support for journalism and then makes that condemnation a central selling point in its case for philanthropy -- tax-deductible philanthropy, no less.

The Franklin Center isn't alone.

In Idaho, the Idaho Freedom Foundation, publisher of the nonprofit Idaho Reporter says this on its "Donate" page:

The Idaho Freedom Foundation relies solely on the generosity of individuals, foundations, and corporations that share its commitment to freedom. IFF does not accept any government funding. IFF is a tax-exempt organization under section 501c3 of the Internal Revenue Code. U.S. citizens will find their contributions to be tax-deductible to the extent allowable by law.

Some of the biggest names in the world of Washington think-tankdom commit the same offense.

They include the Progress and Freedom Foundation and the Heritage Foundation, both of which slammed the idea of government policy changes that could help support journalism as old business models crumble. Bottom line for both of these big-name foundations: Government support is bad -- except when it helps them stay afloat.

I'm not here to flog the Franklin Center or any of these other organizations for their ideology. I know from a decade of reporting on Capitol Hill that it's darned hard to maintain one's purity when money is involved. But those who count themselves among the nonprofit sector in journalism should walk their own talk. Any nonprofit organization that says it "relies solely on the generous support of our donors" while also promoting the charitable tax deduction available to its donors is issuing, at best, what the late Ron Ziegler might have called an inoperative statement.

The fact is, government subsidies for journalism are everywhere. In addition to the charitable tax deduction, they include mechanisms such as favorable postal rates and revenue-producing legal-notice requirements. Geoffrey Cowan and David Westphal of USC identified these government subsidies to journalism in a report earlier this year and argued that they were intended by our founding fathers to help support a vigorous press.

If you don't buy their argument, another proponent of the view that tax deductions constitute government support is view is Sen. Chuck Grassley. The Iowa Republican has been a tireless watchdog over the nonprofit sector, and the charitable tax deduction has been his entry point to investigations of hospitals, athletic booster clubs and other 501(c)(3)s.

So what to do in a world of ambiguity?

One solution would be for journalism nonprofits that eschew government support to refund the value of donors' tax deductions to the U.S. Treasury. The Franklin Center recently named an advisory council that includes well-known journalists such as Tucker Carlson, and maybe that body could take up the idea at their next meeting. But I'm not holding my breath for that to happen.

Here's another scenario: What if Grassley slipped in a legislative rider ending the charitable tax deduction for organizations involved in journalism? I bet the nonprofits mentioned above would howl like holy heck.

Perhaps the best thing would be for these organizations to acknowledge the reality of their dependence on government support and focus instead on journalism. They have a lot to contribute from their point of view, and that should be reason enough for readers to support them.

Until then, a little more transparency might be in order. If journalism nonprofits want to denounce government support while promoting tax deductions for donors, they should add an asterisk and a disclaimer to their solicitations for support.

It's the transparent thing to do.

++++++++++++++++++++++++++++++++++

I asked representatives of several journalism nonprofits whether they thought tax deductions constituted government support. Here is the full response I got from Jason Stverak of the Franklin Center.

Our generous contributors are not funding government support of journalism when they donate to the Franklin Center. In fact, the Franklin Center strongly believes that government intervention in media will create greater problems than the struggling newspaper business is currently enduring. If government intervenes in the news industry, journalists will no longer be able to report credibly on stories that matter to the people, but ultimately only on what matters to officials. Journalists may ignore scandal and corruption for fear of losing government funds. They could become political flacks and write to appease government instead of investigating it.

Drawing the conclusion that every donation to a non-profit 501 c3 is supporting the government in some way is incorrect. Tax deductions for gifts to houses of worship are not funding government support of religion and tax deductable (sic) donations to health care associations are not supporting government healthcare.

Googling Serendipity

2010-08-17T14:00:00.023-04:00

Twelve years ago, when I was reporting on the pending Microsoft antitrust case, I learned that what was really at stake wasn't immediately apparent in the legal briefs. It wasn't the browser market (remember Netscape?) or whether Windows should be able to run somebody else's word-processing program. Rather, it was how control was exercised over the places where we learned, created and engaged in critical thought.

One of the best thinkers on the topic was Ben Shneiderman, founding director of the Human-Computer Interaction Lab at the University of Maryland. He told me at the time that the critical question for Microsoft was not whether the company encouraged innovation -- it did -- but rather how financial pressures dictated which innovations it adopted and which it let wither. The Microsoft software suite, he noted, wasn't very accessible to people with learning disabilities or those with low incomes.

Fast-forward to 2010, and now we hear from Eric Schmidt, CEO of Google, another powerful technology company that controls the tools of creativity and expression. Schmidt recently talked to the Wall Street Journal about the potential for applying artificial intelligence to search, suggesting that the search engine of the future would figure out what we meant rather than find what we actually typed.

Schmidt seems to be pushing the idea that the future -- or, more accurately, each of our individual futures, interests and passions -- all can be plotted by algorithm from now until our dying day. The role of serendipity in our lives, he said, "can be calculated now. We can actually produce it electronically."

Really?

According to Webster's, serendipity is "the faculty or phenomenon of finding valuable or agreeable things not sought for." So if the essence of serendipity is chance or fortune or chaos, then by definition, anything that a search engine brings to you, even on spec, isn't serendipitous.

I don't know whether Schmidt's comments should be chalked up to blind ambition or to quant-nerd naivete. But it's troubling that Schmidt seems to discount the role that human nature plays in our everyday lives and, ultimately, in guiding our relationships with technology.

It might be that Schmidt's vision for the search engine of the future would serve us well in finding a new restaurant, movie or book. But if Google really wants to take the guesswork out of our lives, we should be asking the same question that Shneiderman put to Microsoft. How might financial pressures shape Google's "serendipity algorithm"? What content -- journalism and otherwise -- will it push our way that will shape our worldview? And, to Shneiderman's point, what limits does it impose?

I think it's safe to say that some good ideas don't lend themselves to being monetized online -- witness the rise of nonprofit startups in bringing us investigative, public affairs and explanatory journalism. How might they fare in Schmidt's world order?

I caught up with Shneiderman on Monday, and he agreed that this is one of the key questions that should be debated as we depend more and more on a "recommender system" in which companies like Google or Amazon use massive databases to anticipate our needs and wants. Public interest groups and other nonprofits that can't afford the right keywords could be most vulnerable in these systems, Shneiderman said. "How far down the list do the concerns of civic groups get pushed?" he asked.

It's fair to ask companies what considerations and factors might be weighted in their search formulas, Shneiderman said, but it isn't clear what level of transparency should be expected. "What is a reasonable a request to make without exposing their algorithm and their business practices?" he said.

I can't say either. But I do think there are some lessons that Google can take from the history that Microsoft has helped write.

One lesson is that what's good for the bottom line doesn't always jibe with what's best for consumers. A dozen years ago, the Netscape browser was regarded by many as more as more functional, but Microsoft saw it as a threat. So it bundled its own Explorer browser in its operating system and effectively priced Netscape out of existence.

Another lesson is that it isn't always possible to divine what people will want in the future based on a profile of what they (or people like them) have wanted it the past. Indeed, some of the most successful technology companies -- Google included -- have succeeded precisely because their vision for the future was radical, new and compelling. Microsoft once played that role to a monolithic IBM. But today, as Microsoft's market valuation has been eclipsed by that of Apple, it has become debatable whether Microsoft remains a consumer-driven company.

None of this should be interpreted as an anti-capitalistic rant. We're all better off for Google's search box, and it'll be interesting to see where Schmidt's vision takes the company.

Rather, it is a suggestion that even the most elaborate algorithms and high-touch e-marketing can't address every human need.

One of the best vacations I ever took was when I pulled out of my driveway in Raleigh in late August 1991 with no particular destination. Two days later, I found myself in North Dakota, discovering places I never would have appreciated based on my past interests or those of my friends and peers. The experience was so compelling to me precisely because it was serendipitous.

That trip has served as an important reminder to me ever since. When we don't know what we want, sometimes what we really need is to figure it out for ourselves.

NPR's Folkenflik on Texas Tribune

2010-08-16T15:31:00.003-04:00

NPR's David Folkenflik checked in on the progress of Texas Tribune in a profile that was aired on Weekend Edition yesterday.

The transcript doesn't quite capture the full experience -- including David's attempt to make the pop-up thought-bubble noise from the Trib's "Stump Interrupted" feature -- but it's a quicker read if you're in a hurry.

Some of the most interesting comments come from the editors of newspapers that now are partnering with Texas Tribune.

"We are picking up their stories and publishing them in the print newspaper because it gives us another well of political content," says Christopher Lopez of the El Paso Times.

Not long ago, no self-respecting newspaper editor would publish statehouse coverage from what would appear to be a competitor. Now, it's standard operating procedure.

My, how attitudes have changed.

ProPublica's 990: A Closer Look

2010-08-11T14:27:00.008-04:00

ProPublica posted its Form 990 report to the IRS on Monday and -- predictably -- the only Google-able coverage, which comes courtesy of New York Fishbowl, zeroes in on the salaries paid to Paul Steiger, the organization's president and editor in chief.

Yes, Steiger made a lot of money -- $571,687 -- but this isn't news: This is essentially the same salary that Steiger made and disclosed the year before. We can argue (again) over whether that's appropriate at a nonprofit -- he probably made lots more than that at the Wall Street Journal -- but it's hard to summon outrage at this late date.

Potentially more interesting was the schedule of contributors included in the filing. Among other things, it shows that the Sandler Foundation, controlled by ProPublica founders Herb and Marion Sandler, kicked in just $4.5 million last year -- far short of the $10 million they had offered to front.

But there's no change in the Sandlers' rolling $10 million-per-year commitment, GM Dick Tofel explained in an email.

"We just came into the year with a lot of cash, requiring less during the year," he wrote. "The Sandlers’ commitment is unchanged."

Other big donors include the Knight Foundation ($985,000), the MacArthur Foundation ($500,000) and board member Mary Graham ($208,000 worth of Washington Post Co. Class B stock).

There's still work to be done filling out ProPublica's donor pyramid, however.

After Graham, the next-biggest contribution came from the Kohlberg Foundation ($50,000), meaning that ProPublica's five biggest donors accounted for 98 percent of the organization's $6.36 million in total revenues.

Rick Edmonds: Newsweek as a Nonprofit

2010-08-09T16:47:00.004-04:00

A few days ago, Poynter's Rick Edmonds put up a thoughtful post on the possibility that Newsweek magazine might be converted to a nonprofit by its new owner, 91-year-old Sidney Harman.

He makes a compelling case. Among other things, he cites Harman's interest in Newsweek as a "national treasure" and Harman's close relationship with Walter Isaacson, CEO of the Aspen Institute and a former editor of Time.

My only nit to pick with Rick's argument is that he says "a nonprofit would provide continued subsidies and a commitment to a public service mission."

Public service mission, yes, but subsidies, no.

The state-of-the-art models are all predicated on the notion that foundation money is seed money to build a business that can be sustained by diversified sources of revenue, including events, memberships and other means of revenue generation. Subsidies aren't part of the plan for those thinking long-term.

WikiLeaks and a Failure of Transparency

2010-07-28T13:21:00.003-04:00

In all the kerfuffle this week around WikiLeaks and its disclosure of 91,000+ documents in its Afghan War Diary, it seems to me that a fundamental irony has been overlooked: A nonprofit journalism organization dedicated to imposing transparency on reluctant governments seems to think the rules don't apply at home.

Go to the WikiLeaks "about" page, and you can see what I mean. There's lots of rah-rah about rooting out corruption, freedom of the press and why the site is "so important." But there's not a peep about organizational governance, where their money comes from or where it goes.

In some cases, such opacity is by mistake. But in WikiLeaks' case, it is by design. Just two weeks before Afghan War Diary was released, Wired published an enterprising story on WikiLeaks' finances. The reporter, Kim Zetter, tracked down a vice president of the Berlin-based Wau Holland Foundation, which apparently handles most contributions to WikiLeaks. The story provided some idea as to the scale of the WikiLeaks budget -- the group needs about $200,000 a year for basic operations -- but the vice president offered only a promise of more disclosure next month. And from WikiLeaks founder Julian Assange? No comment.

I understand the need to protect whistleblowers and other sources. But when it comes to the group's finances, can't they cut out all the James Bond stuff? I don't need names and addresses of donors, but can't we have a little more transparency and accountability?

This isn't just a matter of idle curiosity. Love or hate WikiLeaks, the organization is doing more than its share to transform journalism. And it is doing so in dramatic fashion by fully unharnessing the power and creativity of the nonprofit model. As Ruth McCambridge noted in the Nonprofit Quarterly earlier this week, WikiLeaks "may be the soul of nonprofithood."

If that's the case, then the stakes involved in WikiLeaks' own willingness to operate with transparency are quite high.

Perhaps the most-repeated criticism of the nonprofit model in journalism is that an organization that relies in whole or in part on philanthropy will become beholden to its funders and will compromise its journalistic principles in order to ensure continued funding.

That's simply not the case -- not any more than the newsroom of a for-profit newspaper would have a self-imposed ban on negative stories about car dealers, department stores and other (remaining) major advertisers.

But the secrecy invites speculation. A July 3 post at Cryptome.org from a "WikiLeaks insider" alleges that the organization had become overly dependent on "keep alive donations" from left wing politicians in Iceland. It warns ominously: "Sooner or later it will be payback time. And payback will be in the form of political bias in WIKILEAKS output."

WikiLeaks does its part to fuel the speculation and undercut its credibility as well. In the Q&A on its "about" page, WikiLeaks raises this question: "Is WikiLeaks a CIA front?" I'll save you a click back and tell you that the answer is no. But do we really need this kind of drama from an organization that presents itself as an honest broker of information? Of course not. It only serves to undercut WikiLeaks' credibility.

If WikiLeaks really wants to promote transparency, it should start with its own operations.

Diane Rehm's Take

2010-07-27T16:22:00.004-04:00

In case you missed it, here's a link to Diane Rehm's recent radio show focusing on nonprofit journalism.

There are some familiar themes -- the astounding numbers of cuts in newsroom jobs, for example -- but Rehm also pushed hard to get her four guests to tout the benefits of the nonprofit model in addressing readers' distrust of news media.

The best answer came from Ken Doctor, who said the nonprofit model can help newsrooms pursue a "purer mission in a way" than traditional, for-profit media that always have had to balance news judgment against commercial considerations. The key, however, is transparency, Doctor said. "Readers can come to a better idea of exactly what they're reading," he said.

Another good answer came from Evan Smith of the Texas Tribune, who talked about the benefits of membership in generating engagement and support from the community the nonprofit serves.

Texas Tribune: "Lone Star Trailblazer"

2010-07-15T12:01:00.004-04:00

If you're not on the Texas Tribune e-mailing list, you might not have seen the profile that appears in the latest issue of Columbia Journalism Review. Here's the link, and enjoy the read, courtesy of Jake Batsell.

The profile is notable for a couple of reasons.

One is the level of detail it offers in examining the challenges that face the regional nonprofit news organizations that have cropped up around the country the past few years. Batsell spent a lot of time with the Tribune's staff and leadership, and it shows. He picks apart the business model as well as he does the journalism.

Another is that the piece asks (and to the extent possible, answers) the right questions in the right context. For example, Batsell, like the leadership of the Tribune, examines on how the enterprise can be sustained for the long haul. (Answer: They still don't know, but they're adding to the playbook every day.) Questions about whether the Tribune harbors the economic and/or political biases of its funders aren't any more relevant here than they would be in a profile of a newspaper or magazine, and they're treated in the context they deserve.

One piece of news (at least for me) that got buried: The Tribune is talking to the New York Times about providing content for a regional edition, much like it has with the Bay Citizen in California and the Chicago News Cooperative.

Steiger Speaks at All Things D

2010-06-29T15:17:00.003-04:00

In case you didn't have the $5,000 it cost to attend, the folks who put on the All Things Digital conference earlier this month have now posted some of the interviews and presentations, including this intriguing match-up of Paul Steiger of ProPublica and Richard Rosenblatt of Demand Media.

Warning: The full video goes on for 35 minutes. But if you've got the time to spare, it's a great exploration of the two contrasting business models -- Demand Media, driven with ruthless efficiency to produce only content that its algorithms predict will turn and profit, and nonprofit ProPublica, with its commitment to digging up stories that have broader impact on society.

It was nice to see Steiger, formerly the top editor of The Wall Street Journal, making the case for nonprofit journalism. It still doesn't seem to come naturally for him. But he does stand firm, despite some mild cajoling by moderator Kara Swisher to admit that he doesn't like having to accept philanthropy from millionaires.

Example: Asked if he was disheartened about the state of journalism, Steiger replied: "I'm really excited. We're in the first inning." And asked if he thought ProPublica's brand of public service journalism ever could be put into a profitable package, he replied: "Conceivably. But I can't think of what it is."

Making It Legit: Six Best Practices

2010-06-23T11:00:00.002-04:00

Back in February, I posted an essay in this space posing the question: What makes a nonprofit news organization legitimate? It’s a question that nonprofits and their critics have been wrestling with for some time now. And as more nonprofits launch into the news business, having a good answer – one better than Justice Potter Stewart’s “I know it when I see it” – will be crucial to their survival as credible providers of news.

In that post, I raised the idea that journalism nonprofits could use something like a Good Housekeeping seal – a test of relatively simple, objective standards to which compliance could be demonstrated plainly. Not that checking boxes provides an iron-clad guarantee of anything. But like the Good Housekeeping seal, it would indicate in a public way that the nonprofit in question is making every effort to produce reporting that qualifies as journalism. I kicked off the conversation by suggesting some indicators that could be considered indicators of legitimacy, and the feedback I got helped guide my research in the months that followed.

One of the best comments came from NYU’s Jay Rosen. He took issue with some of the journalistic standards I suggested such as whether a given nonprofit news organization adhered to the SPJ code of ethics or had been accepted into a major prize competition – “shortcuts,” he called them.

Then, in a follow-up email to me, Jay made a great suggestion: Try looking for steps that nonprofits can take if they want to be legitimate news providers (emphasis, Jay’s). That inspired me to look at nonprofits and journalism from a different perspective than I originally had planned.

This almost certainly was not Jay's intention, but the first thing I did was ditch the idea of trying to evaluate journalism or practices within the editorial process. For example, one newsroom’s advisory board may have teeth, while another's might not. There’s no way to tell from the outside what impact, if any, that kind of structure or any other have on the final product. Plus, most criticism of nonprofit journalism goes to the question of funding – not reporting, writing and editing. (You can read Jack Shafer’s September 2009 Slate piece here; it concludes that nonprofit journalism is compromised because it relies on “handouts” as its primary revenue source. And here is my rebuttal.) So I focused on the relationships between publishing entity and newsroom, and between publishing entity and readers.

That leap freed me to think about legitimacy in broader terms. I began looking beyond organizations that defined themselves as producers of journalism. All sorts of nonprofits are in the business of publishing as part of a mission to educate the public, and they also seek legitimacy as contributors to the broader news ecosystem. What might we learn from them?

I began my search for best practices by talking with some of the best minds in the business. Among those I consulted were Len Downie, Chuck Lewis, John Yemma of the Christian Science Monitor and Ron Schiller of NPR.

Then, armed with their wisdom, I looked closely at a dozen nonprofits that operate inside the news ecosystem – how they’re funded, what they disclose – and I kept coming back to two core questions: Does the nonprofit align its case for philanthropy with a journalistic mission, if not journalism itself? And does it make its funding and operations transparent to its stakeholders, including readers?

For each question, I found three common, easy-to-identify practices among nonprofits that aspired to be legitimate sources of news and information. I put them in the form of a checklist similar to the new IRS Form 990, which requires nonprofits to disclose whether they have certain governance practices in place.

Here are the best practices I found:

• Resource/mission alignment
o The case for philanthropy is linked to editorial independence and objectivity.
o The organization solicits small donations and/or other forms of grassroots support.
o The organization’s board of directors operates on a volunteer basis.

• Transparency of mission and operations
o The organization’s financial statements are posted online.
o The organization’s major donors are named online.
o The organization has clear accountability measures for its publications.

Which nonprofits incorporate all six practices? Just a few. ProPublica was one. No surprise there; the organization was built to operate under a microscope. Given its high profile, ambition and achievement, it should set the pace.

But some of the other nonprofits that went six-for-six might not be the first you’d guess.

Another that employed all six practices was Human Rights Watch. It doesn’t try to do journalism, but its advocacy depends on producing work of the same – or, arguably, higher – journalistic quality. I recently found this comment from HRW associate director Carroll Bogert that explains how journalism fits the group’s mission and its case for philanthropy:

We’re hiring award-winning journalists and winning webbys for repackaging the material that our researchers collect all over the world. And we have more than 70 researchers — more than the NYTimes and the WashPost have foreign correspondents, put together. You can call it journalism, or you can call it something else, but we’re helping to keep the American public informed. And we ain’t making a profit.

The third six-for-six nonprofit was the Council on Foreign Relations, publisher of Foreign Affairs magazine. The organization is supported by 4,300 members from across the ideological spectrum, Chuck Hagel to Angelina Jolie. The group and its publications are more oriented toward opinion and analysis, but the debate is based on facts that a highly educated and diverse membership can agree on. As NBC news anchor Brian Williams says on a promotional video: “It’s a reference shelf of everything going on in the world.”

