Schiller: "A Concrete And Hopeful Message"

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

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

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

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

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

"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.