Who Will Pay the Messengers? Non-profit and Foundation-funded Models, 11:15 – 12:45 PM
by admin | November 14, 2009 | Uncategorized | Comments Off
Greetings and salutations. This panel, moderated by Douglas Rand, will discuss the role of not-for-profit models and funding in the emerging ecology of news. The panelists are:
David Westphal, USC Annenberg
Bill Buzenberg, Center for Public Integrity
Robert Lang, Mannweiler Foundation
Patrick Kabat, Yale ISP
Nabiha Syed, Yale ISP
James Cutie, Connecticut News Project
Doug Rand: A conversation about the past, present and future of philanthropic funding in journalism.
David Westphal: This is a period of rapid change in world of non-profit news. Projects such as Voice of San Diego have captured mainstream attention (and in mainstream media). Community news sites are one center of gravity in non-profit journalism; investigative journalism is another, even at the local level. Non-news organizations, including established NGOs like Human Rights Watch as well as universities, are operating substantial newsrooms.
Why are so many going into non-profit journalism? First of all, they can; barriers to entry are very low. It’s an appealing endeavor for both out-of-work and aspiring journalists. And individual philanthropists perceive the need to sustain original news reporting.
What’s not to like about this model? First, is it sustainable — what happens when foundation money runs out? Second, will non-profits prove adaptable enough for a mercurial market? And lastly, good intentions aside, are these philanthropists impeding the emergence of market solutions?
One key to understanding philanthropic interest and activity is that we simply don’t know what the news environment is going to look like in five or ten years; it’s fair to wonder whether in the short term the market can produce the news we need. Another is that non-profit journalism offers an outlet for people and institutions which have sought a voice but didn’t have one in the old world of news production. Investigative work by unions such as SEIU offers an excellent example: we’re increasingly going to see non-news organizations moving into news productions. This is one answer to the question of who is going to pay for news, though this may be supplemental to a core of professional journalism.
Bill Buzenberg: CPI is 20 years old, and clearly the ecosystem is changing; new models of collaboration are certainly possible; but people may not understand how much work is involved in doing investigative journalism.
List of where CPI reports have shown up in last month: BBC, CBS, Daily Telegraph, Google News, Politico, Reuters, AP, TPM, Yahoo News, Sean Hannity, and on and on and on. This is the new ecosystem: There’s a void in investigative journalism, and CPI exists to fill it. You may not know CPI but you know their work — from the Lincoln bedroom story under Clinton, to Halliburton exposes during the Iraq war, to establishing which companies were responsible for the financial meltdown. Much more work forthcoming on this front to show city by city who were the worst predatory lenders. Another ongoing story: the Murtha ethics investigation, which used database journalism to reveal revolving door between congressional staffers and military contractors.
Another endeavor: ICIJ, network of investigative journalists around the world. For instance, exploring illegal tobacco trade, identified factories in Russia, China, Paraguay; stories ran in papers around the globe, also produced ebook version.
Another project: ujima.project.org, collecting UN data on arms sales and aid flows across Africa; data provided to regional journalists; similar projects in Asia, Latin America.
Tranparency is the new accountability, but it takes work.
Domestically, many projects afoot; for instance have sued federal government to uncover “medicare millionaires,” which may result in investigations at the state level. Another project, “states of disclosure”; comparing ethics laws state by state. 24 states have changed ethics laws since project began.
Now on to revenue — this isn’t cheap! Take money from foundations, from individuals; seeking paying relationships with news outlets, though this is proving difficult; 30 to 35 people at the Center, which requires a lot of funding. Center has been sued 3 times for libel, always won, but costs millions; 5 law firms offer pro bono services.
The goal is to keep creating this value — somehow we’ll figure out how to pay for it!
Robert Lang: Only $40b given out in nonprofit sector every year; by comparison private equity adds up to $60 trillion. Private money has to come back into the equation. Consider small counties which are neglected by high-profile philanthropic efforts — who’s going to pay for journalism there?
One answer is a hybrid vehicle, the L3C: low-profit limited liability company. Offers a for-profit vehicle which can draw on private equity pool, but on modified terms: the mission comes before the profit. Foundation money can also play a role in these companies: foundations can invest in for-profits if they also have a non-profit mission, and as long as they’re not engaged in lobbying, more about which later.
This inverts the normal investment scheme for venture capital: VCs will provide money at a fairly low rate of return, in a way that greatly stabilizes the entire endeavor and sustains news for small communities. What you need is patient capital to provide the necessary journalism during this period of transition. The L3C structure allows for different sorts of stakeholders to offer different kinds of support on customized terms. Crucially, this hybrid model preserves a role for advertisers, who are a critical element in local journalism and in small communities.
On the question of the ban on lobbying by non-profits: A project is afoot to redefine newspaper editorializing as falling outside of the definition of lobbying, which would permit newspapers to tap into non-profit funding more easily.
Patrick Kabat: We talk a lot about what markets do well and what they do poorly, about market failure; he and Nabiha will talk about one component of the emerging nonprofit role, the protection and pursuit of “press entitlements.”
The press traditionally stands in for the public’s right of access to information and documents, a long history of jurisprudence establishes this. However local enforcement of press entitlements is eroding along with the revenue base for local journalism; there’s a shortage of capable litigants to pursue press entitlements. Meanwhile, new questions of law are presented by emerging technology.