And here was another surprise: The American Red Cross, which often provides some of the first video and on-the-ground reporting from scenes of humanitarian crises such as the January earthquake in Haiti. The group rated five of six, but it came very close to meeting all six criteria. The one piece missing: It does not link its case for philanthropy to objective journalism. In its mission statement, however, the Red Cross commits itself to neutrality and impartiality – two primary tenets of journalism – in all its dealings with the public.

I spoke with media relations director Jonathan Aiken, who said that the Red Cross makes no attempt to present its work as journalism. But it uses the tools of journalism to provide information as a public service – its video feeds are regularly featured by major TV networks around the world – and as a means of making itself accountable to donors.

“If I’m a donor, I want to know that the $25 I sent is going to the people I saw on TV,” he said. “Your transparency becomes a real issue, and your handcuffs get tighter as to what you can do with your money.”

The Red Cross has made a deliberate move toward greater organizational transparency following accusations of mismanagement in response to Hurricane Katrina in 2005, Aiken said. He believes that transparency can be a better indicator of legitimacy than advisory boards and mission statements of nonprofits that were organized specifically to produce journalism. “If I’m looking at an organization that is using journalistic tools, what I want to know, what is your point of view? What colors what I read or see or hear?” said Aiken, formerly of CNN.

Despite such examples, some leaders within the nonprofit sector of journalism rejected the idea that news organizations can be judged by any standards other than those of journalism.

Perhaps the most emphatic of those was Dick Tofel, general manager of ProPublica.

In an interview, Tofel said he believes it is very difficult for an advocacy organization to maintain a truly independent newsroom because of the conflicts that inevitably would emerge. “Eventually it would publish something that would say that the people who are pursuing the organizational mission are wrong,” he said.

He added:

The hard question is, can advocacy organizations do news? I think the answer is that it’s highly problematic because if you’re an advocacy organization, you have answered the question that news poses. ... An advocacy organization should be advocating. Where do we get the idea that Human Rights Watch should have to undertake some sort of objective concept of journalism? They shouldn’t. If they are misrepresenting themselves as completely objective, then I think it’s troubling.”

As part of my review, I also talked with Yemma, editor of the century-old Christian Science Monitor, which is wholly owned by the Church of Christ Scientist. Based on his experience operating under church ownership, Yemma comes to a different conclusion. He thinks that indeed it is possible for an advocacy organization to achieve legitimacy as a provider of news, but that the news enterprise eventually must pay its own freight.

The church’s founder, Mary Baker Eddy, saw the journalistic mission as central to the work of the church, Yemma said. Eddy had been burned badly by the yellow journalism of her day, and she wanted to position the Monitor as an alternative with greater legitimacy. Over the decades, the Monitor has been free to report on the operations of the church, Yemma said, and its legitimacy as a news source has been confirmed by its seven Pultizer Prizes But he conceded that Tofel’s concern might apply to other advocacy organizations.

“There are ways a newspaper could run at cross purposes to the interests of its sponsoring organization,” Yemma said. “For nonprofits now getting into the business, it may be that you need a very clear articulation of that role within the overall organization. If you’re a foundation and you decide that not enough information is being provided about the area you care about, then it might make sense. But you’ve got to think fairly deeply about why it’s important that you do this and what the purpose is. You’re not just keeping journalists employed or keep something going. It has to be part of your mission.”

Yemma also sees financial independence as crucial ingredient to legitimacy. Throughout its existence, the Monitor has operated with a sizable subsidy from the church. The Monitor is taking aggressive steps to bring its revenues in line with its costs – including moving its daily print publication online – and plans to trim the annual subsidy to $3.8 million from its current $10.7 million over the next three fiscal years.

“For journalistic operations within a nonprofit, the first order of business has to be to move toward sustainability,” Yemma said. “Whatever you do, you have to figure a way to justify your journalistic mission because someday there’s going to be somebody on the board who’s going to say, why do we have this? It’s clear then that your news operation is in jeopardy.”

So what's the takeaway from this exercise? Does this mean that the Red Cross does a better job of covering news than self-proclaimed news sites because it employs these six practices? No. But nonprofits all types are filling the void being left by traditional media – particularly in un-sexy places such as city halls and state capitals, and costly, far-flung places such as Baghdad and Port-au-Prince. Even if a nonprofit doesn't bring you the news directly from these places, chances are greater than ever that a nonprofit provided value as an expert source or first responder. Given traditional media’s dwindling capacity to vet its sources, nonprofits can provide leadership by taking on that role and providing an example to emulate.

For nonprofits seeking legitimacy, actions do matter as much as words. ProPublica, Human Rights Watch and the Council on Foreign Relations all stake their reputations – and their revenue sources – on providing accurate news and information. When they do so in a highly transparent way, they make the news ecosystem a safer place for readers.

Here are the 12 nonprofit publishers I studied, in no particular order. My goal in studying them was to recognize best practices, not to criticize anybody for falling short on some test they didn’t know was being administered.

ProPublica
National Rifle Association
National Geographic Society
NAACP
Kaiser Family Foundation
Human Rights Watch
Council on Foreign Relations
Clean Skies Foundation
Church of Christ, Scientist
American Red Cross
American Civil Liberties Union
AARP

CPI's New Business Model

2010-06-21T09:08:00.004-04:00

People who read Howard Kurtz's Media Notes column this morning may have missed it, but Kurtz documented a seminal moment in the evolution of the nonprofit model in journalism.

The column focuses on the Center for Public Integrity, founded 20 years ago by Chuck Lewis as an answer to what he saw as the heavy, if often indirect, influence of advertisers on news judgment. Lewis' solution: Get funding from foundations that could appreciate the social value of the center's investigative work.

Lewis deserves an enormous amount of credit for pioneering this model. But as Kurtz's column implies, the foundation-only model no longer is sufficient. The column documents the center's post-Lewis financial difficulties (he now runs a reporting workshop at American University) and the steps that new leadership is taking to develop new revenues sources such as selling e-books.

Deep, deep into the column, Kurtz articulates the big question facing the nonprofits that do journalism: Can they be self-sustaining when the foundation money runs out? He writes:

The larger issue is whether such not-for-profit outfits can become self-sustaining, or will forever be dependent on foundations and wealthy donors. If those checks stop coming, these operations could be crippled.

News From INN

2010-06-11T09:48:00.002-04:00

The Investigative News Network, the nonprofit support group formed last year at the Rockefeller Foundation's Pocantico conference center in New York, has been busy in recent weeks adding members, and it announced yesterday that it has hired its first CEO.

The group, which now counts 32 members, announced in April that it had added four new members: The Austin Bulldog, The San Francisco Public Press, FairWarning and Maine Center for Public Interest Reporting.

And it announced earlier this week that it had added eight more: the Common Language Project, The Lens, The Iowa Center for Public Affairs Journalism, The Philadelphia Public School Notebook, Spot.Us, Youth Today, The New Haven Independent, and the Florida Center for Investigative Reporting.

INN's new CEO is Kevin Davis. Here's a link to the release from INN.

Bay Citizen-NYT Partnership

2010-06-02T15:37:00.002-04:00

The New York Times issued a press release today saying that, as expected, it will launch its partnership with the nonprofit Bay Citizen to begin providing content for the Times' new Bay Area section.

Okay, So Google Isn't Evil

2010-05-12T10:52:00.003-04:00

I just spent 20 minutes reading James Fallows' lengthy piece on Google's efforts to save the news business, and I can buy his argument that Google isn't evil, it's just misunderstood.

But after all those words, I still don't see a lot new coming out of Eric Schmidt & Co. Here's the closest to a solution that Schmidt offers to Fallows:

"In the future model, you’ll have subscriptions to information sources that will have advertisements embedded in them, like a newspaper. You’ll just leave out the print part. I am quite sure that this will happen."

Is this not the same argument that we've been hearing for nearly a decade?

I've concluded that Google's argument boils down to three elements:

* Online ads are getting better, more targeted and more readable
* News sites can do a better job of selling their space (using Google technology, natch)
* Trust us

The one encouraging thing that I gleaned from Fallows' piece is that Google indeed does recognize that its search engine is only as good as the content it delivers. And it's fair to say that the burden of saving the news business shouldn't fall to Google alone. But if Google really wants to help, it needs to think about some business models besides its own.

Which brings me back to the point of this post: When it comes to filling the void of public-service journalism, the nonprofit model offers solutions that would pair neatly with Google's.

A Lesson for Advocacy Nonprofits

2010-04-28T15:45:00.001-04:00

When the nonprofit Christian Science Monitor announced in October 2008 that it would convert its daily printed report to a weekly edition and move its breaking news online, some people wondered whether the venerable newspaper would survive.

A year after the conversion was completed, it turns out that the new model is working pretty well, according to John Yemma, the Monitor’s editor.

The Monitor has succeeded in moving 93 percent of its daily subscribers to weekly, and its new web-and-print format is attracting new subscribers, Yemma told me in a telephone conversation Friday.

More importantly, the Monitor is on a path to financial sustainability, he said. The paper retains the full support of its publisher, the Church of Christ Scientist in Boston. But it is working to wean itself from church subsidies over five years -- a time frame that would be unacceptably long in the for-profit sector. And although it is owned by a church, it retains its stature as a respected, mainstream news organization.

While the Monitor has a unique history that would be difficult, if not impossible, for new nonprofit news organizations to emulate, Yemma said he thinks the Monitor’s positive experience can speak to the role that nonprofits can play in the rapidly evolving news ecosystem – particularly nonprofits that were founded to pursue missions other than objective journalism.

Below is a summary Q-and-A of my conversation with Yemma, paraphrased and edited to provide clarity and to compensate for my poor typing skills.

Q: How does an advocacy organization – in this case, a church – create and preserve a newsroom that has true editorial independence?

A: The church’s founder, Mary Baker Eddy, saw the journalistic mission as central to the work of the church. It was it was seen as a direct thing that should be done. It wasn’t just, ‘let’s support journalism.’ She wanted clear, non-sensational journalism to counter the yellow journalism of the day. That might not be as clear to other nonprofits. There are ways a newspaper could run at cross purposes to the interests of its sponsoring organization. You have to negotiate that relationship.

Q: Over the years, the Monitor has won seven Pulitzer Prizes. But do you ever get questions about whether the paper adheres to the principles of editorial independence and objectivity?

A: We’ve been in the mainstream of journalism for so long, our practices align with those of almost every other journalistic organization of repute. We’ve reported on difficult issues that the Church of Christ Scientist has gone through, including lawsuits in different eras. It’s no different than what a newspaper such as the Boston Globe would do if it was named in a lawsuit.

Q: How does the Monitor do with issues of transparency? Do you disclose your finances?

A: We make public all of the finances of the church. When it comes to the Monitor, it’s always been made public because the church would like to spend less on the paper. Each May, the church publishes a full report. It’s not online only because the church in some cases is a little slow about adopting technology. But they’re certainly transparent about what the finances are.

Q: Do the directors and trustees of the church and the Monitor still see journalism as critical to the mission of the church?

A: Yes, because it was founded by Mary Baker Eddy. She wrote the deed of trust that created the church’s publishing society, which puts out the Monitor. Today, the questions are about what form its content should take. There are legitimate questions as to whether a daily, print newspaper sent by mail made any sense. When we made the jump to the web, we expected that there might be some concerns on the part of the members.

Q: What about the members? How do they view the change?

A: The church members I think have always supported the idea of the Monitor and understood the centrality to the mission of the church. Even if they had questions about the direction, they understood that we had to make a move in some direction. The current way was untenable. I don’t think anybody asked whether the mission should go on.

Q: Do you think that to succeed as a news provider, an advocacy has to link its case for philanthropy to objective reporting, no matter where it takes you?

A: I think you have to. For nonprofits now getting into the business, it may be that you need a very clear articulation of that role within the overall organization. If you’re a foundation and you decide that not enough information is being provided about the area you care about, then it might make sense. But you’ve got to think fairly deeply about why it’s important that you do this and what the purpose is. You’re not just keeping journalists employed or keep something going. It has to be part of your mission.

Q: In terms of editorial independence within an advocacy organization, what does the Monitor’s experience show?

A: There are two paths. You can build it in constitutionally, as the church did, and it becomes enshrined. Or you have to have a sustainable business model so that you’re not a long term burden to the organization.

Q: Do you think it’s okay for independent newsrooms to rely on subsidies from advocacy organizations?

A: As a journalist, it’s not good to have to go to with the begging bowl to your parent organization all the time. It’s a bad dynamic. For journalistic operations within nonprofit, the first order of business has to be to move toward sustainability. Whatever you do, you have to figure a way to justify your journalistic mission because someday there’s going to be somebody on the board who’s going to say, why do we have this? It’s clear then that your news operation is in jeopardy.

Q: What is the Monitor's current subsidy?

A: The subsidy was $12.6 million in the fiscal year we are now completing (FY10, which ends April 30, 2010). We project a subsidy of $10.7 million in the upcoming fiscal year (FY11, beginning May 1, 2010). ... Besides the subsidy, our revenue comes from subscriptions to the weekly and the e-mail-delivered Daily News Briefing, advertising in the weekly and on CSMonitor.com, syndicated sales, and an endowment that provides an annual $6.8 million.

Q: What is the plan for the Monitor to reduce its subsidy from the church?

A: Each year we are planning to reduce the direct subsidy from the church so that by the end of FY13 (April 30, 2013) it should stand at around $3.8 million. Beyond that, we intend further reductions, but those out years are notoriously hard to predict with any accuracy. We’ll undoubtedly be re-forecasting along the way (perhaps as soon as this summer) to reflect the real world we are in.

Seeking Sustainability

2010-04-26T16:37:00.002-04:00

Some of leading new nonprofit news organizations and their sponsors are meeting today at UT-Austin to swap ideas on how to move from the start-up phase to sustainability.

The Seeking Sustainability conference has a great home page here with tons of links and resources, and there's a mile-long Twitter feed at #nonprofitj. And here's a link to the Romenesko column with a list of participants.

Christian Science Monitor Thrives Online

2010-04-16T13:42:00.003-04:00

When the nonprofit Christian Science Monitor announced in October 2008 that it would convert its daily paper to a weekly and move the rest of its reporting online, a lot of people assumed the venerable newspaper was on its deathbed or awfully close to it.

Turns out, the model is working pretty well, according to a report in Media Daily News. According to the report, print subscriptions have increased, and the online site attracted 5 million unique visitors in March. It says:

From a total paid circulation of 40,000 when the weekly debuted on April 12, 2009, the subscription base has grown to 77,000 today.

The report doesn't get into revenue numbers, but I think this is a god example of how the nonprofit sector can be an excellent laboratory for new models in this topsy-turvy age.

The paper traditionally has received a subsidy from its owner, the Church of Christ Scientist, based in Boston. And because the church publishes the paper as part of its mission rather than a need to turn a profit, it can take risks that other media outlets cannot. Here's one that appears to be paying off. Now let's see if others try to copy it.

Steiger Sticks Up For Nonprofit Model

2010-04-12T16:23:00.002-04:00

After taking home a shared Pulitzer Prize for investigative reporting today, ProPublica editor-in-chief Paul Steiger told Joe Strupp that the award indicates that the nonprofit model works and has a future.

Here's what he told Joe:

To have a reporter get an award in investigative and another a finalist in Public Service, those are at the top of the list of categories for the kind of work we do. It suggests that our non-partisan, non-profit model can serve a role in this time of expanding change in the media.

I've criticized Steiger in the past for not talking about the merits of the nonprofit model, so I'm glad to see that this is part of his honoree stump speech.

John Thornton, Myth-Buster

2010-03-30T15:29:00.005-04:00

Those of us who work in the nonprofit sector in journalism have gotten used to what Texas Tribune founder John Thornton calls the "familiar refrains" of those who moan and groan about how the nonprofit model simply won't work because there's not enough foundation money, how nonprofits could never replace legacy media, blah, blah, blah, yada, yada, yada.

The latest installment comes from Alan Mutter. Why today? I'm not sure. But it's worth reading his post and then John's response. Unlike Alan, John has lived and breathed the nonprofit model, and their experiences (or lack thereof) are revealed clearly in what they write. Alan builds the nonprofit model into an easily felled straw man. But John sees it for what it is -- one way (of many) to fill the growing void of socially responsible journalism.

Len Downie's Nonprofit Network

2010-03-28T18:30:00.000-04:00

By any measure, former Washington Post executive editor Len Downie epitomized success in the traditional, subscription-and-advertising model of newspaper journalism: With a staff that once topped 900 and an annual budget of $100 million, his newsroom hauled in 25 Pulitzer Prizes over 17 years and wielded influence from Capitol Hill to the darkest recesses of the nation's capital.

Since stepping down from the Post's top newsroom job at age 66, Downie has taken on a professorship at Arizona State University. But behind the scenes, he also is lending his experience to help shape the practices and prospects for the burgeoning nonprofit sector in journalism.

Why? Simple, Downie says. The for-profit model alone no longer can support the kinds of investigative, explanatory and accountability journalism that society needs. As the for-profit sector shrinks, journalists and interested readers must explore new ways to underwrite their work.

"There are going to have to be many different kinds of economic models,” Downie said in an interview Wednesday afternoon at the Post's offices. "The future is a much more diverse ecosystem."

Downie has made himself an expert on the nonprofit model, and wrote about its possibiliies in his recent report, "The Reconstruction of American Journalism," with Michael Schudson.

Less known, perhaps, is that Downie casts a wide net as within the nonprofit sector of journalism. He's on the board of Investigative Reporters and Editors, which has incorporated panels on the nonprofit model in its conferences. He's also a board member at the Center for Investigative Reporting, which recently launched California Watch to cover money and politics at the state level. And he chairs the journalism advisory committee at Kaiser Health News, which has provided niche explanatory reporting to leading newspapers, including the Post.

Looking across the sector, Downie sees great potential -- and some big, unanswered questions.

On the upside, nonprofits are helping journalism move toward a more collaborative model, Downie said. In the old days, newspapers resisted ideas and assistance from outside. But in the new news ecosystem, collaboration is a way of life. “All of our ideas have been changed about that," he said.

Also a plus: Big foundations and the public at large are warming to the idea that news organizations are deserving of their support, just like the symphony or any other nonprofit that contributes to society's cultural assets. “There’s a question of whether there’s enough public realization," Downie said. "I think we’re heading to that direction. Awareness is growing steadily.”

But a lot of questions still must be sorted out, Downie said.

High on the list, he said, is the most basic of all: Where will the money come from? Like other nonprofits, nonprofit news organizations will have to find the right mix of foundation money, grassroots support, advertising, and perhaps additional government support, he said.

That leads to the other big question of sustainability: It's not clear that all the nonprofits that have launched in recent years will survive. “How many will succeed and for how long?” Downie wondered. A related question: How will the collaborative model will settle out, and where nonprofits will find productive niches?

Downie said he also has been watching nonprofits wrestle with the issue of credibility -- how to achieve it and how to keep it.

The answer begins with editorial independence and transparency about financial supporters, Downie said. But when it comes to painting a bright line between journalism and ideology, advocacy or spin, there are no magic formulas to assure readers -- just the experience of trial and error.

“It’s one of these things that’s proven by its exceptions," Downie said. "When there’s an exception, it’s a scandal.”

AOL's Foray Into Nonprofit Journalism

2010-03-24T13:30:00.004-04:00

Big, pathbreaking news from AOL. The company announced this afternoon that its Patch Media subsidiary is launching a nonprofit subsidiary, Patch.org, to provide hyperlocal coverage to underserved communities.

According to the announcement: "Patch.org will partner with community foundations and other organizations to launch Patch sites and bring objective local news and information to communities and neighborhoods around the world that lack adequate news media and online local information resources."

This is a significant development because by creating a nonprofit hyperlocal operation to match its for-profit cousin, AOL gives us proof of concept that nonprofits can complement for-profit media by delivering value that for-profits cannot. We've seen the dynamic at work in other cases -- but usually when a nonprofit hands over a story to an independent, for-profit partner that no longer can afford to do all the enterprise journalism that it would like.

AOL gets it. And that's refreshing.

Fair Warning: Here Comes FairWarning

2010-03-19T09:32:00.003-04:00

A couple of former Los Angeles Times staffers next week plan to launch a new, nonprofit news service called FairWarning that will focus on "safety and health issues facing consumers and workers, and related topics of government and corporate accountability," according to a statement released Thursday. The site will go live March 24.

The new organization will be led by Myron Levin with help from Joanna Lin and three graduate journalism students from UC-Berkeley and the University of Southern California. The organization also has an all-star board of directors, including:

* Margaret Engel, director of the Alicia Patterson Foundation and a former editor and reporter for The Washington Post
*Chuck Lewis, founder of the Center for Public Integrity and the Investigative Reporting Workshop at the American University School of Communication
*Vernon Loeb, deputy managing editor for news and multimedia at The Philadelphia Inquirer
*Bill Marimow, editor of The Philadelphia Inquirer and two-time Pulitzer Prize winner
*Henry Weinstein, a law professor at UC Irvine, former Los Angeles Times reporter and a founder of the Center for Investigative Reporting.

