Hellman's $5 Million For Bay Area Nonprofit

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

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

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.

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

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

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

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

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

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.