We’ve always gambled that newspapers would pay for the pursuit of press entitlements, that they would the the litigants of last resort. That gamble is especially dangerous today.
One way to address this is via transparency, via new norms and procedures for making public information available, but this will always fall short. There will always be a need for lawyers to pursue public information. Not-for-profits are perfectly positioned to address this need, to pay for the lawyers who will pursue public information.
Nabiha Syed: Taking the baton from Patrick: a new clinic at Yale provides legal services and support to journalists in pursuit of public information. The volume of work even after a few weeks has been tremendous.
However in some cases journalists haven’t come knocking yet — is it the lawyers’ (or the law students’) role to anticipate issues of importance, to go after public information, and to begin to expose controversies, even before reporters are writing about them? This question demands scrutiny.
James Cutie: The Connecticut News Project will launch publicly in January of 2010. As a veteran of the private equity world he can confirm that the amount of money available is vast. Even on the business side, he has a journalistic sensibility: The always-difficult relationship between the business and editorial sides of news is even more perilous in this new environment and will need to be tested and rethought, though journalism may emerge stronger as a result.
He has been in the media business for 35 years; here are three general observations. 1) At the heart of this discussion over journalism is the well being of democracy itself. 2) The conversation about the future of journalism is itself a democratic one, one which will hear from many voices and see many experiments, and won’t be over anytime soon. 3) Good journalism is a smart business strategy and worthy of long-term investment. Successful journalistic start-ups tend to be driven by passion rather than by an exit strategy.
The CNP will try to reflect all three of these lessons. The CNP is a non-profit, independent journalistic outlet aiming to provide the news and information and opinion critical to the exercise of democracy in Connecticut. A combination of original reporting, links to outside work, and links to original documents; the goal is to increase transparency and accountability for all branches of Connecticut government.
While the website is the flagship, the CNP is not burdened with the advertiser model and can push content to outside partners and platforms, including community organizations and other news outlets.
Key partnerships are with universities and with journalism schools; the CNP will also run an outreach program to mentor (aspiring journalists?) across the state. Funding from private foundations and individual contributions, but eventually also from syndication.
The mission is to remind CT residents that what their representatives do in Hartford and Washington has direct a impact on their lives, and to give them the information needed to hold those representatives accountable.
Questions and answers:
Q1: Do we think that going forward the new models will be sufficient to cover state and local government? Will they do a better or worse job than what we’ve had?
Lang: Accountability will be stronger in a nonprofit world, because there’s less concern for building an audience.
Buzenberg: We don’t and can’t know. It’ll take a lot of foundations and a lot of money to fill the gap.
Kabat: In addition to accountability reporting, we’ll see a lot more advocacy and issue-oriented reporting, unconventional forms of reporting. For instance prosecutors’ offices are essentially newsrooms, and can contribute to the information ecology.
Syed: There’s no shortage of students, and not just journalism students, who will be interested in doing the work of holding government accountable.
Westphal: Some expect a flourishing of corruption. However, we’ll see many different approaches — accountability reporting will be done at much smaller scales than it has in the past, so the potential is there for a richer ecology of accountability.
Cutie: There’s a finite number of actors in a state such as CT, and partnerships will be crucial to doing what’s needed.
Q2: What will hiring practices be like at new endeavors such as CNP? Aren’t different skills necessary than in traditional newsrooms?
Cutie: A diversity of backgrounds and experience is essential. Internships and fellowships play an important role. And CNP’s content will be distributed and developed beyond the newsroom, not locked down. Give me your business cards! We’re focused on the quality of the journalism.
Q3, for Bill Buzenberg: Are you aware of NYT’s DocumentCloud effort, in partnership with ProPublica?
Buzenberg: We’re part of it. CPI’s new initiatives may tie into that as well.
Q4: What about competition with other foundation priorities? Why should a foundation support an ephemeral activity like news, at the expense of its anti-poverty programs for instance?
Buzenberg: It’s not either-or. In fact supporting journalism about an under-covered issue may lead to public action, remedies, solutions.
Lang: It’s true, there’s not unlimited money in the foundation world. That’s why news projects need to use as little of that money as possible, and not to become dependent upon it, because foundations get funding fatigue. You don’t want the smartest person in your organization to be dedicated to raising money.
Westphal: You can make a big difference in non-profit journalism with a fairly small investment, which may appeal to funders who want to make a name for themselves.
Cutie: Good journalism covering the capital, covering schools, etc., really drives and affects public action. Well-articulated, there’s a direct correlation between journalism and traditional foundation missions.
Kabat: Education is the most secure sector in the foundation world, and it’s not too difficult to couch news non-profits in the language of an educational mission.
Q5: The role of universities in journalism will be an increasingly important question — witness the ongoing controversy over the Innocence Project. A mini-conference about this is in the works for the AEJMC annual conference slated for early August, 2010, in Denver. Leonard Witt of the Center for Sustainable Journalism invites queries at lwitt@kennesaw.edu.
Q6: Chitown Daily News failed because it didn’t become sustainable — what are the lessons to draw from its experience?
Westphal: It was a simple matter of not coming up with the transition plan to sustainability. The founder’s own conclusion was that he needed to scale up more quickly and effectively than he was able to.
Lang: There’s a new group in Chicago that’s going to reproduce Chitown’s mission, but as an L3C, precisely in order to better manage that path to sustainability.
Applause! Thanks to all for participating and listening; we’re off to lunch.