I asked Lewis what he found compelling about Levin's vision for FairWarning. Here's what he told me in an email:

Over the years, I had known and had great respect for Myron Levin's important work investigating the tobacco companies and other health and safety subjects. The idea that someone that talented suddenly had nowhere to do that kind of in-depth work was outrageous and unacceptable. Myron asked if I (as the first incubated "new models" project of the Investigative Reporting Workshop's iLab) would help him form a 501c3 nonprofit and I helped him get a small grant from the Public Welfare Foundation to get moving, and I am honored now to serve on his Board.

In the Great Recession, Myron has gone out and singlehandedly landed two other much larger grants, and important stories are springing forth. He's off to the races. This is an increasingly familiar story today -- veteran investigative reporter also becomes editor and publisher, as a necessary act of entrepreneurialism, all for the public good. It is thrilling and inspiring to behold.

In the statement, Levin said he founded FairWarning "as a new model for presenting essential news and information that is underreported or absent from traditional media."

“Even before news budgets went into free fall, few news organizations gave adequate attention to safety and health investigations, despite the potential to save readers from injury or death,” Levin said. “In today’s hollowed-out newsrooms, even fewer reporters can tackle these complex and time-intensive stories. We want to help fill the gap.”

What I Meant To Say ...

2010-03-12T09:53:00.002-05:00

We had a great panel Wednesday at the We Media conference on the rise of nonprofits as contributors to the news ecosystem. My fellow panelists for the session were Ellen Miller of the Sunlight Foundation, Andrew Sherry of the Center for American Progress, and Jonathan Aiken of the Red Cross.

We had lots of great questions and a rousing discussion. But that meant I didn't get to use my prepared remarks. So for those who might be interested, here they are:

Four years ago, I was a Washington correspondent for a major metro daily, working in the national bureau of a medium-sized newspaper chain. Today, my former bureau and my former job are gone.

I’ve been lucky. Now I work as a strategic analyst for AARP, arguably the nation’s biggest nonprofit news publisher. A big part of my job is to find new ways we can leverage the nonprofit model in journalism to create value for our members – and for society as a whole.

I got interested in the nonprofit model for journalism in 2004, when I read an essay by my graduate advisor at Chapel Hill, Phil Meyer, entitled “Saving Journalism.”
My first thought after reading Phil’s piece was, hey, great, somebody might actually want to give me money to do the kind of reporting I want to do.

So I decided to start my own nonprofit newsroom, and I set about contacting journalists and foundations who I thought might help me.

I got nowhere fast.

But in my failure, I learned a lot. For one thing, I realized that 99 percent of journalists had no idea how nonprofits worked.

Over the years, I have come to another important realization: Journalists who view the nonprofit model as I did then – as a way to solve their immediate problems – shortchange its possibilities.

While the nonprofit model has gained some cachet recently, nonprofit journalism is as old as the Associated Press, which began in 1846 as a cooperative of New York newspapers interested in defraying the cost of covering the Mexican-American War.

That history is important because it also speaks to future possibilities. Then as now, the nonprofit model supports creativity through partnerships and collaboration rather than competition and “not invented here” mentalities.

This aspect of the nonprofit model, I think, makes it particularly well suited to the online world and a news ecosystem where consumers expect information to be free of charge.

I’ve also come to the conclusion that journalism is the easy part.

The nonprofit model requires vigorous strategic planning and no small measure of entrepreneurial spirit – just like any business. And to succeed, nonprofits must show how their journalism can connect friends, neighborhoods, communities and, ultimately, a society.

That’s what the really good ones are doing. And if a nonprofit can reach that level, a member’s donation takes on a whole new meaning. It becomes an affirmation of values.

Until recently, nonprofits were anomalies in a largely for-profit ecosystem, despite some well-regarded successes – Mother Jones magazine, the Christian Science Monitor and Center for Public Integrity, to name a few.

But today, the nonprofit model is becoming just that – a model with basic structures that can be replicated and perfected in any variety of circumstances and communities. And the model is evolving rapidly as startup nonprofits experiment and create new revenue sources through events, thought-leadership conferences, corporate sponsorships, and, of course, advertising. Some are functioning as membership organizations, much like AARP.

There are signs that the sector’s creativity is paying off.

When we talked about a “virtuous cycle” in the old days, it was the notion that great journalism boosted circulation. That helped boost ad rates, which in turn made it possible for newspapers to hire more great journalists.

While that cycle now has turned into a death spiral of staff cuts and declining circulation, the nonprofit model offers us a new kind of virtuous cycle – one in which diversity of revenues appears to correlate with growing news budgets.
Are there flaws in the nonprofit model? Absolutely.

Perhaps the most frequent argument I hear is that nonprofit journalism somehow lacks credibility because it hasn’t withstood the discipline of the market.

To this criticism, I say that philanthropy indeed is a means to legitimacy - if it's done properly. Nonprofits measure success not by the revenues and profits they generate, but by yardsticks such as how many people read their work, educational value, and the impact it has on decision-makers. If they create social value, they will reap the financial rewards. If not, they’ll wither.

This is the lesson I’ve gleaned from my travels: Great journalism isn’t enough. What really counts are the relationships that the nonprofit develops with its readers. Journalism is only part of the nonprofit’s value proposition, and at the end of the day, it might not be the most important part.

What Makes It Legit?

2010-02-26T14:55:00.005-05:00

With many new news organizations launching as nonprofits and many nonprofits moving into the news business, one has to wonder: Exactly where does journalism end and something else -- call it spin, opinion or advocacy -- begin? Or to phrase the question as Chuck Lewis recently did for me, if a nonprofit says it's doing journalism, what makes it legit?

The line -- if you believe there ever was one -- is becoming increasingly blurred. As the traditional advertising-and-subscription model of newspapers continues to erode, other institutions -- including advocacy, membership and charitable nonprofits -- are leaping to fill the void. But it's not clear that some new entrants are playing by the rules of journalism and nonprofit accountability. Or more accurately, it's not clear that they want to.

In this uncertain environment, the question of legitimacy looms large, particularly for nonprofits. As beneficiaries of taxpayer support, nonprofits have a special duty to be absolutely transparent. If they want to call their work journalism, the material they publish must be good enough meet any test of professional standards that might reasonably be applied, from both the realms of journalism and of nonprofit management.

Trouble is, no widely accepted set of best practices or due diligence exists for journalism nonprofits. To separate journalism from what Dan Gillmor has dubbed "almost journalism," many in the business have borrowed from Justice Potter Stewart's standard: "I know it when I see it." Or at least they think they do.

This standard has worked most of the time. But it failed notoriously in December, when the Washington Post published a story by The Fiscal Times, a new, online news organization owned by The Fiscal Times Media Group LLC and backed by investment banker and former Commerce secretary Pete Peterson. Peterson is a long-time deficit hawk, and has helped fund the Concord Coalition, a nonprofit that is "dedicated to educating the public about the causes and consequences of federal budget deficitseradicating the federal deficit."

As recounted by Post ombudsman Andy Alexander, the article drew criticism from progressive critics of Peterson because it quoted the president of the Concord Coalition, but failed to mention that the group receives funding from Peterson's foundation. The article -- reporting that momentum was building for a plan to name a special bipartisan commission to address the nation's debt -- also fell short of the Post's standards because it cited data from a study supported by the foundation but again failed to note the foundation's backing, according to Alexander.

Compounding transparency issues, The Fiscal Times gives mixed signals about its corporate status.

In fact, The Fiscal Times is not a nonprofit. It has a ".org" landing page and invites readers to create a "Member ID." It also says on its about us page that it "is part of a new era of independently supported non-partisan journalism." But it is incorporated in Delaware as a limited liability company, or LLC, a for-profit structure most often used by sole proprietorships, partnerships or small businesses.

Jackie Leo, editor in chief of The Fiscal Times, told me in an email that the organization changed strategies shortly after launching. "When we started this project, we thought we would model it after ProPublica or some of the other non-profit news sites," she wrote. "But our lawyers pointed out that if we post opinion pieces (from our bloggers and columnists) about candidates running for office or bills pending in Congress, and if that opinion can be deemed as influencing the outcome of a vote, the IRS would consider it 'lobbying' and we would lose our 501c3 status. With that in mind, we decided to create the LLC."

Did the Post know all this before it agreed to publish The Fiscal Times' work? Judging from Alexander's column, the Post had no formal means of screening its reporting partners. Rather, it appears to have relied almost exclusively on institutional familiarity with the Fiscal Times' staff, which includes former Post reporter and editor Eric Pianin.

The controversy has subsided. But it has left a lasting impression in journalism circles, particularly in Washington, and nobody wants to repeat the Post's mistake. As Vivian Schiller, CEO of National Public Radio, told me in an interview, "my alarm bells go off" when she looks at the Fiscal Times' corporate structure, financial backing and reporting focus.

At NPR, Schiller added, editors employ a set of criteria to evaluate potential partners. Among them: nonprofit status, a well-regarded board of directors and top-notch journalists. But the process remains an informal one.

So what to do?

As I've talked over this problem with Lewis, Schiller, David Westphal and others who think about it a lot, I keep coming back to the idea that some standards are in order -- a Good Housekeeping seal of approval, if you will, for nonprofit journalism.

This task may be easier said than done.

To begin, there are some deceivingly simple threshold questions. For one, should the nonprofit sector take it upon itself to set standards for its journalism and business practices? If yes, then who should be on the drafting committee?

If not, then are journalism nonprofits willing to live with the current mishmash of definitions of journalism put forth by entities as diverse as the Senate Press Gallery, the Pulitzer Committee, and perhaps the IRS? And how about other stakeholders such as the Post, NPR and others that have come to rely on investigative and explanatory reporting from nonprofits? Following The Fiscal Times episode, will they overreact and overlook work by ambitious, high-quality news organizations?

It seems to me that the answers should come from the nonprofit sector of journalism, if for no other reason, than to minimize damage potential damage from bad actors that might yet emerge from within its ranks.

No list of criteria or standards can guarantee quality or take the place of professional responsibilty. But it is a place to start -- much like the new IRS Form 990, which was re-designed based on input from the nonprofit sector. So here are some suggested criteria that might help.

Nonprofit Governance:
* 501(c)3 or 501(c)4 status
* All-volunteer publisher board
* 990s clearly posted online
* Major donors named
* Case for philanthropy linked to editorial indpendence
* Clear accountability measures
* Clean accounting opinion

Journalistic Professionalism:
* Functionally independent newsroom
* Journalism advisory board or ombudsman
* Adherence to SPJ Code of Ethics
* Supportive institutional culture
* Submitted entry for professional prize (SPJ, IRE, etc.)
* Holder of federal or state press credential

Comments? I plan to spend the next few months researching this question in greater depth, and I welcome thoughtful input.

Also, for those planning to attend the We Media conference next month in Miami, this is one of the issues we plan to address during our panel on nonprofits in journalism, so please come ready to discuss.

When Nonprofits Attack

2010-02-21T20:46:00.003-05:00

The first item in Howard Kurtz's "Media Notes" column Monday is a chilling tale of how the Church of Scientology recently hired highly decorated investigative journalists to examine how its media nemesis, The St. Petersburg Times, has covered the church's various activities over the years.

I'm not so troubled that the church, a nonprofit with its own magazine, is interested in investigating the Times. After all, it's a free country, and everybody should be entitled to do their own opposition research if they want.

What's disturbing is that the church is trying to pass off the study as "journalism criticism" -- the label applied by Steve Weinberg, a former IRE executive whom Kurtz says was was paid $5,000 to edit the study. Weinberg told Kurtz that his contract calls for the study to be published in full, but only if the church chooses to make it public.

“(T)he contract says the church has the right to do nothing with it except put it in a drawer,” Weinberg told Kurtz.

And for now, it looks like that's where the study will stay.

Clearly, the church is more interested in its reputation than in supporting quality journalism. But the church's attack on the Times undermines journalism in several ways: It lures top journalists into compromising roles; it raises questions about their motives ("I can certainly use the money these days," Weinberg told Kurtz); it tramples any notion of transparency; it raises doubts about the professional integrity of the church's own magazine; and it clearly attempts to cast a chilling effect on the Times' future reporting on the church.

That's 0-for-5 by my count. Boo, hiss.

Tucson Sentinel Launches

2010-02-16T14:18:00.005-05:00

While we in Washington were getting buried under three feet of snow this month, I missed the launch of Tucson Sentinel, an online-only nonprofit that is attempting to fill the space left by the closing of the Tucson Citizen in March.

The new venture is led by Dylan Smith, the Citizen's former online editor. I'm no expert, but I thought the site was visually attractive and easy to navigate, despite some maiden-voyage glitches. (When I clicked the "about" button a few different times today, I got one of those awful "404 Not Found" pages.)

A quick look at the Sentinel shows how far the nonprofit startup model has evolved in just the past few years -- and how features once considered cutting edge are now must-haves. For instance, the Sentinel plans to build a business model based on contributions from local donors and foundations, but it also takes advertising as part of its quest for sustainability. And it is tapping into a growing network of nonprofit news organizations, including ProPublica and Kaiser Health News, to provide coverage of issues of national interest.

On the Sentinel's welcome page, Smith writes:

With a staff of professional reporters and editors, freelance writers and public contributors, TucsonSentinel.com acts as a honest broker of information, filling the need for a virtual roundtable where the community can discuss the issues of the day. ... Our goal is to build a sustainable nonprofit business model that delivers quality reporting in a competitive media environment.

Unlike other startups, Smith is working on spec -- there's nobody like a Warren Hellman, who put up $5 million of his own money to back the Bay Area News Project. In an email, Smith told me that for now, the Sentinel is operating with volunteer help from other former newspaper editors and reporters who lost their jobs.

"Rather than have donors commit to our promises of doing something, we figured we'd actually start out by doing it, on a small scale, to prove that we're a good social investment," Smith wrote.

"Today's budget," he adds, "is the 17 cents and the dusty coughdrop I have hanging out in my pocket."

Schiller: "A Concrete And Hopeful Message"

2010-01-28T14:33:00.014-05:00

Ron Schiller, the new senior vice president for development at National Public Radio, doesn't subscribe to the notion that the nation's news media are in a state of crisis. Is the landscape changing? Absolutely. But this is no time to wallow in doom and gloom, according to Schiller. It's an opportunity to take the case for nonprofit journalism to a broader audience of foundations and grant-making organizations with a "concrete and hopeful message" about what their philanthropy can achieve.

NPR has a long track record of success with big donors -- witness Joan Kroc's $200 million gift in 2003 -- but many of its major institutional donors give because public affairs journalism already is a particular area of interest, Schiller said in an interview Thursday. But with the rapid decline of traditional, for-profit media, more nonprofits, including foundations and advocacy organizations, are having trouble getting their messages out. As a result, he said, they may be more open to the idea of NPR as a "partner in philanthropy" that can address a growing and demonstrated social need.

"There is a great opportunity to go to many, many organizations with that kind of case," said Schiller, a former vice president at the University of Chicago who was named to his post in September. "We certainly have an opportunity to educate."

Schiller hopes the approach will yield more gifts in the five- to nine-figure range. He concedes the approach isn't novel; universities have been using it for decades as they take on issues such as urban education. But NPR's new direction also would align with a broader trend in the nonprofit sector in response to the decline of traditional media.

More and more nonprofits that once operated as expert sources for mainstream media have cut out the middleman and gone into the business of producing journalism. Last year, for instance, David Westphal documented the effort of Human Rights Watch. The New York-based nonprofit is "leveraging an already robust network of fact-gatherers around the world by adding a small unit that converts its academic-type research into consumer-friendly news reports," Westphal wrote. Likewise on the domestic front, the Kaiser Family Foundation, a longtime provider of high-quality healthcare data, last year launched Kaiser Health News as a response to a decline in mainstream reporting on healthcare policy.

Other nonprofits with less expertise or commitment to journalism might be equally interested in filling society's need for high-quality reporting, Schiller said. But the public radio community, including NPR, has not done a very good job of making what is known in the fundraising business as the case for philanthropy. To date, the appeal has been largely transactional, he said. It goes something like this: If you liked what you heard on Morning Edition, please send us a contribution.

The pitch is not without its successes. In 2008, NPR collected $57.7 million in grants, contributions and sponsorships, or about 34 percent of its total revenues, according to the organization's most recent Form 990 report. But going forward, Schiller said, it might sound more like: "How do we use this incredibly powerful news and cultural organization to serve the country more powerfully?"

Are the nation's major foundations ready to take on the task? Less than a year ago, Chuck Lewis and Bruce Sievers wrote an article in the Chronicle of Philanthropy called on foundations to pitch in. They wrote:

Philanthropy is in a unique position to take the initiative because it can move quickly and deliver significant resources to key players in the news media, while taking a hands-off stance toward content. Yet, with a few notable exceptions by some of the nation's biggest grant makers ... foundations have not become involved in this arena of public life.

Today, Schiller is optimistic that more grant-making organizations will be open to the idea of supporting journalism. What is needed is more education of potential donors and a message that makes the case compelling, Schiller said.

That might sound a lot like a traditional, university-style giving campaign, and Schiller doesn't discourage the idea that NPR might launch that kind of effort. Much of his time, he said, is occupied in strategic planning with his counterparts at NPR's 300 member stations to coordinate a national message while preserving their ability to meet local needs.

"We have a special time right now when the need for good information in the media is out there," Schiller said in an interview at NPR offices in Washington. "In every community now, this is on people's minds."

2009: Not Such A Bad Year

2010-01-25T14:37:00.004-05:00

It's annual report time, and our friends Joel Kramer at MinnPost and John Thornton at Texas Tribune each put out their year-in-review posts this afternoon. (Thornton, who launched in November, called it his 12-week report, but whatever.) There's a lot to consider beyond just numbers.

While each has had to focus on his own shop's finances in a tight economy, each also has done a service in showing what a path to sustainability looks like -- the hard work of building an advertising base, corporate sponsorships and grassroots support.

Just as importantly, each has explained his publication's progress in a way that funders and readers can understand. There's a lot of confusion and misunderstanding out there, but Joel and John show how the nonprofit model is well suited to foster the kind of financial stability and support for newsrooms that we once took for granted at newspapers.

Thornton, a venture capitalist, put it this way:

You may be thinking: "A business? I thought the Tribune was a non-profit." True enough. But we must behave like a business if we hope to achieve our mission of maximizing the public good we produce. ... We will continue to seek large contributions from wealthy families and foundations, but the right way to think of this is truly as equity capital rather than revenue. In that sense, we’re no different than a startup that my firm would fund. Such a venture seeks to raise enough equity capital to sustain it until its revenue and expense lines cross. The more we raise, the longer we have to establish a sustainable business model.

Kramer offered a similar view in his post:

(We) generated a substantial increase in our revenues, a truly impressive result in light of economic conditions:
● Revenue from advertising and sponsorship rose from $160,000 in 2008 to $217,000 in 2009.
● Revenue from individual donors and from MinnRoast rose from $356,000 to $458,000. (This excludes from the 2008 total the last payment on one of our 2007 founder gifts.)
These two revenue streams are the key to long-term sustainability. Based on these results, I am confident that we can fulfill our goal to be sustainable by 2012, relying on foundation grants only for special projects but not to keep the lights on.

In his book, Leading Quietly, Joseph Badaracco makes the case that leadership is made of "patient, unglamorous, everyday efforts." And leaders, he writes, "don’t spearhead ethical crusades. They move patiently, carefully, and incrementally. They do what is right -- for their organizations, for the people around them, and for themselves -- inconspicuously and without casualties."

This is the kind of leadership that Kramer and Thornton are showing.

What A Difference An Offer Makes

2010-01-22T10:16:00.005-05:00

The start-up Bay Area News Project announced its new leadership team yesterday, as reported by the New York Times and paidContent, and it's unfortunate that the most eye-catching bit of the news was CEO Lisa Frazier's $400,000 salary. Yes, that's a lot of money, and, like the news about Paul Steiger getting $570,000 to run ProPublica, it invites questions about what are appropriate salaries for a nonprofit.

But let's set those aside for now, and let's appreciate the news about the hiring of NewWest.net founder Jonathan Weber as editor-in-chief of BANP.

A year ago, Weber authored a thoughtful and well-argued, if withering, critique of the nonprofit model as a solution to the financial problems plaguing newspapers and journalism more generally.

Weber's essay, entitled "The Trouble with Nonprofit Journalism," dismisses the nonprofit model as an ill-suited to define what is newsworthy and unlikely to be sustainable. Here's a passage:

(W)hen I started NewWest.Net in 2005 I considered going the non-profit route, but decided against it for what I still think are good reasons. I had to raise investment capital, which was arduous and way, way more time-consuming than I anticipated, but with luck I won’t have to do it again. Even more importantly, we are held to the brutal discipline of the market, which is very unpleasant a lot of the time but I think is ultimately a healthy thing. For the core problem that non-profit journalism will never be able to solve properly is deciding what is worthy. In a business, the customers ultimately decide what is worthy, for better and for worse. Managers at good companies can think for the long term and the greater good - and in fact there is clearly a market for thoughtful journalism - but as the VCs like to say, eventually the dogs have to eat the dog food. It keeps you honest. In a non-profit, either the board or the employees decide what is worthy - and why them?

Think Weber included the essay when he sent his resume to BANP founder Warren Hellman?

Me, neither.

But this is not the place or time for told-you-so's or questions about how much Weber's being paid to run BANP. Rather, I take Weber's conversion as validation of the nonprofit model as a place "to keep the spirit and tradition of socially responsible journalism alive," as UNC Prof. Philip Meyer said in 2004.

In his own way, Weber said as much in the paidContent article when asked how a nonprofit differs from his work at NewWest:

In terms of profit versus non-profit, I’ve certainly been an advocate of the for-profit model. I do think there are for-profit models that work, but at the same time, the reality these days is that investment capital is not going into for-profit companies where the primary use of proceeds of that capital is to pay journalists. For whatever reasons, investors have not seen that as a big opportunity to date. There may be a few exceptions in narrow niches but certainly for general news there’s been very little investment of that type.

But I think there's more to it than where the capital is flowing.

Since Weber wrote his essay just a year ago, the nonprofit model in journalism has undergone a full generation of transformation and growth. It used to be that nonprofits were oddities and one-offs, however successful financially or journalistically. ProPublica was really the only grand experiment anybody could name. But now, there are any number of start-ups that are using nonprofit status and the IRS 501(c)3 tax designation as a tool to create new business models that can sustain socially responsible journalism. In addition to BANP, we now have examples in Texas Tribune and the Chicago News Cooperative. And some of the early, community-based experiments such as MinnPost and voiceofsandiego seem to have held their own through the downturn in the economy while finding new ways to attract readers and donors.

It is said that converts become evangelists. I'm looking forward to seeing what Weber will do at BANP -- and what role he will play within the nonprofit sector. As a co-founder of the now-defunct Industry Standard, Weber has a distinguished track record as an innovator, and I think he'll find his new environs will be a hospitable place for his creativity.

Welcome aboard, Jonathan.

The FCC's Future of Media Project

2010-01-21T13:28:00.003-05:00

Hot off the presses: The Federal Communications Commission today posted its notice for public comment for its "examination of the future of media and the information needs of communities in a digital age." It's an ambitious undertaking, to say the least.

The notice lists 42 questions exploring topics that range from the travails of the newspaper industry to what our kids are watching when their parents aren't around. One of the questions I liked best was No. 8:

Compared to earlier decades, are Americans more or less likely to seek and find more specialized media (i.e., that focused on a specific topic, appealing to a specific demographic group, or promoting a similar ideology or world view)? What are the positive and negative consequences of such patterns?

In my mind, this is the $64,000 question that gets at the role of mainstream media going forward. Will there be media sources that have some measure of credibility across diverse communities, like newspapers in the old days? Or more to the point, is there any role for mainstream media going forward?

Lower down, there's a group of questions -- Nos. 12 through 16 -- on business models and financial trends. This is where I wanted to see some recognition that the nonprofit sector is responding to societal needs with innovation and creativity that complement the for-profit sector and eventually may become part of it. But questions about the nonprofit model were scattered throughout the document and didn't seem particularly well informed. For instance, No. 25 asks in part:

What should be the role of non-profit media that are not noncommercial broadcast licensees (for instance, non-profit websites, news services, mobile applications, or reporting-oriented organizations)?

Likewise, No. 29 asks in part:

In general, how much journalism and other forms of information provision can be supported by private-sector non-profit sources?

That's a bit like asking how many Web pages can be created on the Internet. A better question might be, what is the case for philanthropy, and is it gaining traction with foundations and grassroots supporters? Put another way, do readers/listeners/viewers think of journalism as a socially beneficial endeavor that merits their support like a disease foundation or social service provider?

But the document does suggest that the FCC has some appreciation for what the sector has accomplished so far. It states:

(T)he Future of Media project starts with the assumption that many of the challenges encountered in today’s media environment will be addressed by the private for-profit and non-profit sectors, without government intervention. We will remain mindful of the Hippocratic Oath of physicians, “First, do no harm.”

Let's hope so.

A Cautionary Tale

2010-01-10T19:57:00.006-05:00

Enterprise reporting partnerships with online news organizations are in vogue at major newspapers these days, and arguably no paper has been more aggressive in pursuing them than the Washington Post. But in his ombudsman column Sunday, Andrew Alexander takes Post editors to task for a series of failures that plagued its most recent partnership, with a new organization calling itself the Fiscal Times.

The Fiscal Times is not a nonprofit, but it has a lot of the markings of one. It is backed by a wealthy philanthropist, investment banker and U.S. commerce secretary Peter G. Peterson; it is staffed by established journalists, including former Post political writer and editor Eric Pianin; and it claims to run an independent, nonpartisan, non ideological newsroom. The main difference is that the Fiscal Times is run by a privately held company controlled by Peterson and his son Michael.

So what went wrong?

On Dec. 31, the Post ran its first story from the Fiscal Times, a newsy report that support was building on Capitol Hill for a biprtisan commission to tackle the nation's chronic deficits and mounting debts. As it happens, this is Peterson's pet issue and the focus of the Peterson Foundation.

According to Alexander, problem No. 1 with the story was that it quoted the president of the Concord Coalition, but failed to mention that the group receives funding from the Peterson Foundation. It also cited data from a study supported by the foundation but again failed to note the foundation's backing, according to Alexander.

Alexander goes on to cite other problems with the story, including balance and timing. But the big foul-up in his book appear to be the transparency issues surrounding Peterson's support for issue advocacy, and I couldn't agree more.

Is is possible for a deeply opinionated philanthropist to keep his nose out of a newsroom of his own making? I do think it's possible. Look at ProPublica, funded almost entirely by Herb and Marion Sandler, who also launched the liberal-leaning Center for American Progress. But transparency is key to credibility -- and ultimately, to the viability of any news organization, for-profit or nonprofit.

What does transparency look like? Mostly, it resides with the intent of the publisher, and it might be expressed as a newsroom oversight board or other firewall structure that keeps newsrooms insulated from financial pressures. But to the outside world, it means disclosure of anything that might even hint of a conflict.

In this case, the Post fell down on the job, according to Alexander. But the Post has been around for a long time, and it certainly will recover. The Fiscal Times -- like so many of the new, nonprofit news organizations that have sprouted up in recent years -- has not developed a similar reservoir of credibility. The question is whether any governance structure, process or procedure can provide an adequate substitute.

The Case For Journalism Subisidies

2010-01-08T15:41:00.005-05:00

"How to Save Journalism," a new article by John Nichols and Robert McChesney, founders of Free Press, makes perhaps the best case I've seen for creating new government subsidies for journalism. Their argument, published in The Nation, essentially is that the federal government has been doling out subsidies in one form or another -- postal discounts, for example -- since the days of the Founding Fathers. They also do some math to show that those subsidies were relatively large back then. Here's an excerpt:

The need for them was rarely questioned, which is perhaps one reason they have been so easily overlooked. They were developed with the intention of expanding the quantity, quality and range of journalism--and they were astronomical by today's standards. If, for example, the United States had devoted the same percentage of its GDP to journalism subsidies in 2009 as it did in the 1840s, we calculate that the allocation would have been $30 billion. In contrast, the federal subsidy last year for all of public broadcasting, not just journalism, was around $400 million.

Nichols and McChesney also make the case that additional subsidies would not lead to government control or censorship of journalism. But how would they dole out that money? That's where their case gets too vague for my comfort. The most specific ideas they offer are that "spending on public and community broadcasting should increase dramatically" and that "also have AmeriCorps put thousands of young people to work, perhaps as journalists on start-up digital "publications" covering underserved communities nationwide."

I've tried to stay open to the idea of more government spending to help support journalism, especially during the epochal transition now underway in our media. But this still doesn't cut it for me. I spent enough time covering Capitol Hill to know that the budgeting and appropriation process for public media are anything but transparent, and I have yet to see a workable proposal to divorce funding from politics.

Nichols and McChesney do give a nod to the potential of the nonprofit sector. But while offering a well-researched historical perspective on government subsidies, they neglect to provide the same context for the capacity of the nonprofit sector to provide public goods in lieu of the government. Fact is, the sector barely existed in Revolutionary times; churches were the only true nonprofits of the day.

But since the 1980s, when President Reagan came to Washington promoting the idea of vouchers and other means to privatize federally funded services, the nonprofit sector has responded with creativity, and it has grown dramatically in number and purpose of organizations.

It could be argued that the tax deductibility of donations to 501(c)3 nonprofit corporations itself it is a government subsidy. But it is a subsidy that applies across all sectors and, I think, does not invite the same kind of political meddling as a subsidy earmarked specifically for journalism.

The Legacy Media Flu

2009-12-30T10:12:00.005-05:00

The AP's Andrew Vanacore has an easily digestible story about the problems about to befall nation's local TV stations -- and how they could spell the end of "free" TV.

Turns out, the nation's big four TV networks are pondering ways that they can cut local affiliates out of the revenue stream by selling their signal directly to cable TV providers. Vanacore writes:

Pay-TV providers are paying the networks only for the stations the networks own. That amounts to a little less than a third of the TV audience, which means local affiliates recoup two-thirds of the fees. If a network operated purely as a cable channel and cut the affiliates out, the network could get the fees for the entire pay-TV audience.

He goes on to say: "If forced to go independent, affiliates would have to air their own programming, including local news and syndicated shows." But I'm not so sure about the news part. Given a choice between paying the cost of producing local news and airing another segment of "Wheel of Fortune," I don't think there's any doubt that they'll do what they need to stay afloat.

The forces undermining the local broadcast model are different than those that are pummeling the newspaper advertising-and-subscription model; the relationships among networks, stations, cable companies and advertisers aren't as easily disrupted by the Internet. But the bottom line for local civic affairs coverage is pretty much the same: The local news that broadcasters have provided as a public service -- though arguably not in the same depth as newspapers -- is going to get cut back even more. Call it the legacy media flu -- there's no cure, just the hope to survive.

So what to do? In the world of words, nonprofits have emerged to help fill the void left by newspapers, and they have been particularly successful at the local and regional level, as reported earlier this month.

This is where I leave my comfort zone, as I have no professional experience in the broadcast arena. But it seems to me that there is a natural opportunity for nonprofits to help fill the void in broadcast as well by shouldering some of the cost of producing local TV news. At the same time, local stations would do well to seek out and nurture these relationships.

It's already happening at some local stations. On Dec. 18, KHOU in Houston aired a segment about members of Congress taking trips at the expense of interest groups. The report was based almost entirely on reporting by Andrew Kreighbaum of the Texas Tribune, a new nonprofit based in Austin. The only significant cost to KHOU (owned by Belo Corp., which also owns the Dallas Morning News) was the time it took to interview Kreighbaum and have its own reporter do a voice-over.

A Perception Issue

2009-12-20T18:52:00.003-05:00

Perhaps the most pervasive criticism of the nonprofit model in journalism is that it allows a wealthy person or people to control a media outlet, putting out bias and opinion under the guise of news. So when I see somebody address that red-herring complaint with reason and logic, I like to point it out.

In a Q&A in the current edition of Nonprofit Quarterly, Mark Jurkowitz of the Pew Project for Excellence in Journalism compares the nonprofit model with the traditional newspaper advertising-and-subscription model, he and concludes that the beef about influence is "a perception issue."

That is, the problem is not with the revenue source, but how a newsroom is governed within the larger organization that acts as publisher -- and the extent to which its independence is protected. He says:

In any given situation, you can establish procedures and standards for minimizing the risk of conflict. Newspapers have always set up firewalls separating the editorial product from the publisher.

And another thing -- Jurkowitz notes that all media are perceived as being biased, according to polls. So the problem is not so much the business model as it is the news industry's ability to persuade readers that it can report events or conduct investigations without bias. And as Alan Mutter suggests, in the online world, news organizations might generate more readership if they actively insert a point of view in their reports.

I agree with Mutter that the old newspaper model of objectivity won't translate online. But I do think there should be a set of standards for the conception, reporting and writing of anything that its authors deign to call journalism. "News" feeds through Twitter and Facebook are great fun, but ultimately, I think readers will gravitate to sources that have proved themselves trustworthy over time.

So if there is a call to action here, it goes to those who work for and support nonprofit news outlets. Collectively, they need to address not just the perception problem, but also to face down their own institutional biases. The latter will depend upon their willingness to build organizational structures and cultures that improve upon those that have come before.

A Study In Fundraising And Sustainability

2009-12-10T15:57:00.008-05:00

I’ve been studying journalism nonprofits one way or another for about five years now, and I confess that in all that time, I’ve looked at their business models really as being slightly different iterations of the same species. But now, I’m not so sure.

As part of my graduate studies in nonprofit management at George Washington University, this fall I took a closer look at the finances of a dozen journalism nonprofits, keeping in mind the most pressing question for many: How can they diversify revenues and achieve some level of sustainability?

I acknowledge up front that my method was not perfect – I’ll explain at the end – but I think I’ve discovered what may be two critical distinctions within the group I studied.

First, the six nonprofits that served geographically defined communities – whether they be cities, states or regions – generally did a better job of diversifying their revenue sources than did those that attempted to speak to a national audience.

Second, among these “regionals,” there appeared to be some correlation between bigger budgets and greater diversity in revenues sources. This pattern suggested to me that there is a happy dynamic at work here – a virtuous cycle in which diversity of revenue helps create institutional heft that in turn attracts additional philanthropy in the form of major individual gifts and foundation grants.

What are the diverse sources that these nonprofits are tapping? For lack of a better descriptor, I lumped them together under the heading of “transactional” revenues – advertising, subscriptions, memberships, royalties, event ticket sales, contract research, and anything else that didn’t go under the “direct public support” line on Form 990. Some of these sources are taxable, some are not, and the difference was not always clear. Different nonprofits treated similar revenues in different ways. But I digress.

If this trend holds true, I think it would portend a relatively bright future for the nonprofit model as a major contributor in places like city halls and state capitals where newspaper bureaus have been emptied out. These are the places where the disintegration of the newspaper business model is most obvious to readers – and where for-profit alternatives have a hard time realizing returns on investment. Here, the case for philanthropy is clear – and so is a nonprofit’s potential to supplement its revenues with advertising and other market-driven revenues streams as it scales up its operations.

The trend also suggests a cruel and ironic corollary: The journalism nonprofits that can demonstrate the least dependence on foundations and large gifts may be the most likely to succeed in winning them.

At the same time, studying the finances of six “nationals” I studied caused me to look at those organizations in a wholly different light.

Like the regionals, journalism nonprofits with national aspirations are feeling pressure to diversify their revenue base beyond foundations and founding donors. And at least some are looking to the regionals’ success for tactics they can replicate – witness ProPublica’s hiring of Watershed Co., a consultancy with expertise in online and grassroots fundraising. But from what I’ve seen, most depend on major gifts and foundation grants regardless of size.

As I reported here in September, Madeline Stanionis, Watershed’s CEO, pronounced herself “skeptical” of prospects for building a national network of small donors. As Stanionis said at the time, donors to political and other “citizen-powered” campaigns have been conditioned to believe that the candidate or institution that receives their donations will respond directly to their demands. But journalism does not — and should not — operate that way, she said. “I just think trying to force a journalistic endeavor into a hole created by these campaigns is not correct,” she said.

My suspicion is that the “nationals” also suffer from being one too many levels of abstraction from readers’ lives. Their reports, however compelling in their conclusions, don’t explain to the reader why city sewer rates are so high or why the state legislature just slashed school spending. As Mike Worth, my graduate advisor and GW’s former vice president for development, remarked: “The problem with the case (for philanthropy) is that it’s intellectual. Nobody ever died from lack of public journalism.” The latter might be debatable, but I think he’s got it right.

What’s the lesson here? I think there are two, either (or both) of which may be a blinding glimpse of the obvious.

First, the nationals have a solid track record of tapping foundation support and keeping it flowing over a long period. Here, I’m thinking of the Center for Public Integrity, which has relied almost exclusively on foundations and major gifts since Chuck Lewis founded it 20 years ago. Why tamper with success? The only real benefit from the time and effort required to build a grassroots network may be the added credibility of having to answer to an audience. This is doubly true for those such as CPI and ProPublica that specialize in investigative work and also claim to be nonpartisan and/or non-ideological.

The second lesson is that any effort to build a grassroots network at the national level is going to require a lot of refinement. There are simply too many competing news sources and too many requests for support. Breaking through all that background noise is an enormous challenge. Best of luck to those that try.

Now here’s the big exception to the rule: Mother Jones. Among the nationals, MoJo stood out in its time-tested ability to pull revenue from all kinds of sources – advertising, memberships, events and investment income. Steve Katz, the magazine’s chief fundraiser, tells me that the model is an outgrowth of a deliberate effort to define and serve a particular constituency.

In an email, Steve told me that MoJo has “worked mightily to make the case that you won’t find our kind of point of view anywhere else, and that our journalism is also rooted in a ‘value proposition’ a.k.a. a point of view a.k.a. a politics, and hence our journalism – which must stand on its own as professional grade work – is also about changing the world.”

I’ll buy that. But I also think that if you take Steve’s view to its ultimate conclusion in our current economic and technological environment, it points to a tough road ahead for news organizations trying to replicate the newspaper model of objectivity in the online world. The new national news organizations most likely to prosper are those that already have a built-in constituency – or a primary purpose other than producing journalism.

Here, I am thinking of David Westphal’s reporting on Human Rights Watch and its transformation from journalism source to journalism producer. As David noted in his recent testimony at the Federal Trade Commission: “A key point here is that not all of the new players are news organizations.” This trend raises important questions about governance and process within nonprofits – how they try (if they try at all) to insulate their news-gathering operations from their advocacy, much as newsrooms were separated from advertising departments at newspapers.

Where does it all go from here? In my view, the nonprofit model will shake out into two, three or maybe four discrete models, depending on reach and mission. Like cousins, at first glance, they’ll look somewhat alike and may get together once a year for reunions. But each will have its own distinct direction, habits, inclinations – and contributions to the public debate.

A brief word about my method and how I selected the 12 nonprofits for my study. Frankly, it wasn’t very scientific; it was more an exercise in putting together a fact pattern. I began by listing the nonprofits I knew that 1) existed primarily to produce journalism and 2) had revenues of $100,000 or more a year, and 3) had filed their Form 990 tax returns someplace where I could find them online.

The list worked out to an even dozen, with six that I considered to be national in reach (ProPublica, Center for Public Integrity, Center for Investigative Reporting, Mother Jones, The Nation, Grist) and six that were primarily regional (Texas Observer, High Country News, MinnPost, Voice of San Diego, Chi-Town Daily News, New Haven Independent).

From there, I assembled all available revenue data from 2002 onward a developed an annual average for each nonprofit’s revenues and the percentage of revenues derived from “direct public support.” Then I plotted them on two graphs, one for regionals and the other for nationals.

The "Old McKinsey Magnifying Glass"

2009-12-08T08:09:00.006-05:00

Check out the Brent Arends story this morning on MarketWatch. A former consultant at McKinsey & Co., he pivots from some of the testimony at last week's Federal Trade Commission hearing to show how dire the future is likely to be for professional journalists -- and how hard it will be to groom succeeding generations -- under the emerging online advertising model.

So long as news tries to live off online advertising alone, the future for journalists is not bright. Journalism may become like acting or being a musician: There will be fewer full-time jobs, and they will pay poorly. A lot of news writing will end up being done by amateurs, those with day jobs or by kids just out of college, sharing rooms in Brooklyn, N.Y., before they go on to "real" careers.

As if this alone wasn't disturbing enough, Arends uses his "old McKinsey magnifying glass" to concludes that journalism will conform to the 80-20 rule. That is, 20 percent of the stories will be the only ones that make money. Guess which ones those are?

What gets lost in the 80 percent that is swept away are the stories that we need for a functioning democracy -- how your congressman voted, which state legislator held a fundraiser before the big vote and why your sewer rates are five times the national average. It's not that for-profit sites can't deliver this stuff -- it's just not profitable.

"Integrating" News and Advertising

2009-12-04T13:41:00.004-05:00

At first, I was horrified as many were at the news out of Dallas that Belo Corp. would "integrate" news and ad departments at its newspapers, including its flagship Dallas Morning News, by having some section editors at their newspapers reporting to sales managers. Would ad people control content? Yikes. I count myself among the many newsroom troops who fought wars to keep this kind of thing from happening.

But as I thought about it a little more, it occurred to me that this is really just another case of the dead-tree news business trying to catch up to what's going on in the online world. Thanks to our new friend the algorithm, editorial and advertising content are inextricably linked in ways that were never possible with the printed page.

In this new world, online journalists might think they can publish any stories they want. But if the stories don't have the right keywords -- or, heaven forbid, if they contain words blacklisted by advertisers -- they won't sell. And if the stories don't sell ads, the publication, however high-minded its editors, will cease to exist. There's really not much room to escape from that reality -- at least as long as the publication's first duty is to turn a profit for its owners.

Nothing wrong with making a profit. But the close connection can preclude online publications from pursuing some topics with the same depth and vigor as did newspapers of yore -- for example, homelessness, poverty or other social ills that don't have a natural appeal to advertisers. And if other publishers take their cue from the leadership at Belo, that might not be the case for newspapers going forward.

In my mind, this is exactly the space where the nonprofit model fills a need that grows with every cancelled newspaper subscription. In a world where algorithms supplant human judgment, it can provide a needed buffer that protects the public interest.

Tell Us More, Paul

2009-12-01T10:18:00.006-05:00

A major goal of ProPublica, perhaps the nation's highest-profile nonprofit news organization, is to create "nothing less than a new class of cultural institution in this country," Paul Steiger, its high-profile executive editor, told the Federal Trade Commission's conference on the future of journalism this morning.

That's pretty lofty stuff. And it would seem to carry a lot of implications not only for how news is created, but the regard in which a news organization is held by community leaders. Does that mean it would operate like a major metropolitan opera or a symphony? Exactly how would it build that kind of image and gravitas? And what kind of fundraising would it do? How would it work with for-profit legacy media?

I left the morning session still wondering because Steiger didn't address any of those questions with any kind of detail. In his 15 minutes, pretty much all he said about the nonprofit model was that he doesn't think the government should change tax law to help nonprofit news organizations and that other than doing great journalism, fundraising is ProPublica's greatest challenge. Most of what we heard for 14 and 1/2 minutes was the same tale of woe about the demise of newspapers as social watchdogs and what great stuff ProPublica is doing to help fill the void.

I guess I expected more from the leader of what many outsiders regard as the flagship of nonprofit journalism. The model is poorly understood by many, and is often attacked with arguments that don't hold water. One of my favorites is that nonprofits simply will bend to pressure to produce news that big donors want to read -- as if a newspaper never skewed its coverage to please an advertiser.

The big problem is that a lot of journalists and publishers see nonprofits as a kind of shabby, tin-cup substitute for a real news organization. Coming as he did from his stellar career at The Wall Street Journal, Steiger knows better than anybody how the nonprofit model works as a business -- its pros, its cons and how it might play a role (or several kinds of roles) in replacing what is being lost with the crumbling of the newspaper business model. Developing a cultural institution is a great vision for what the nonprofit model can be. But it can't be a throwaway line.

I was impressed last month by CUNY's Jeff Jarvis and his insistence on developing models with specificity. Jarvis' approach is that even if the vision is wrong, discussing in some detail about how it might work is the best way to find what will work. Jarvis spent considerable time developing new business models for news, including one for the nonprofit sector. But he's mostly interested in a for-profit solution. Somebody in with great stature in the news business needs to take up the cause of the nonprofit model and begin explaining what it can do.

Paul Steiger should be that person.

Why Nonprofits Need Newspapers

2009-11-19T16:36:00.002-05:00

Georgetown University fellow Pablo Eisenberg writes about the mutually beneficial relationship between journalism and the nonprofit sector in a new article in the Carnegie Reporter entitled "Why Nonprofits Need Newspapers."

Eisenberg ably makes the case that the nonprofit sector, including foundations and individual philanthropists can help save journalism by providing a redoubt against the pressures of the market, particularly the one we're suffering now.

But with all respect to Eisenberg, he strays off track by arguing that philanthropists haven't shown any interest in saving newspapers. Individual donors, including a group that bid recently for the Boston Globe, indeed have shown significant interest in converting major dailies into nonprofits.

The problem is that the owners won't sell because in a depressed market they can generate marginally more profits by cutting operating costs and, of course, quality. This is exactly why the New York Times Co. pulled the Boston Globe off the auction block last month.

California Watch's Revenue Model

2009-11-17T06:37:00.005-05:00

ProPublica invites publishers to "Steal Our Stories." John Thornton, founder of Texas Tribune, asked newspapers to pay for stories, but concluded the effort was hopeless. But another new nonprofit news organization, California Watch, the Sacramento-based reporting initiative to be launched next month by the Center for Investigative Reporting, is barreling full speed into the syndication-fee model.

What makes California Watch different? Robert Rosenthal, CIR's executive director, says California Watch has built something of a reputation even before the official launch of its web site (now set for December), getting stories onto front pages across the state and wants to leverage that position. "Our goal is not to give it away," Rosenthal said in a telephone interview Monday.

There's no way to know in advance whether the strategy will succeed, Rosenthal acknowledged. But that's how it goes these days in the news business, whether nonprofit or for-profit: Every new project is so much spaghetti thrown against the wall. Whether it sticks is left to the vagaries of economics, social trends and, of course, luck.

But one thing is certain, Rosenthal says. California Watch, like so many new nonprofit news organizations, is under tremendous pressure from funders to find a model that works in the now and creates sustainability for the long haul.

So far, California Watch has lined up $3.7 million in nearly equal donations from three foundations -- Knight ($1.3 million), Hewlett ($1.2 million) and Irvine ($1.2 million). But Rosenthal said they all want to see California Watch pursue a business strategy that generates significant revenues from royalties, advertising and other activities that typically are reported as program service revenue on a nonprofit's Form 990 federal tax return.

How much is still an open question, Rosenthal said, but a reasonable range might be anywhere from 25 percent to 40 percent of total revenues, he said. And the more, the better to create a virtuous cycle in fundraising. "That makes it easier to get funding from the foundations or wealthy individuals," he said, adding that $120,000 of the Knight grant is earmarked for development of a business strategy.

California Watch also plans to adapt standard nonprofit strategies to the digital age. Like his peers at the ProPublica, Rosenthal hopes to pursue smaller donors, perhaps with a strategy built around communities organized on Facebook or Twitter. Rather than ask for donations up front, California Watch plans to demonstrate its good works to community members and then solicit their support. "I can go to you and show you we did this, and it made a difference -- help us," he said.

Looking to the challenges ahead, Rosenthal, a former executive editor of the Philadelphia Inquirer, said he was confident that California Watch could do great journalism; building a successful business model will be the bigger challenge.

"The landscape is moving so quickly," he said.

My Day At CUNY

2009-11-11T19:08:00.006-05:00

It wasn't the whole day -- I had to head back to DC mid-afternoon -- but I was at Jeff Jarvis' NewBiz Conference long enough to get a full dose of the energy and possibilities for new ways to support great journalism.

For those uninitiated in Jarvis' work: Jarvis and his helpers have spent a great deal of time and effort building new business models that might replace newspapers as primary producers of news.

Jarvis' pride and joy are Hyperlocal and New News Organization. The models play out a deeply researched but debatable set of assumptions to the conclusion that old-fashioned news beat coverage (or something recognizable) can be underwritten by a fully for-profit business.

The work is to be applauded. But to my disappointment, Jarvis today gave short shrift to his work on a nonprofit model, barely mentioning it in his remarks. Why? Jarvis is an evangelist for for-profit models, and I think it just isn't his thing.

But I hope that in the future he'll talk more about the role of nonprofits as contributors and partners within the news ecosystem. In fact, his own work on the for-profit New News Organization acknowledges the role nonprofits can play -- it includes a revenue line item of $35,000-a-year from a "donation system for watchdog journalism." Note to Jarvis: That's exactly the role nonprofits are built to play.

Jarvis did get a friendly reminder of the potential for nonprofits from David Cohn, founder of Spot.Us and a helper in organizing the conference. During the Q-and-A session, Cohn suggested to Jarvis that non-profits should not be "ghettoized" by the CUNY business models.

"There are ways for-profits, nonprofits to partner, and that keeps costs down," he said.

The FTC, Here To Help

2009-11-06T10:54:00.013-05:00

You know the old saying about how we're from the government and we're here to help you? That's what came to mind this past week as I read the Federal Trade Commission's notice for its upcoming workshop on journalism in the digital age.

The notice makes the case that "news organizations" (which it notably does not attempt to define) are suffering at the hands of aggregators and other online actors that have drained the fun and profit from news gathering. Among the solutions it wants to examine are some that would seem to support nonprofits -- tax treatment and greater public funding, for examples.

Memo to FTC: No thanks.

It's not that any of the solutions listed by the FTC are so bad -- though I don't much like the idea of government funding non-broadcast news operations -- it's that they provide fresh fodder for misinformed critics who have come to the conclusion that nonprofits pose a threat to for-profit news sites and journalism generally.

Mention "nonprofit" to some of these folks, and you're likely get an allergic reaction. No sooner had San Francisco investor Warren Hellman ponied up $5 million for the Bay Area News Project than somebody complained errantly that the new venture would rely on unpaid college students, forcing other media to cut staff to remain competitive. News flash: Old media aren't competitive in the online age, and that isn't the fault of Warren Hellman or any nonprofit. Others fretted that donated money like Hellman's comes with agendas and strings attached. And advertising dollars don't?

But I digress. Nonprofits offer a viable solution to the decline of socially responsible journalism. By design, they put mission ahead of profit. And as a result, they will live or die based on their commitment to transparency. To the extent that government gets involved, it introduces the appearance of special favors and creates potential for political interference. That's the death of transparency.

To be clear, I don't object to the notion of government oversight. A little can go a long way -- witness the FTC's late-1990s antitrust investigation of Intel Corp. At the time, Intel dominated the computer chip market, and along with Microsoft Corp., seemed capable of devouring anything in its path, much as Google appears today. But just before trial began in 1999, Intel signed a settlement with the FTC in which it admitted no guilt and basically agreed to be nicer to the smaller kids in the technology sandbox.

Based on this experience, we can assume that what the FTC workshop really hopes to accomplish is to once again nudge the bullies into being nicer. I would submit that there are better ways to accomplish this goal. One might be to bring in witnesses who can explain how the nonprofit model works and how it complements the work of for-profits in journalism and other sectors.

My nomination would go to Duke's Jay Hamilton, author of All the News That’s Fit to Sell, which is cited in the FTC notice. In the book, Hamilton makes the case that journalism, especially about public affairs, is becoming a public good. He writes:

The point here is that since individuals do not calculate the full benefit to society of their learning about politics, they will express less than optimal levels of interest in public affairs coverage and generate less than desirable demands for news about government.

I do agree with the FTC that the stakes are high because unlike the great oil and steel trusts of old, the big powerhouses of the Internet are in the business of ideas. As Bill Kovacic, then a law professor at George Washington University and now an FTC commissioner, told me during the Intel case: "I think the impact is so important because its impact on information services affects everything we do."

Texas Tribune Launches Tomorrow

2009-11-02T11:58:00.003-05:00

After much anticipation and a lot of fundraising (more than $3.5 million), Texas Tribune launches tomorrow, going toe-to-toe with the biggest newspapers in the state to cover cover state politics and policy. But unlike its for-profit competitors, Texas Tribune will give away its stories to anybody who wants to publish them.

Backed by Austin venture capitalist John Thornton, Texas Tribune already has generated a lot of media interest. The latest comes courtesy of The Washington Post's Howard Kurtz, who highlighted the new online-only publication in his Media Notes column on Monday.

The big questions, Kurtz notes, are: Could this become a model for non-commercial journalism? Will Texas media outlets use the Tribune's stories?

Thornton's response: "There is a certain wait-and-see attitude that I don't blame them for," Thornton says. "What if we suck?"

Here's a YouTube video showing behind the scenes.

Old School: Nonprofits on Education

2009-10-29T17:30:00.005-04:00

Who'd have guessed it? While the nonprofit model has been getting lots of attention lately as a haven for socially responsible journalism (see links in the right hand column of this blog), a network of community-based journalism nonprofits has been covering local schools and higher education since AOL was the cool way to go online.

One such nonprofit, the Philadelphia Public School Notebook, has been digging up stories and holding officials to account since 1994. Now largely focused on its online presence, the Notebook still puts out a quarterly print magazine fice times a year.

The Notebook recently got a nice mention in the New York Times Magazine, in which author Michael Sokolove calls Notebook editor Paul Socolar "something like the journalist of the future. He is earnest, dedicated to a cause, foundation-financed and, to this point, read by a narrow audience."

The Knight Foundation apparently agrees. In December 2008, it gave a $200,000 grant to the Notebook "to take the magazine digital and add breaking news and user-generated content from a larger audience."

Others are joining in. Two thousand miles away, Education News Colorado began covering higher ed almost two years ago. "There are three of us working on the site full-time, with over 50 years of newspaper journalism among us," editor Alan Gottlieb told me in an email.

But will these nonprofits replace newspapers? Probably not any time soon, concludes the Times Magazine article, What’s a Big City Without a Newspaper? While it says that the Notebook "breaks stories and is notably well written," it also notes that "a broad audience and impact, two goals of traditional journalism, have been hard to attain."

Chicago's L3C Newsroom

2009-10-23T14:53:00.005-04:00

For those keeping track of such things, take note: Journalism is about to get its first low-profit, limited liability corporation, or L3C.

The new Chicago News Cooperative, unveiled on Thursday by former Chicago Tribune managing editor Jim O'Shea, will begin life as a nonprofit, but will change over to an L3C after Jan. 1, when a new Illinois law takes effect, according to a Tribune report today.

The L3C is a hybrid corporation that straddles the line between for-profit and nonprofit enterprise. Vermont last year was the first state to pass a law allowing formation of L3Cs, and Illinois this month became the most recent. Several other states are considering similar legislation, as is Congress.

The Chicago News Cooperative doesn't appear to have investors yet. But it does have a major donor in the John D. and Catherine T. MacArthur Foundation. And it has a paying customer in the New York Times, which is planning a beefed-up Chicago-area edition, much like the Bay Area edition it announced earlier this month. There, the Times will partner with Warren Hellman's nonprofit Bay Area News Project.

Speculation and interest in the L3C model in journalsim has run high. Some have looked to the L3C model as a solution for newspapers because it allows a corporation to take on investors who are willing to accept varying rates of return - or possibly none at all. Foundations would be assured that their investment would qualify as a program-related investment - a crucial distinction under tax law - while socially responsible investors might be willing to settle for, say, a 3 percent return.

While CNC will partner with a newspaper, it remains unclear whether the model can be applied successfully to newspapers themselves. Jay Hamilton, director of the DeWitt Center at Duke University says newspapers likely may be reluctant to switch because of the legal uncertainties involved. Others who have written about the potential for L3Cs include Poynter columnist Bill Mitchell.

Perhaps the most attractive aspect of the L3C is that it automatically designates the company's activity as a "program related investment." Those are the magic words for a foundation, which must prove to the IRS that its grant furthers its mission and also benefits society.

While L3Cs are relatively new in the United States, they're old hat in the United Kingdom, where they're called "community interest companies." Although Vermont remains the only state to authorize the L3C, L3Cs formed in Vermont can operate in any state or territory. States such as Georgia, Michigan, Montana and North Carolina are considering similar legislation, according to a recent post in the California-based Nonprofit Law Blog.

What's In A Name? More Than $1M for TT

2009-10-21T16:13:00.003-04:00

When John Thornton hired Evan Smith away from Texas Monthly to help him launch Texas Tribune, he knew he was getting a top-notch journalist. But as it turns out, he's also getting a major fundraising draw in the bargain.

Since Smith came aboard in July, the Tribune has raised nearly $1.5 million and already has hit its year-end target of $3.5 million, Thornton told me this week. The increase in donations following Smith's move was notable, he said, adding that he didn't anticipate Smith's celebrity power.

Thornton, who threw in $1 million of his own money, said that with the exception of a $250,000 grant from the Knight Foundation, all of the $3.5 million raised so far, has come from in state.

A lot of the money is coming from small donors. Thornton has signed up several hundred individuals. And, interestingly, he's gotten about three dozen corporate sponsors to throw in $2,500 apiece.

Thornton said he purposely kept the corporate sponsorship level to encourage participation and maintain editorial independence.

"If we have 50 and if Ev writes a nasty story about somebody, if it's somebody who gave us $2,500, so what?" he said.

Texas Tribune goes live on Nov. 3.

Investigate West Gets Foundation Grant

2009-10-21T15:55:00.002-04:00

InvestigateWest, a nonprofit that opened shop in Seattle in July, has won its first grant from a foundtion -- $40,000 grant from The Bullitt Foundation, operated by the family that started KING 5 TV. InvestigateWest says it will use the money "to do in-depth, independent environmental reporting."

Here's a link to the story.

Downie Report: Affirmation and a Question

2009-10-19T10:07:00.006-04:00

The forthcoming report on "The Reconstruction of American Journalism" by Len Downie and Michael Schudson offers both affirmation and a question for the nonprofit model.

First, the affirmation. In an op-ed in today's Washington Post that summarizes the report, Downie and Schudson make the following conclusion:

Accountability journalism in particular requires significant reporting resources with strong professional leadership and reliable financial support, which the marketplace no longer can be expected to sufficiently supply.

With this sentence, Downie and Schudson join the growing consensus that journalism -- the kind of accountability, watchdog and investigative reporting that helps provide checks and balances in a democracy -- has become a public good in the digital age. We all need it, but few are willing to pay for it in the form of a subscription.

So what to do?

Among other things, Downie and Schudson recommend creating a national "Fund for Local News" with fees collected by the Federal Communications Commission. I'm not so high on this idea -- I'm of the school of thought that government funding can't help but come loaded with potential for hidden political agendas and other challenges to transparency.

They also call for a more robust nonprofit sector in journalism, which they would accomplish with clearer IRS definitions for "new or existing news organizations." I'm all for this. But here's the question: What exactly is a nonprofit news organization? And who's going to tell the NRA -- the National Rifle Association or the National Restaurant Association, take your pick -- that their newsletter doesn't qualify?

This is an issue of journalistic standards, but goes quickly to the question of nonprofit governance. More and more nonprofits, both new and old, are doing journalism. Some of it is really good, and we know it when we see it. But putting a definition into the IRS code could be highly problematic.

The solution, I think, is for the broader nonprofit community to address this issue in a proactive way. Even if it can't produce a bullet-proof definition, it can identify practices and procedures that create a fairly bright line between journalism and advocacy.

At first glance, this might seem like a call to navel-gazing. But the lack of a defintion already is creating problems in areas like prize eligibilty and, more importantly, in deciding who gets access to places like the Capitol and the White House. Finding a solution sooner than later will help the nonprofit sector get past questions of legitimacy and credibility and get on to doing the kind of journalism that is most endangered in the digitial age.

ProPublica Adviser Manages Expectations

2009-10-14T19:55:00.011-04:00

You might expect the consultant just hired by ProPublica to be optimistic, if not ebullient, about prospects for a tech-savvy, grassroots fundraising effort to help sustain the nonprofit for the long haul. But Madeline Stanionis, CEO of Watershed Co., pronounces herself "skeptical." "I've never drunk the Kool-Aid," Stanionis told me in a phone interview Wednesday.

Why the skepticism?

It has to do with donor expectations.

Stanionis thinks donors to political and other "citizen-powered" campaigns have been conditioned to believe that the candidate or institution that receives their donations will respond directly to their demands. But journalism does not -- and should not -- operate that way, she said. "I just think trying to force a journalistic endeavor into a hole created by these campaigns is not correct," she said.

Stanionis is confronting the central dilemma facing journalism start-ups, nonprofit and for-profit alike: How to create a strong, independent editorial voice while also keeping the revenue flowing. For ProPublica, the stakes are particularly high. Though it has a rolling, three-year commitment for as much as $10 million a year from Herb and Marion Sandler, it needs to build a long-term revenue plan.

Enter Stanionis, whose clients have included The Nation and Mother Jones. ProPublica hired her firm and another to focus on large grants -- New York-based Community Counselling Service Co. -- with a $1 million grant from the Knight Foundation. Like most grants from Knight, the money comes with the condition that ProPublica share the knowledge it gains. But how that will happen isn't clear yet, said ProPublica general manager Dick Tofel. "(We) need to identify outputs relevant to others before we can determine how to share them," he told me in a recent email.

Indeed, Stanionis said she's just getting started, but some things she has sorted out. For one thing, her previous journalism clients are different in that they have well-established brands that "border on a personal relationship with readers." But ProPublica, like new, regional nonprofits such as MinnPost, Voice of San Diego and Texas Tribune, has positioned itself as a non-partisan, non-ideological investigative news source. It can be difficult for an outfit with that kind of professed independence to tell readers it needs their help. "You have to be okay with saying over and over again, 'We need your support,'" Stanionis said.

There's also the issue of managing reader/donor expectations. There's definitely room for a two-way conversation with readers in which they provide data and other inputs, Stanionis said. But that doesn't mean they get to dictate what stories get reported and written. "The nuance is important," she said.

So what kind of grassroots strategy will work for ProPublica and other nonprofits? What might help, Stanionis said, is if a reward for donating is something "fun" -- like the ACLU membership card. But as CUNY's Jeff Jarvis also warned, Stanionis knows that focusing too much on premiums and other rewards carries risk of drift from the mission, which is a nonprofit's primary reason for existing.

"It becomes a coffee cup and totebag machine," Stanionis said. "Is that what we want to be doing? Is that where we want to be in 20 years?"

A Lesson from Chi-Town

2009-10-13T11:06:00.003-04:00

Like a lot of people who are concerned about the future of journalism in the digital age, I'm still wondering what we're supposed to have learned from the demise of Chi-Town Daily News last month. So I called one of my favorite editors of all time, Jacqui Banaszynski, who sits on the nonprofit's board.

Turns out, Jacqui also is struggling with this question.

The need to raise money to replace Chi-Town's start-up funding from the Knight Foundation was well understood by the board, she told me. But what could have been done differently to keep Chi-Town going? That's much harder to pinpoint, she said.

Among the headwinds Chi-Town and founder Geoff Dougherty faced were the severity of the economic downturn, she noted. It also "was trying to keep the geography in journalism in a new digital and citizen-choice environment. No one has yet figured out the pay model for that."

But she also wonders, as I have, whether the skill set of a journalist necessarily translates to that of a nonprofit executive. As Jacqui said, "I’d hate to be judged for my success as a businessperson and fundraiser when what I really am is a journalist."

She suggests that foundations such as Knight that have invested so heavily in Chi-Town and other startups take an extra step -- help them develop the kinds of expertise they will need to sustain themselves. While ProPublica did get a $1 million Knight grant to get that kind of help, the rest are pretty much on their own.

"So if there’s a cautionary note here, maybe it’s to make sure new ventures are a partnership of people who know how journalism works and how money works," she told me. "Maybe the gracious foundations who are out front in their efforts to protect the vital role of journalism in society need to dedicate part of their funding support to develop business acumen while these start-ups find their footing."

A Model Partnership in Charlottesville

2009-10-08T09:30:00.003-04:00

A great post at the Nieman Lab site today by my colleague Mac Slocum. He writes about the partnership between The Daily Progress, the daily paper in Charlottesville, Va., and a local journalism nonprofit, Charlottesville Tomorrow, which focuses exclusively on growth and development issues.

Mac's article shows several of the strengths of the nonprofit model and its potential for partnering with traditional media that no longer can afford to perform basic watchdog functions for their communities.

A key point of Mac's article is that this was no shotgun marriage. It was relationship built on hard work and mutual respect. And, Mac notes, Charlottesville Tomorrow took several crucial steps to gain credibility: It put in place appropriate governance procedures; it took fundraising and financial management seriously, and it built a track record of good work.

This model might not work in every community, but it shows what role nonprofits can play at the local level in providing a service that technological and economic forces have revealed as a public good.

Fun With The CUNY Model

2009-10-06T14:33:00.003-04:00

Advance warning: This post contains some dated and self-promotional material, but I did want to point to an article posted recently by Matt Sollars on the CUNY News Innovation site.

For the article, Matt asked me last month to look at CUNY's not-for-profit model and make an amendments I saw fit. When he and Jeff Jarvis rolled out their "New Business Models For News" project at the Aspen FOCAS09 conference in August, the first thing that struck me was the high expectation for advertising support (something like 50% of revenues by Year 3). But the more I looked, the more I thought that the model needed to reflect the maturation of a nonprofit's membership program.

Though community-oriented journalism nonprofits such as MinnPost are a recent phenomenon, nonprofits have been doing membership campaigns for a long time. And one common experience is that big donations tend to drive smaller ones. Call it a socialization effect or whatever you like, but people often follow the example of leaders in their community. Ultimately, the membership gift chart starts looking like a pyramid, beginning with a few big gifts at the top and filling out with growing numbers of smaller gifts at the bottom.

So back to the CUNY model: I used a typical pyramid from the Hank Rosso text on fundraising as a guide to adjust the number of donors over the first three years. It bumped up the potential revenues from membership campaigns by about $200,000 for an overall budget of about $3 million.

Of course, as helpful as the CUNY models are in helping us envision new journalism enterprises, they are at best informed speculation. The more important aspect of the membership campaign is that it helps keeps nonprofits attuned to the needs of the communities they serve. In that regard, a well-executed campaign is about more than money.

Frank Daniels' Speeding Ticket

2009-10-03T07:22:00.005-04:00

Not long after I landed my first reporting job at the Raleigh News & Observer in 1988, the publisher and primary owner, Frank Daniels Jr., walked into the newsroom one day, handed the cop reporter a speeding ticket he had just received on Interstate 40 and told the reporter to write about it for the next day's paper. As far as I know, it was the only time Frank ever demanded that a news story be published in his own newspaper.

Frank stayed away from his newsroom for one simple reason: He knew that meddling was a bad idea. No reporter or editor worth his or her salt would ever want to be associated with a newsroom where the publisher determined what beats got covered and what stories got written. If Frank's paper appeared to harbor biases or pick on certain politicians, that was a matter to be settled between the journalists and their sources. With that philosophy, Frank ran what was widely regarded as one of the nation's best regional newspapers.

For the sake of argument, let's assume that rather than sell the N&O to the McClatchy chain as he did in 1995, Frank created a foundation that ran the paper as a nonprofit. Would Frank then have started ordering up stories that he thought had been overlooked by his star reporters and editors?

I don't think so.

The point here is that journalistic bias is a function of human intention, not the business model under which the story is produced. For-profit, nonprofit, it does not matter. If a reporter or editor has an axe to grind, he or she is going to find a venue to grind it.

I offer this reminder as a coda to stories that followed Warren Hellman's announcement that he would put up $5 million toward a new, nonprofit newsroom to cover news in the San Francisco Bay Area. Among them was a critique from Slate's Jack Shafer that the recent wave of new nonprofit news organizations is somehow tainted because it doesn't meet some market-based test of acceptance. Shafer's rule of thumb seems to be: If it doesn't sell ads, it doesn't merit publishing.

I think back to the stories I used to write at the N&O. A lot of them were about marketing abuses by one of the major drug companies based in nearby Research Triangle Park. The CEO, a friend of Frank's, once called asking him to pull me off the beat. Frank's answer, relayed by my editor, was to tell the CEO to go to hell. The truth -- that the marketing abuses hurt people -- didn't sell ads. But by telling it, the N&O did its community a service that never could translate into an ad rate.

Frank understood the value of public service better than most, and that's what made him a great publisher. Will Hellman get it as well? I don't know him, so I can't say. But I do know John Thornton, founder of Texas Tribune, also mentioned in Shafer's piece, and I can say that he certainly does. Why would he plunk down $1 million of his own money to create his own vanity press? If that's all it amounts to, then nobody will read it. John's a smart guy, and he gets it, the same as Frank did.

So where does that leave us? Should we mourn the era of corporate media ownership that brought us the Los Angeles Times' Staples Center fiasco? Do we think there will be less publishing-side pressure on for-profit newsrooms now that so many newspapers are in bankruptcy or otherwise on their way to extinction? Or should we wring our hands about the undue influence of nonprofit publishers who long for the day when their local newspaper actually carried reviews of the ballet?

I'll take the latter. The nonprofit model isn't the only answer. But it is an answer to the problem of underwriting socially responsible journalism in the digital age. If nothing else, the nonprofit model offers a range of alternatives to addressing the problem of newsroom bias.

For one, there are unique governance structures. Many of the startup nonprofits of note have installed journalism advisory boards to oversee the work product. Could you imagine a regional paper like the N&O bringing in renowned journalists from places like the Washington Post or New York Times to evaluate their work? Of course not. But that's what nonprofits are doing.

And then there's the fundraising. Fundraising in every form -- whether memberships, foundation grants or corporate sponsorships -- is a test of a nonprofit's ties to its community and an opportunity to make the case that it provides value even to those who choose not read or to donate. Fundraising 101 teaches nonprofits that the path to success and sustainability is to build a diverse base of support. And that's exactly what successful journalism nonprofits are doing. Sure, donations come with conditions. But so do subscriptions. Would you keep subscribing to a paper that never got delivered in the rain or that dropped the cartoon that you and your spouse share over breakfast? Of course not. Fundraising keeps nonprofits connected to their communities.

The hard truth is that there is no way to outlaw bias, either real or perceived, from newsrooms. It has been a fact of life as long as there have been journalists.

Texas Tribune Gets Knight Grant

2009-10-02T09:17:00.005-04:00

Hats off to John Thornton and Texas Tribune for securing $750,000 in grants, including $250,000 from the Knight Foundation. The grants are a big-time validation of John's vision for his site - and for the nonprofit model at the state and community level.

Hellman's $5 Million For Bay Area Nonprofit

2009-09-25T10:00:00.006-04:00

Big news from the San Francisco Bay Area: San Francisco businessman Warren Hellman will put up $5 million to help launch the nonprofit, which will work in partnership with KQED, the largest public broadcasting outlet in the area, and the Graduate School of Journalism at the University of California at Berkeley, according to a report in today's New York Times.

There's a lot of interesting aspects to this deal -- not the least of which is mention of the Bay Area News Project functioning something like a West Coast bureau for the Times, according to a report in the San Francisco Chronicle.

There's also coverage by the Associated Press, the San Jose Business Journal, and the BayNewser. And here's a link to the news release on PR Newswire.

Futurity and Almost-Journalism

2009-09-24T09:49:00.007-04:00

More knowledge is a good thing, especially when it comes from top-flight research institutions. But the launch of Futurity, a nonprofit news service specializing in science and medicine, underscores what Dan Gillmor describes as the challenge of the "almost journalist."

Futurity was created by universities frustrated by the disappearance of newspaper reporters and column inches dedicated to covering their work, according to a recent report in the San Jose Mercury News.

Many of the articles on the Futurity site are written by the universities' public relations departments. And while the articles might be factually accurate, the problem with almost-journalists is that they don't always apply the principles of journalism to their work, Gillmor wrote in an article last year. Foremost among them is applying some standard of fairness -- or as others might call it, skepticism.

This is the chief problem with Futurity, according to former science reporter Charlie Petit, who is quoted in the Merc article. "The quality of research university news releases is quite high. They are rather reliable," Petit tells the Merc. "But they are completely absent any skepticism or investigative side."

How to solve this problem is not entirely clear. Petit suggests clear labeling of articles as a start. Kaiser Health News, a project of the Kaiser Family Foundation, has a national advisory committee of distinguished journalists to oversee its work. Gillmor is less specific, but says the problem is one that should be addressed by journalism educators.

Whatever the solution or solutions, they are certain to be put to the test as more and more advocacy nonprofits, think tanks and universities fill the void left by newspapers. According to Gillmor, almost-journalists will find that adhering to the standards of journalism ultimately will help them raise their game.

"By doing so, they can strengthen their own arguments in the end. At the very least they are clearer, if not absolutely clear, on the other sides’ arguments, however weak," he writes.

ProPublica Gets Professional Help

2009-09-23T10:01:00.005-04:00

A frequently misunderstood aspect of nonprofits is that fundraising is a tin-cup substitute for a smart business plan. That misunderstanding gained traction in some circles a couple of weeks ago when Geoff Dougherty, editor of the Chi-Town Daily News, announced that he and his staff were leaving to start a new, for-profit publication with the backing of unnamed "angel" investors. In his post, Dougherty said CTDN needed $1 million to $2 million per year to "do a great job of covering a city as sprawling and complex as Chicago," but could raise no more than $300,000 per year.

Electing to operate as a nonprofit, whether producing journalism or another type of public service, dictates that a robust fundraising effort must be part of the business plan. The plan must generate enough revenue to achieve the organization's mission while also guarding against overdependence on any single source of support.

Few understand this reality better than the folks who run ProPublica, the New York-based startup that has been given a $30 million, three-year lease on life by Herb and Marion Sandler. Faced with the prospect of filling a $10 million-a-year budget gap, ProPublica has hired two of the biggest guns in the fundraising world with help from a $1 million Knight Foundation grant.

One is New York-based Community Counselling Service Co., which will advise "how best to conceptualize, structure and execute fundraising from institutions and individuals capable of making larger gifts, as well as laying the groundwork for hiring our own director of development next year," ProPublica GM Dick Tofel said in an email interview.

The other is Watershed Co. , a specialist in online fundraising, which will "look for us at the potential for small gifts in large numbers," Tofel said.

Both CCS and Watershed come to ProPublica with lists of well-known clients, and they have experience that can help move ProPublica -- and ultimately, other journalism nonprofits -- into a new sphere of fundraising professionalism and partnerships.

Among CCS's clients is Habitat for Humanity.While Habitat may be best known for building low-income housing, it also has gained renown within the nonprofit world for working closely with the communities it serves and for successfully involving deep-pocketed corporate partners in its mission. Building houses and writing investigative news stories are decidedly different activities, but CCS no doubt will examine how it can apply the experience of its other clients to ProPublica.

Watershed is headed by Madeline Stanionis, who has been a leader in applying technology to fundraising. For example, in a Feb. 26 article in the Chronicle of Philanthropy, Stanionis talks about the growing potential for philanthropic micropayments made over mobile phones now that carriers are taking less of a cut. In the article, Stanionis relates the success that one of her clients, the Humane Society of the United States, found by using text messages to solicit year-end gifts. Such experience could translate well to online journalism, as more publishers connect with readers through phones rather than computers.

For smaller startups, a strategic fundraising plan may be less elaborate than what ProPublica can afford, but creating one is no less vital to the organization's long-term viability, according to Voice of San Diego's Andrew Donohue. There's more foundation money available for journalism start-ups than ever before, Donohue told me in an email. But he added: "We've learned that this isn't money you should rely on for your long-term. It's start-up money to get you going. You've got to be absolutely obsessed with finding as many revenue streams as possible to sustain and diversify you for the future."

VOSD is working on developing some as-yet-undisclosed "nontraditional" sources of revenue, Donohue said. "This seems to be the stage that the early nonprofit news organizations are reaching right now: We've proven we can do the journalism and attract the early money. Now we've got to be preparing to wean ourselves off of foundation money or diversify from our original donors."

Exactly where will ProPublica go with all the high-dollar advice it's getting? It's too early to say. But whatever it does is likely to be emulated by other journalists who have chosen the nonprofit model and are willing to put some creative energy behind their business plans.

New Nonprofit in Orange Co.

2009-09-18T13:34:00.003-04:00

Here's one that escaped my attention this week: A group that includes prominent lawyers, former state lawmakers and former newspaper reporters plans to launch a nonprofit online news site called Voice of OC, according to a report in the Los Angeles Times' TV Insider.

Joe Dunn, a former Democratic state senator from Santa Ana who chairs the board of directors, told the Insider that the group hoped to support a $600,000 annual budget. The group decided to launch the new site after conferring with the group that runs the highly regarded Voice of San Diego.

Buying Time in Chi-Town

2009-09-14T14:06:00.003-04:00

Like many, I was disappointed to read Friday that the editorial team behind Chi-Town Daily News was giving up on its nonprofit business model in order to launch a new, as-yet-unnamed, for-profit news site about city news. In a blog post, editor Geoff Dougherty says the reason was that CTDN simply couldn't raise enough cash "to do a great job of covering a city as sprawling and complex as Chicago."

I don't know Dougherty, but I must say that I admire his ambition. He figures he needs $1 million to $2 million a year to do the job right. I'd bet that's still a fraction of what the Chicago Tribune or Sun-Times spends covering city government. But he's been at it with CTDN for four years now, and he still hasn't been able to raise more than $300,000 a year. Dougherty wants to get to the promised land, and he wants to get there now. I understand that.

The hard truth, though, is that it takes more than four years to build a donor base and diversify sources of revenue to sustain a nonprofit. The fact that Dougherty got to $300,000 in just four years is a major accomplishment. Sure, it's easy to look at an outfit like ProPublica and wish that you, too, could find a benefactor willing to put up $10 million a year to pay for your newsroom. But that kind of one-stop shopping isn't a business model; it's a lightning strike. -- something that the people who run ProPublica know better than anybody. In fact, ProPublica is using a $1 million grant from the Knight Foundation to hire a fundraising firm to help it figure out how to sustain itself when its initial funding taps out, according to general manager Dick Tofel.

I don't doubt that Dougherty and his team knocked on every door they thought possible before giving up on CTDN. But the great strength of the nonprofit model, I believe, is that it puts the needs of the newsroom ahead of all others. More importantly, it treats socially responsible journalism not as a product, but as a cause greater than any individual institution that serves it. When you bring on investors, they come first, even if they are "angel" funders. Maybe not this year, or the next, or even the third. But someday, they're going to demand a return.

So the question that lingers in my mind is this: What exactly is Dougherty getting from his new investors? As far as I can tell, he hasn't cracked the code of making a profit by selling socially responsible journalism. The fact is, it is likely to remain a money-losing proposition. So if he's using the money to do what he says -- scale up his news operation -- he's merely buying time until the next instance that his ambitions exceed his revenue base.

I wish Dougherty well, and I do think that we will see more hybrid organizations that blend nonprofit and for-profit activities. But if he plans to stay true to his mission -- providing "vibrant public affairs coverage" -- he's going to have to ask permission of his investors. Then we'll see exactly how angelic they are.

A postscript: In his post on Friday, Dougherty said he was in talks with some local nonprofits that might buy the CTDN website and continue its neighborhood reporting program. This is a reminder to self to check back in three years and compare what the new CTDN looks like next to Dougherty's next venture.

An Offer He Couldn't Refuse

2009-09-11T09:32:00.005-04:00

Why would an award-winning journalist with a long history of breaking big stories in his home state leave mainstream media to work for an ideologically-driven think tank? According to Mark Flatten, the think tank in question -- the conservative Goldwater Institute in Phoenix -- made him an offer he simply couldn't refuse.

I wrote about Flatten yesterday. In an email interview, Flatten said he took the job in large part because Goldwater wanted a watchdog over government power and spending -- which was what he was doing at the East Valley Tribune -- and would give him the same level of editorial independence. He writes:

During the interview process we were in complete agreement that the reports I produce would have to follow the rules of accuracy and fairness as would be required at a newspaper. When we publish my findings (which should be soon) we plan to include extensive links to original documents so that readers can judge the information themselves. The benefits of doing this are obvious. When I uncover waste, fraud or abuse in government, the people I am writing about will naturally try to dismiss the report as advocacy because of my connection with Goldwater. However, by adhering to the rules of good journalism, and by making it clear to readers where the information came from, the facts in my (reports) will speak for themselves.

Political belief had little to do with the move to Goldwater, Flatten said. He added:

As I like to say half-jokingly, my views tend to be pretty libertarian (small “L”) because I’ve covered government long enough to know it doesn’t do anything very well. I think that is a good fit with Goldwater’s philosophy of being skeptical about government power and spending. I can’t answer whether that was a factor in my being offered the job. As to my decision to take it, the main issue for me was that the people here were clear that they were not looking for an advocate, but rather someone who could report critically about government and follow the rules of good journalism.

Flatten also said he agrees that costly and time-consuming work of investigative journalism "is likely to shift more to non-profit organizations and think tanks to a large degree in the near future."

A Sign Of Things To Come

2009-09-10T15:28:00.003-04:00

Here's a press release headline that's likely to be recycled many times: "Nonprofit Institute Hires Investigative Journalist." Just add the names of the nonprofit and the journalist, and you've got another story about the future of watchdog journalism in the post-newspaper era.

Now here's a test: What if the institute in question was a right-wing think tank that got its money from a national group dedicated to cutting health and welfare programs and to opposing safety and environmental regulations? Is that okay? Is it still journalism?

That's exactly the situation in Phoenix, where the Goldwater Institute recently hired former newspaper reporter Mark Flatten to "research, investigate and expose government corruption and abuse," according to a statement from CEO Darcy Olsen. A news article notes that the money to hire Flatten came from the State Policy Network, which describes itself as "the capacity building service organization for America's free market, state-focused think tank community."

Read the rest of this post at Nieman Journalism Lab.

Investing in Journalism the IJNR Way

2009-09-03T13:13:00.008-04:00

Talking with journalists involved in nonprofit startups, I've noticed a dynamic that can be best described as a love-hate relationship with money: Many love the idea of being handed a check, but they hate the idea that it might appear to compromise their work in some way.

To these conflicted souls, I offer the example of Frank Allen, director of the Institutes for Journalism and Natural Resources, who has been investing other people's money in socially responsible journalism since 1995 and hasn't lost a night's sleep yet.

A quick bit of background: Allen, a former Wall Street Journal editor, founded IJNR to help journalists uderstand the complexities of the environmental beat. The institutes typically are week-long excursions to places such as the Great Lakes or Oregon's Willamette Valley, where journalists meet with people who deal with natural resources issues from all perspectives - and he does mean all. Reporters hear from conservationists, industry reps, farmers, government officials - pretty much anybody who has a stake. And that's the point, Allen says. Reporters get a complete picture. (Disclosure: I am among IJNR's 600 alumni, having been a fellow with IJNR's 2001 Pacific Northwest Institute.)

Trouble is, the trips are expensive. In its last IRS Form 990, IJNR reported spending $436,551 on programs. So where does it all come from?

I caught up with Allen earlier this week to talk about his nonpofit business model and his efforts to maintain an ideologically broad base of support. Fundraising for IJNR, it turns out, also in an exercise in teaching context and perspective.

But first, some numbers.

About 60 percent of IJNR's funding comes from big foundations; another 20 percent comes from small donors including alumni and small, family-controlled foundations; and 5 percent comes from conservation groups.

Now here's something of a shocker: About 15 percent comes from big corporations such as Georgia-Pacific and Chevron that haven't always been portrayed as good environmental stewards.

"The strategy from the beginning was to see if we could pull together and maintain a broad and credible spectrum of supporters," Allen says.

When courting representatives of a major prospect, whether a foundation or a corporation, Allen says he emphasizes the importance of educating reporters. Most reporters get little time out away from deadline pressure and have few opportunities for professional development, he explains. The message: Money won't buy you a positive story, but it can help open minds. A gift to IJNR is an act of enlightened self-interest.

"It's a cultivation process," Allen says of his sales pitch. "You have to figure out how to get through the door and to the point where your request is welcome."

Sometimes making the case is the easy part. Allen recalled the case of a company that wanted to donate $100,000. But officials insisted that reporters tour their laboratory and that they lead the tour. Allen refused the money. In another instance, the Turner Foundation wanted to make its donation contingent on excluding industry groups. Again, Allen refused. (An interesting coda: Ted Turner's daughter, Jennie Garlington, later applied and was accepted to IJNR without revealing her father's identity. She reported her positive experience, and IJNR got its grant.)

Bottom line: It's not always easy to maintain one's backbone when courting a broad array of funders, but doing so helps build a more important asset - credibility. If you can keep love of money in check, you won't won't hate yourself in the morning for having taken it.

Eight Foundations and a Football

2009-09-03T10:51:00.004-04:00

A lot of important questions about foundation-funded journalism are being kicked around these days. Can foundations fill the resource void left by newspapers? Will they try to skew coverage? Is their support reliable? Or is it a fad?

I've been mulling a more basic question: Do foundations know what the heck they're getting themselves into?

I'm not so sure.

In a recent article in the Chronicle of Philanthropy, Chuck Lewis and Bruce Sievers called upon the nation's major foundations to help preserve American democracy by helping stave off the precipitous decline of our news media. They write:

Philanthropy is in a unique position to take the initiative because it can move quickly and deliver significant resources to key players in the news media, while taking a hands-off stance toward content. Yet, with a few notable exceptions by some of the nation's biggest grant makers - Benton, Carnegie, Ford, Hewlett, Knight, MacArthur, Open Society Institute, and Pew - foundations have not become involved in this arena of public life.

While some might quibble with the assertion of the first sentence, I was more intrigued by the implication of the second sentence. And I wondered: What exactly are those eight big foundations doing to help support socially responsible journalism?

The short answer is: a lot. They are to be applauded for doing so. And others not mentioned in the article are answering the call.

But when you scratch at the surface, it becomes clear that foundations don't agree on how to define the problem at hand. And when measured against Lewis' and Sievers' call to "do the most good by financing the difficult work of journalists themselves," only one of the eight (Knight) appears to have a systematic method of doing just that - or at least one they cared to share on their web site.

Line those foundations' programs alongside one another, and you get a show-and-tell of assumptions about what's ailing American journalism. You also get a sense of the foundations' institutional tolerance and capacity for experimentation within the nonprofit model. Some simply aren't equipped to make the necessary, critical decisions involved in picking winners - and some seem uninteresed in doing so.

For example, the Hewlett Foundation gives millions to journalism practitioners. But most of it goes to proven winners such as PBS' NewsHour, and the money comes out of their "special projects" program area, where they keep the odds and ends that don't fit neatly into their seven areas of concentration.

The Ford Foundation lists 400+ grants under "advancing public service media," but they're all over the map: money for documentaries, for universities, etc.; not a lot for what could be considered old-fashioned journalism. Meanwhile, Carnegie focuses on journalism education. Benton cares mostly about telecom policy and the digital divide. Etc., etc. You get the idea.

Not that different approaches are a bad thing. As Chairman Mao said, let a hundred flowers bloom. But as Matt James of the Kaiser Family Foundation and Kaiser Health News has noted, the philanthropic effort to support journalism needs cohesion and a larger scale - and that may be a greater task than any foundation can take on alone.

This post also may be viewed at Save The News.

The promise of a newspaper’s investigative spinoff

2009-08-31T12:40:00.005-04:00

The latest edition of American Journalism Review has an in-depth piece on the thinking behind the San Diego Union Tribune's to spin off (though that's not the official phraseology) its investigative team as an independent nonprofit.

Rather than wait for the ax to fall on her four-person team, investigative editor Lorie Hearn did the deed on her own terms - terms that allow her team to publishing their work in the UT, but also getting the team off the publisher's books.

Rather than wait for the ax to fall on her four-person team, investigative editor Lorie Hearn did the deed on her own terms - terms that allow her team to publishing their work in the UT, but also getting the team off the publisher's books.

As part of the new relationship, the UT will pay the new nonprofit a substantial amount of money. In return, the UT gets first dibs on a specified number of investigative stories. But Hearn also has freedom to shop the story around to other media - and to develop her own philanthropic base. She already has one major donor.

Although the article does not make the connection, it notes that Hearn is negotiating with a representative of Platinum Equity, the Beverly Hills buyout firm that recently bought the UT and currently is bidding for the Boston Globe.

Can this kind of partnership help work, for both journalists and publishers on a broader scale? We'll see. But Hearn clearly sees the arrangement as a win-win.

"I'm not abandoning the Union-Tribune," Hearn tells AJR. says. "I am actually doing this because I want to help it survive."

This post also may be viewed at the Nieman Journalism Lab.

The For-Profit Case for the Nonprofit Model

2009-08-26T16:01:00.010-04:00

There's a great new post today at Free Press's Save The News project. It's from Cindy House, formerly of the now-deceased Rocky Mountain News and now of the Rocky Mountain Independent. In it, she talks about the Independent's business model and why the founders chose the for-profit path.

House's post is worth reading because the three-pronged model she describes is truly innovative. The first two elements we know a lot about: advertising and memberships. The third is something not normally associated with newsrooms: The Independent plans to develop a consulting business that will offer "Web design, search engine optimization and editing/writing services to other businesses."

Although House doesn't use the word "subsidize" in connection with journalism, that's exactly what she's talking about. As she says, the owners hope the consulting business will "bring in much-needed capital." She adds: "We keep our expenses low so that whatever revenues come in go right back into content development."

This, ladies and gentlemen, is precisely the argument for the nonprofit model.

To review: Socially responsible journalism has been revealed as a public good because it cannot (or at least has not yet) found an online niche where it can be fully supported. The nonprofit model addresses that problem by opening the door to philanthropic development, as well as for-profit subsidiaries, including consultancies. The nonprofit mission is crystal clear: Whatever surplus may be generated goes right back into newsgathering.

Now back to the Independent. If I read House's post correctly, that's exactly what the owners hope to do.

I deeply admire the courage it took for these laid-off journalists to take control of their futures (not to mention the effort they are making in the public interest). But as a for-profit, the Independent someday is going to have to start paying taxes on its profits. And what if the consulting business is wildly successful, throwing off enough cash that some of the owners suggest that the board declare a dividend? Isn't that what for-profit owners are supposed to do? Yes, the owners agree now that profits go back into the newsroom. But at a for-profit, that might not always be the case. And changing course could prove painful.

There's more ammunition in House's post for the nonprofit model.

The idea of memberships, of course, is one that public radio stations have built development plans around for decades.

Also, House confesses that managing the business model to protect editorial integrity won't be easy. She writes:

(A)s journalists, this is tough for us to wrap our heads around. Traditional newspapers erect a “wall” between the editorial and advertising/business departments to prevent conflicts of interest. As we build up our consulting business, we will have to reshape this wall, perhaps by spinning off a segment that’s separate from the core news magazine.

Nonprofits have developed some fairly sophisticated governance procedures to manage these kinds of church-and-state divisions. They're not perfect, but again, they are designed to serve the mission, not the bottom line.

Monetizing Influence

2009-08-25T14:21:00.003-04:00

For those who missed it, please see Phil Meyer's recent letter to USA Today about the perilous prospect of journalists and publishers attempting to monetize their influence without telling their readers exactly who they are.

Meyer, author of The Vanishing Newspaper, recounts the story of former Newsweek reporter Richard Wolffe. Wolffe hosted MSNBC's Countdown show after he joined the lobbying firm Public Strategies earlier this year, but did not disclose his new job to viewers.

Meyer cites this and the Washington Post's "Dinner-gate" case as examples of why journalism needs safeguards that help ensure editorial independence and credibility in a new and highly chaotic online age. He says:

If a professional such as Wolffe does not see a problem with being an advocate and a reporter at the same time, and if the publisher of the Post can be surprised by the uproar over selling access, then we are entering a strange new world. Without clear standards, journalism can't be trusted. If it can't be trusted, it won't be influential. If there is no influence, there is nothing to monetize.

This is doubly true for the nonprofit sector in journalism. As nonprofits attempt to build new sources of revenue through member events and corporate sponsorships, there is ever greater potential for conflict - or at least the potential for conflict. Transparency and great professional care will be more important than ever.

Bob Garfield Interview

2009-08-24T21:11:00.002-04:00

In case you missed it, here's a link to my interview with Bob Garfield and "On The Media" about nonprofit journalism. I thought he did a good job of presenting the topic to a non-expert audience.

Whither, L3C?

2009-08-19T13:44:00.006-04:00

With so many journalism luminaries focused this week on new business models at Aspen Institute's FOCAS09 conference, I was a little surprise not to hear more about the potential for the low-profit limited liability corporation, or L3C.

The L3C is a hybrid corporation that straddles the line between for-profit and nonprofit enterprise. Vermont last year was the first state to pass a law allowing formation of L3Cs, and Illinois this month became the most recent. Several other states are considering similar legislation, as is Congress.

Some have looked to the L3C model as a solution for newspapers because it allows a corporation to take on investors who are willing to accept varying rates of return - or possibly none at all. Foundations would be assured that their investment would qualify as a program-related investment - a crucial distinction under tax law - while socially responsible investors might be willing to settle for, say, a 3 percent return.

So where is the grand experiment in L3C newspaper journalism? We're still waiting to find out.

One of the big problems is that nobody really wants to go first, says Jay Hamilton, director of the DeWitt Center at Duke University. The concept remains fraught with uncertainties, not the least of which is whether newspapers can return to profitability after the recession.

Another, Hamilton says, is the cost of navigating the legalities of converting an existing corporation into something new. "Once a media organization has worked out how to transition to a L3C or be formed as a L3C, the next one would be cheaper since the first process would reveal what issues are likely to arise," Hamilton said in an email. He discussed the idea more fully in a recent article that appeared in the Raleigh News & Observer and other newspapers.

To get an idea of what an L3C might look like, have a look at an idea floated by Chuck Lewis in a recent Columbia Journalism Review article entitled "A Social Network Solution."

Lewis, founder of the Center for Public Integrity and the Investigative Reporting Workshop, writes the article from the point of view CJR calls "voices from an imagined future," looking back on current events from 2014. In the article, Lewis reveals his plans for what could become an ambitious L3C:

With all of this in mind, in late 2009, I began World Investigative Reporting Enterprises (WIRE), a global gateway to investigative journalism - a multimedia platform for the best original stories by some of the best journalists in the world, commissioned by, reported, written, edited, and published or produced for WIRE. The privately owned company includes investors who are socially committed to this work and who don't expect 20-plus percent annual profits - people I know personally and trust.

He then states that the enterprise would rely both on payment for content and donations from readers:

(B)y the end of 2013 profits were at 5 percent. By then, we had accumulated one thousand media partners throughout the world, using a syndication model in which content is exchanged for online page views, which WIRE then uses to sell advertising - with a share of that advertising income paid back to the partner site. Revenue is derived from advertising and reader donations. The latter has vastly exceeded our expectations. Thousands of civic-minded individuals became so excited by the historic nature of WIRE and the public service it provides that they became reader-contributors, what we call WIRE Associates - crowd-funding by credit card, not for an individual project or subject area, but for the entire operation.

Lewis said in an email last week that his plans to launch WIRE this fall have been postponed due to other commitments, including his work in forming the Nonprofit Investigative News Network this summer. Lewis hasn't committed to forming the enterprise as an L3C. But he adds: "Stay tuned!!"

The CUNY Nonprofit Model

2009-08-17T15:03:00.005-04:00

One of the big debates about the nonprofit model in journalism is whether nonprofit news organizations should accept advertising. Some do. Some don't. Some are thinking about it.

Now, the City University of New York's New Business Models for News Project is rendering its own verdict: Nonprofits can't afford not to.

CUNY has developed financial models for three different types of news organizations that could serve a metro area of 5 million people if the daily newspaper ceased to exist. The models are being presented this week at the Aspen Institute's annual Forum on Communications and Society.

What may be most striking about the "Not-for-Profit News" model is the extent to which it relies on advertising as a source of revenues: In Year 3 of CUNY's model, advertising revenues account for about 50 percent of total revenues, up from 18 percent of in Year 1. (Total revenues would be about $2.8 million in Year 3, up from about $1.4 million in Year 1).

CUNY's models were based on exhaustive research, including the amount of foundation money that likely would be available in a given community. I have no reason to doubt their assumptions. But the model suggests that the new organization's ad department would be in overdrive from Day One, racing to push ad revenues from a standing start at $0 to a rate of about $117,000 per month.

The prospect raises a difficult question for nonprofits and would-be nonprofits: How can they keep a small newsroom in a small organization insulated from the pressures associated with that kind of metric? And is that possible when, as the CUNY model suggests, the Editor also is the CEO?

One of the supposed advantages of the nonprofit model is that it can help relieve news organizations of the financially driven biases that afflict for-profit newspapers. Given limited foundation resources and limited potential for membership development, it seems that might be a taller order than some had expected.

Bill Cahir Memorial Fund

2009-08-16T21:59:00.004-04:00

A fund has been created for Bill's two unborn daughters.

Checks payable to the "Bill Cahir Memorial Fund" may be sent to:

Burke and Herbert Bank
c/o Mark Ragland
P.O. Box 268
Alexandria, VA 22313

Journalism's Loss: Bill Cahir, 40

2009-08-14T13:33:00.012-04:00

My friend and former Newhouse colleague Bill Cahir was killed by enemy fire yesterday while serving with the Marines in Afghanistan. Bill was just 40, and his wife Rene is pregnant with twin girls. Their loss is beyond my comprehension, and he leaves behind a wide circle of friends, including me, who can't fathom the fact that he no longer is with us.

Bill's obituaries in Politico, Politics Daily and one of his former papers, the Express-Times, reflect what a truly exceptional person I knew Bill to be. In this space, I'd like to remember his work as a journalist, which is how I got to know him.

Though Bill was young when we met in 2000, he was definitely from the old school - ask good questions, get the facts, talk to the other side and then crank it out. This was the hard work of journalism, but it was especially hard from Bill's vantage point as a D.C. correspondent. Bill reported for a handful of smaller Newhouse papers in southern New Jersey and southeastern Pennsylvania, and he took orders from a half-dozen bosses. It could be maddening. But he did it gladly. He loved journalism as its own reward, and he brought a humility and self-discipline to his work that have become exceedingly rare.

These days, some question whether the ideal of journalistic objectivity is possible or ever was. To doubters, I offer Bill's body of work. The writing never was flashy. More often, it was methodical and workmanlike. But it did exactly what it was supposed to do: It gave his readers fact and context they needed to stay informed and develop their own opinions. What you saw was what you got - again, a rarity these days. He had a down-to-earth clarity about his mission as a journalist that I often used as a sounding board for story ideas.

That clarity took him places many of us then at the Newhouse bureau never could have expected. When the attacks of Sept. 11, 2001, took place, we all filed our stories that day, as did Bill. But for Bill, the attacks became a calling beyond profession. Not long after that dreadful day, he decided to become a Marine. He enlisted at age 34, just months before the cutoff, and was off to Parris Island.

Bill stayed at our house for about a week after basic training, and we noticed the change in him. For one thing, he was louder - I guess from having drill sergeants yelling in his face. But he was ever more determined that this was the right path for him. And when we last talked at length, shortly before his announcement to run for Congress, I was surprised, but also not. He was unhappy with the conduct of the war, and he wanted to do something about it. This was Bill's new mission, and he was doing it his way - at the front line, working passionately and methodically.

My wife Susanna remarked today that after Bill's two previous tours in Iraq, we somehow assumed he would be safe. How could we? Maybe it was that determination and clarity of purpose - somehow we convinced ourselves that they would get him through. Or maybe we just didn't want to think about the hell that he had subjected himself to as a result of that determination and clarity.

Each of us is shaped by the people we meet and our experiences together, and a few are exceptional. As a reporter and as a person, Bill was one of the few. He showed us the value of being true to one's self and of living life with purpose and courage. That was Bill's gift, and I hope I'll carry it always.

Why NYT Co. Won't Give Up The Globe

2009-08-11T10:53:00.004-04:00

I drive a 1996 Honda Civic, and I love it. Why? It costs me virtually nothing. It gets 30 m.p.g., we paid it off years ago, and I carry no collision coverage. I could sell it, but I won't. It's running great, and it probably will last several more years.

What does this have to do with the New York Times Co. and its plan to sell the Boston Globe? One of three bids being considered would draw on the nonprofit sector. But for all the recent talk in Congress and other places of converting newspapers to nonprofits, there hasn't been much action. A look at the bidding for the Globe in light of my experience with my Honda might help explain why the nonprofit model isn't working for daily metro newspapers - and why newspaper owners are choosing instead to go with the death spiral.

The Globe does cost a lot more than my Honda to operate. But the really big bucks - the $1.1 billion purchase price - is money long since spent. Just like the cost of a new car bought 13 years ago, there's no way to recover anything close to the purchase price. I can tell by checking the Blue Book value.

The execs at the NYT Co. no doubt are learning a similar lesson after putting the Globe on the market recently.

The offer from Celtics co-owner Stephen Pagliuca and Partners HealthCare chairman Jack Connors proposed a “civic approach’’ that would involve a nonprofit foundation to help fund and run the news operation, according to a Globe report. No word on the financial terms.

Another, from the Beverly Hills buyout firm Platinum Equity, proposes a payment of $35 million and assumption of $59 million in liabilities for the Globe and associated properties in the New England Media Group, according to a report in the Los Angeles Times.

At first, I thought the LAT's numbers must have been mistaken - the $94 million value of the bid is less than 10 percent of the NYT's purchase price in 1993. But Platinum apparently was able to buy the San Diego Union Tribune for $50 million. So assuming for now that's what the market will bear, Platinum's offer carries an implied message to the NYT Co.: We bet you can't make the Globe produce profits worth more than $94 million any time in the forseeable future.

If I were at the NYT Co., I'd feel a bit insulted - and I'd start looking at the Globe the same way I look at my Honda. Sure, I could sell it for a couple thousand dollars. But it's worth more than that to me, even in its depreciated, degraded state.

So here's the question: What would it take for the Globe to generate profits that would be worth $94 million in today's dollars? A scenario based on data from the NYT's most recent 10-K report might help us see the Globe from the NYT Co.'s point of view.

Let's assume the worst - that Globe/NEMG revenues, which were $523 million in 2008, continue dropping 12 percent per year, and that the cost of capital comes at a usurious Carlos Slim rate of 12 percent per year. And let's assume a short-run time frame of five years. Even then, the Globe would have to eke out a relatively meager profit of less than 8 percent per year to do better than the Platinum bid.

Would that require more cost cutting? Probably. But the cuts almost certainly would be kinder than anything Platinum would impose. Suddenly, if I'm at the NYT Co., keeping the Globe doesn't seem like such a bad option - which is probably what the folks at Cox decided recently when they pulled the Austin American-Statesman from the auction block.

And why wouldn't the NYT Co. sell to the local guys who want to go nonprofit? It's essentially the same reason I don't donate my Honda to charity. I'm not planning to quit driving any time soon. And though the Honda might die in the next year or two, it probably won't. So even if it gets a few more dings and the hinky passenger window stops working, I'll keep driving it. When the wheels finally do come off, that's when I'll take my tax deduction.

See You at the Nieman Lab

2009-08-10T12:48:00.000-04:00

Starting this month, I'll be posting at least some of my reporting as a contributor to the blog at the Nieman Journalism Lab.

My thanks to Josh Benton and others at the lab for their confidence and support. I share the lab's interest in pursuing what works for journalism, and I'm looking forward to the collaboration.

Nonprofit Journalism: From Anomaly to Paradigm

2009-08-04T14:10:00.000-04:00

You can’t win if you don’t enter. Isn’t that the old slogan for the lottery?

So it is in the world of nonprofit journalism. This is an exciting, historic time, and new nonprofit newsrooms are launching every month. Each one represents a huge investment of hard work and professional will.

But the lottery metaphor comes into play here: A lot of them - probably most - ultimately are going to lose. There aren’t enough foundation dollars, personal donations or advertising links for them all to survive. It’s going to be painful to watch as some really talented journalists ultimately are forced to do something else to make a living.

But some will survive. And they might change the world – or at least how we report on it.

Who am I to say? It's hard to be certain of anything these days. But I have spent the past five years following journalism nonprofits, and I've spent the past five months covering them like a beat. I’m working on a master’s in nonprofit management at George Washington University, and this summer, I wrote a paper that attempted to provide some context for what’s going on in the nonprofit sector of journalism.

The paper is about 7,000 words and has 61 footnotes. But rather than impose any of that on anybody other than my graduate adviser, I thought it might be of some use to report what I actually learned from the experience. Here goes.

What makes the nonprofit model so compelling in these times? It’s the economics of the Web. Given the infinite capacity to replicate a story at a marginal cost of nearly zero, there really is no money to be made in doing expensive, risky journalism like the kind that comes from investigative desks, statehouse bureaus and foreign correspondents. Economics forces socially responsible journalism into the realm of the public good – the kind of thing that we value together as a society, but none of us is willing to pay for individually.

The knee-jerk response to the problem of a public good is to tax everybody and have the government pay for it – just like national defense. But I count myself among those who thinks that it’s deeply unwise to have government supporting newsrooms that should be scouring the records of government and the people who run it. Government support might be fine for PBS and other broadcast. But when it comes to old-fashioned investigative reporting, the potential for political shenanigans is just too great.

That leads us to the nonprofit model, where private-sector creativity meets social need. The model fits neatly into a world where journalism is a public good because it has a different bottom line. Nonprofits measure their success not by the revenues and profits they generate, but by yardsticks such as how many people read their work, the educational value of that work and the impact it has on decision-makers.

The nonprofit model also lets journalists come as close as any human can to establishing an island of credibility in a online sea of misinformation, disinformation and too much information. I’ve heard it said many times that in the online world, transparency is the new objectivity. So be it: The tax laws require nonprofits to disclose their major donors, and the good ones are taking disclosure to greater levels than that required by law.

Are there flaws? Absolutely.

We’re already seeing some sniping among the haves and have-nots, especially when it comes to foundation funding. Foundations like big names, and they don’t like failure. So in these circumstances, it’s a lot easier to write a big check to the News Hour than to go through the hard work of checking out the bona fides of a local online startup. Community foundations can help here, but the deck is stacked against the little guys.

By the same token, there also is talk that one of the high-profile start-ups in particular is “too big to fail” – meaning that there will be pressure not to compete for resources, especially at the national level.

Then there is the issue of gray areas where existing nonprofits – most likely, advocacy organizations – will start getting into the journalism business. This might not be so scary, as I learned in reading David Westphal’s paper from USC on the role of foundations. He talked to the folks at Human Rights Watch, who do painstaking investigations of abuses – and view the rules of journalism as a sloppy substitute for the kind of work they do. Likewise, the Kaiser Family Foundation created an advisory board of journalism luminaries to oversee the work produced by its new Kaiser Health News. But would the National Rifle Association or the AFL-CIO be as judicious?

I do think that a lot of the problems with the nonprofit model can be overcome. A group of nonprofits got together at the Rockefeller Foundation’s Pocantico estate in July and began the Nonprofit Investigative News Network, which will address standards, as questions of scale such as handling benefits and joint fundraising. To me, the “Pocantico Declaration” was the surest sign that the nonprofit model in journalism has entered a new era. As I say in the title of my paper, it’s no longer an anomaly; it’s becoming a paradigm.

But one criticism has stuck with me. It came from Ted Gup, incoming head of the journalism department at Emerson College and the man who taught me my first journalism class 24 years ago at Georgetown (where they had only one journalism class). Ted’s take is that the nonprofit model could create a new universe of sacred cows while leaving some vital topics uncovered. If newspapers come to rely on content produced by foundation-backed newsrooms, they will cede their ability to make independent judgments, he said. “It’s not Darth Vader; it’s also not Joan of Arc,” he said. “But we’ve got to be on guard. I worry about the slippery slope.” How to keep from skidding into that unknown, I cannot say.

Every journalism nonprofit is different. But there are some clear patterns and trajectories in the nonprofit model that are emerging. Chuck Lewis’ Center for Public Integrity, founded in 1989, proved that a newsroom could be built and fully maintained on foundation support. But new entrants realize that they can rely on foundations only as a start. Many are looking to the NPR or Minnesota Public Radio models for sustainability – build relationships with readers, but also look for ways to expand those relationships, maybe even in ways that create for-profit subsidiaries. Building on that general framework, I see three types of nonprofits in the offing:

Level 1: The true-blue journalists. These tend to be the folks who decided to launch an online startup after getting laid off from a newspaper. They think that if they can just start pumping out some really, really good stories that they couldn’t get into print when they still had newspaper jobs, some wealthy philanthropist will recognize their genius and start writing seven-figure checks. I know this type well because I used to be one of them – though I never got as far as launching my own Web site. If you’re reading this and saying to yourself, “That’s crap, I know I can beat the odds,” please take it from me: ProPublica’s $30 million from the Sandlers was a lightning strike. Maybe there will be a few more like it at the state and local level, but don’t expect the money spigots to open wide just because you can report and write.

Level 2: The relationship builders. These are the folks who know that the key to sustaining themselves is building lasting relationships with readers – and teaching them to see value in the relationship, not just in the news product. That’s one of the main reasons, I think, that newspapers are having such a hard time with the idea of converting to a nonprofit model: Although the people who run newspapers know that many subscribers feel a strong bond with their product, at the end of the day, it’s still a product like a favorite beer. The harder thing to do is to show readers how journalism connects friends, neighborhoods, communities and, ultimately, a society. At that point, a donation takes on a whole new meaning – it’s a statement of a reader’s values and connection to the world around him/her. It’s nothing less than an affirmation of self. But again, that takes a lot of hard work – and even then, it might not be enough for the long haul.

Level 3: The value adders. These are the ones who get the relationship part, but also know that they need a solid business proposition to support what they’re doing. What does that look like? It takes finding an audience that recognizes the enormous societal value in investigative and watchdog journalism – and is willing to pay at least something to get it. The natural audience here, of course, is the lobbyist. To see what I mean, look at what venture capitalist John Thornton is doing in Austin, Texas. He’s building his nonprofit Texas Tribune on top of the subscription base of Texas Weekly, an online, subscription newsletter on Texas statehouse politics that he bought last month.

So what happens to daily newspapers? Some are having success partnering with nonprofits. The Washington Post, for instance, in one week ran three front-page stories with assists from ProPublica. But can the nonprofit model save any of them? I'm not so sure. It’s not that endowing a major newsroom would cost so much – it would; think billions – but the economics are forcing newspapers to dig their own graves. The assets of most newspapers have become so devalued that their owners do better to continue cutting staff and circulation just enough to eke out some profit. It’s a death spiral, but the gravitational pull is too strong to get out. When I think about the future of newspapers, I think about the freebie “Express” I am handed whenever I get on the Metro.

Will the nonprofit model save journalism? Maybe not exactly in the form that we know it today. But I think it can help - in part because the model also has its own gravitational pull. Back in 1846, a handful of New York newspapers realized they all were spending way too much money to have news couriered from the front of the Mexican-American War. So they got together and created a cooperative that today is known as the Associated Press, a nonprofit. The need to cooperate on some level is the same today.

I also see the the power of the nonprofit model in places where detractors might least suspect. Just this May, in a new article entitled "Hired News" in Reason, the leading libertarian magazine, author Tim Cavanaugh argued that the demise of newspapers isn’t such a bad thing because public relations professionals are taking over where investigative journalists are leaving off. He wrote:

Flackery requires putting together credible narratives from pools of verifiable data. This activity is not categorically different from journalism. ... Communications is a highly competitive environment, and it is becoming more competitive. Frequently the most valuable information comes out just because somebody wants to make somebody else look bad.

As I said at the time, this is an argument from the Stone Age. Cavanaugh in essence argues that if two people are able to throw rocks at each other, it's a fair fight, and that's all society owes its members. But the fact that he chose to make his argument in a magazine owned by a 501(c)3 nonprofit underscores exactly why society benefits from thriving alternatives to for-profit journalism. By its very appearance, his article proves that the nonprofit model is here to stay.

The Death of Journalism (Gawker Edition)

2009-08-02T18:18:00.000-04:00

For those who don't regularly read The Washington Post, it's worth a visit to the Outlook section and a piece entitled "The Death of Journalism (Gawker Edition)" by Ian Shapira. It's a first-person tale of how online aggregators siphon content from publications that pay people to do the hard work of journalism.

It's also a lesson in economics. Following on my own comments from Friday, this story shows exactly why socially responsible journalism that requires initiative or enterprise ultimately is rendered an unprofitable investment for the organization that produced it - and, again, why socially responsible journalism is becoming exposed as a public good.

What's worse is that when you read this story, you can see how the news-production model that has helped sustain our democracy for a century (I know I'll get an argument on that premise, but let's just assume it is valid) is crumbling by the day - and how some people who call themselves journalists are helping.

When Shapira relayed his conversation with the Gawker reporter, I was reminded of the timeless quote from Joseph Stalin: "When we hang the capitalists, they will sell us the rope."

Good Journalism is a Public Good

2009-07-31T13:53:00.000-04:00

I've just finished reading two posts of great interest to those of us following the nonprofit model in journalism: TechCrunch's Michael Arrington on a "New New York Times" and John Thornton's response on his blog Insomniactive, arguing for a nonprofit solution.

The upshot of Arrington's piece is that the best 10 percent of reporters and editors at the NYT - the really good ones - should pack their desks, start their own news site, get funding from venture capitalists and then make a profit doing the kind of socially responsible journalism we expect from the NYT.

John's point is that when left to the for-profit model, the good stuff almost always loses out - as he says, it means "deciding between keeping the Baghdad bureau open and keeping up with TMZ." It's not going to work as a for-profit venture. And John should know - he's a venture capitalist.

No two ways around it. Socially responsible journalism - everything from investigating WMD to explaining healthcare reform - is a public good. It's a lot like national defense. Everybody needs it, but not everybody wants to pay for it.

This is not to say that every for-profit news organization will abandon a social mission. But if you don't like the idea of the government subsidizing journalism - and there are a lot of good reasons not to - that leaves you with the nonprofit sector to help get us out of the fine mess we're in.

Take it from Eric Schmidt, the CEO of Google, which has done more than anybody to demolish the newspaper business model. It was a year ago today at an Advertising Age conference where he famously lamented the decline of investigative journalism. Schmidt called the state of affairs "a tragedy for America," and said, "I'm very worried about it."

Google still hasn't done a thing to help remedy the problem. But that's another post.

Resource: GreatNonprofits.org

2009-07-28T15:35:00.000-04:00

Here's a tip for nonprofit journalists trying to expand their donor bases - and who isn't these days? A relatively new outfit called GreatNonprofits has positioned itself as a kind of social network for people interested in the nonprofit sector - "a place to find, review, and talk about great - and perhaps not so great - nonprofits," as the group's Web site explains.

Here's how it works: The site, which pulls data from GuideStar, automatically generates a profile for every 501(c)3 registered with the IRS. It has a search function that lets you look up nonprofits by sector or by name, and then captures your review. Based on all reviews, it assigns a rating on a five-star scale.

Not surprisingly, most of the reviews are positive and the ratings are high. But while the site might serve as a check on bad actors, its primary purpose is to give high-functioning nonprofits a place to let fans tell their stories - and then use the collected testimonial as a resource for fundraising and other development. As marketing and outreach director Shari Ilsen explains in a short video, the goal is to help nonprofits raise their profiles within their communities. "It's just a wonderful resource for free marketing," she said.

There are profiles for most of the journalism nonprofits you might think of. The search function didn't have journalism listed among its approximately has about two dozen categories. But Shari told me in an email today that she would add one.

GreatNonprofits is headed by Perla Ni, former publisher of the Stanford Social Innovation Review, who developed the idea following Hurricane Katrina in 2005. Her staff wanted to do a story about the nonprofit sector's response, but could not find a reliable source of information about nonprofits that had descended upon New Orleans in the wake of the storm.

The Importance of Relationships

2009-07-24T16:04:00.001-04:00

At a panel discussion Friday hosted by Justice at Stake, I was struck again by the importance of relationships with readers as the digital revolution re-writes the rules for newsgathering.

A couple of my co-panelists touched on two important aspects of the changing relationship that ultimately will determine whether nonprofits, especially smaller niche players, will survive for the long haul.

Jason Barnett (no relation, but he seems to be a stand-up guy) of The UpTake stressed the importance of maintaining a dialogue with readers. If a reader tweets The UpTake, The UpTake tweets back. "It does take a lot of time, but that's the way the world is going to be," he said. "You can't just push your information out."

Now, the money part. The relationships built with that kind of effort have to translate to a sustainable level of support from readers.

Another of my co-panelists, Blake de Pastino, of the Center for Independent Media offered a related thought: Someday, he'd like to have a button next to each story that allows readers to make a contribution if they liked it.

What Blake didn't say (but I think is implied) is that readers are more likely to contribute money to a story to which they also have contributed ideas - or a story that expresses a similar thought they had while driving or in the shower.

So here's the key for nonprofits doing journalism: The social value that readers place in relationships with their news sources is, to some extent, taking the place of the cold economic value that newspaper readers once created by paying for subscriptions.

The problem may be that the new model goes only so far. One of the startups most attuned to the power of relationships with readers is Voice of San Diego. But the good folks at VOSD know that it's not enough. In an interview with CUNY's News Innovation, editor Matthew Donohue says he is considering syndication, paid obituaries and for-hire reporting.

Texas Tribune on the Move

2009-07-23T14:43:00.000-04:00

Texas Tribune, the online startup being created by Austin venture capitalist John Thornton, has had a busy week in preparation for its planned fall launch.

Last Friday, it announced that it had hired Evan Smith from the highly regarded Texas Monthly. Smith will serve as CEO of the Tribune.

On Thursday, the Tribune announced that it would buy Texas Weekly, an online, subscription newsletter on Texas statehouse politics. The weekly's editor, Ross Ramsey, will be the Tribune's managing editor. The announcement also includes bios on the Tribune's first five reporting hires.

A couple of things are noteworthy about these moves.

One is the quality of the journalists that the Tribune has been able to attract. In addition to Smith and Ramsey, the five reporters named to the Tribune's staff have top-notch resumes; most are veteran reporters leaving well known publications, including some of Texas' biggest daily newspapers. All due respect to the Tribune, but this speaks as much to journalists' rapidly changing view of newspapers as premier career destinations. Reporters want to work for news organizations that their sources and subjects respect, if not fear, and where they will be treated well. This is a professional flight to stability, and ultimately, to quality.

The other is Thornton's decision to buy an existing, subscription-based product. The purchase solves one of his biggest concerns - how to build an audience - as the weekly gives him entree to the state's opinion leaders. While the Tribune is decidedly a nonprofit - Thornton speaks passionately about the need to separate God and Mammon - it also provides a model for generating revenues that can sustain the Tribune beyond its startup phase.

This is one to watch.

Silverton Saves Its Paper

2009-07-22T13:52:00.000-04:00

Here's one from the resourcefulness file:

When the chain that owned the Silverton, Colo., Standard newspaper announced it wanted to close, the editor and community leaders looked for help to keep it going - and got it from the nonprofit county historical society.

A mini-documentary video (about 7 minutes) about the sale of the paper is available here from the AARP Bulletin.

The NYT's Non-Salon Strategy

2009-07-20T13:10:00.000-04:00

I've read and re-read Clark Hoyt's Public Editor piece in Sunday's New York Times several times now, and I keep coming away feeling like something big is missing. Some might call it a nut graf.

His column seems intended to explain why the Times is letting a freelancer use its name to solicit support on Spot.Us for a story about the Great Pacific Garbage Patch. Hoyt suggests that the collaboration is part of a broader trend among newspapers to seek outside support for newsgathering costs.

Hoyt then outlines what is clearly a deliberate strategy of partnering with the nonprofit sector, though he never says as much. In addition to the Spot.Us example, Hoyt also discusses the possibility of soliciting philanthropic support for the Times' science coverage, and he trumpets work done with ProPublica. But he never ties them together for us. When I'm done reading the piece, I'm still dying to know why the Times has chosen this path - what are the pros, the cons, the unknowns? Somebody somewhere in the Times' management must have had this kind of discussion. At least I hope they have.

Instead, Hoyt casts the Times' actions against those of The Washington Post and its marketing department's misbegotten plan to host pricey, off-the-record salons for lobbyists, administration officials and reporters. Why go there? It comes off as petty. And by implication, it puts the Times' nonprofit partnerships in the same basket of "new relationships" as the salon fiasco.

NYT Rules Out Nonprofit Status

2009-07-18T16:57:00.000-04:00

Poynter Online's Bill Mitchell has a new post in which he reports that the New York Times is considering taking foundation support to help underwrite some of its news-gathering costs - presumably stories that require extensive travel or investigative resources.

But the big news from Mitchell's interview with Times AME/standards editor Craig Whitney may have been buried in the seventh graf, where Whitney flatly rules out the idea of converting the Times into a nonprofit corporation of some sort. The Times has "no desire to become a nonprofit corporation," Mitchell quotes Whitney as saying.

This is news because no small amount of time and energy has gone into analyzing how the Times and the Times-owned Boston Globe might make the leap from for-profit to nonprofit status. Perhaps the most thorough examination was conducted by Penny Abernathy of UNC-Chapel Hill. Her paper, presented at a conference at Duke University in May, lays out four potential paths for the Times - all of which have significant downsides.

Whitney's statement - which I take as an accurate reflection of the Times' ownership view - underscores the difficulty of applying new operating rules to an old business. I think it also provides fresh proof that newspaper owners, no matter how well intentioned, feel compelled to harvest what profits they can by cutting, cutting, cutting utnil there's nothing left to cut.

But at the same time, Whtiney's statement does highlight the potential for newspapers to help create hybrid business models that allow them to do the enterprise and investigative reporting that is vanishing with every newsroom layoff. Will hybrids solve all of the newspaper industry's problems? Of course not. But they might help them preserve journalistic capacity until a sustainable model can emerge.

Foundations and Healthcare Journalism

2009-07-15T22:52:00.000-04:00

I'm sorry I missed it when it came out last month, but there's a really good new paper from Harvard's Shorenstein Center that examines the potential for conflict when foundations throw financial assistance behind reporting on health care.

The paper by Maralee Schwartz spends a lot of time on Kaiser Health News, which was launched in June by the Kaiser Family Foundation. Schwartz talks to many of the parties involved in the creation and oversight of KHN, as well as editors at its biggest partner, The Washington Post.

Written in a journalistic style, the paper allays potential concerns about the relationship between foundation and news service and documents the care that foundation leaders exercised in establishing the news service's independence and credibility. In an interview with Poynter Online, Schwartz said she began her study skeptical of the relationship. But by the time she had completed her work, she told Poynter, "I can't tell you how surprisingly comfortable I became with it in the end."

I have to say, I had a similar experience. Before I met foundation SVP Matt James in January, I thought the news service would be a weak substitute for real journalism. As James says in his elevator speech, they do mostly explanatory journalism - no "gotcha" - so I wondered if their work could have teeth. But I was persuaded that everything they do to cover news would be SOP in any major newspaper's newsroom.

This is not to say the job of avoiding conflict is a one-time proposition. Schwartz includes in her paper the opinions and observations from some of journalism's leading lights, and one in particular struck me. It came from Ted Gup, the incoming head of the journalism department at Emerson College. Gup worries not so much about the relationship between foundation and news service, but the relationship between news service and client. As Schwartz reports:

“The exigencies of circumstance can compromise standards,” said Ted Gup, a former journalist and recently named chair of the journalism department at Emerson College. “Part of my concern is not just that some of these sources have agendas, but that the mere availability of content may skew coverage.”

The deployment of declining resources reflects what people want to know versus what they need to know, Gup continued. “We can’t have what we cover defined by the charity or magnanimity of others. It has to be defined by all of society’s vulnerabilities.” Gup said he also worries that dependence on free content will lead to an erosion of reporting and a failure of journalists to keep abreast of what is happening, leaving the public at risk. He pointed to the Bernard Madoff scandal as an example. “Editing is not the same as generating — the system atrophies.”

Gup has a good point. But those are problems that also may be overcome. As Schwartz's paper notes, there is a great opportunity for foundations to support specialty journalism, and we're likely to see more. We should hope that others take the same care as the Kaiser Foundation.

A Second Great Age of Patronage

2009-07-14T21:08:00.000-04:00

Clay Shirky, the NYU prof and journalism's Nostradamus, has a wonderful essay in the Cato Institute's online magazine that lays out the implications of how the subsidization of journalism is changing the craft in ways we won't fully understand for decades to come.

Some of his most tantalizing insight touches on the nonprofit model and the impact that nonprofits can have in the chaos that will follow the demise of newspapers. Please do read the entire essay. But here's a shortcut to the most salient bit, which follows his prediction of a "second great age of patronage":

In an age where the cost of making things public has fallen precipitously, patronage models suddenly look not just viable but eminently reproducible. The leverage to be gotten from motivations other than profit is now growing rather than shrinking; a poorly capitalized journalistic weblog is now likelier to reach a million readers than a well-funded but traditional journalistic outfit is.

Is this a good thing? A bad thing? Herein lies the Shirky genius. He doesn't tell us. And the difficult truth is that we have no way of knowing. Clearly, he sees a world in which the Rockefellers, Carnegies and Fords have an opportunity to preserve socially responsible journalism - or corrupt it into something that serves their own vision of truth, however worthy or not.

The lesson here, of course, is that the future of socially responsible journalism remains in the hands of those who care most about it. From the Medicis on down, patronage has had its pros and its cons. It's up to the practitioners to draw the ethical boundaries.

The Council on Foreign Relations Model

2009-07-12T22:12:00.000-04:00

I had a chance recently to chat with Penny Abernathy, the UNC-Chapel Hill professor who recently presented a paper on four nonprofit models for The New York Times. The paper, for those who haven't read it, presents itself modestly, but is nothing short of a roadmap to survival for newspapers that take investigative and watchdog reporting seriously.

Abernathy spent her early career as a reporter, and it shows: Her paper, presented at a conference at Duke University, is scrupulously evenhanded, and it's nearly impossible to tell which if any of the four models she presents she likes or dislikes. But as we talked, it became clear she sees great promise in a nonprofit model for newspapers based on the Council on Foreign Relations, the venerable New York think tank.

The way Abernathy sees it, a CFR-type nonprofit could be set up by a handful of major newspapers as a home for topic-expert reporters who would share their work across media. Rather than limiting them to one venue - the newspaper - the nonprofit could continue to employ them as they move from breaking news to magazine-style story to published book - collecting revenue all along the way. And like CFR, the nonprofit could host conferences and pull in corporate sponsorships as well.

To be clear, Abernathy did not single out this as a solution to the challenges faced by the Times. The hardest part about getting newspapers on board is getting their editors to stop thinking in terms of scoops and exclusives, she said. "They're still thinking the old way," she said.