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March 5, 2018, 10:04 a.m.
Business Models

Could local news driven by residents who pay fees in a special service district…work?

It’s how many communities fund libraries, build airports, or pay for hospitals. Could it also pay for local news?

Lots of schemes to save local journalism have been suggested, and whether or not many of them will pan out is still unclear. (Blockchain, anyone?) Here’s one more to add to the mix: “community information districts,” special service districts with community-driven fees levied on a certain area to power local journalism in a continual feedback loop.

“The how-to of all of this exists. We know how to make community, we know how to do great journalism, we know how to provide for local news and information needs. The one thing we don’t have is the funding model to make that happen,” said Simon Galperin, a media consultant with experience at GroundSource and Opinary who is spearheading the Community Information Cooperative behind the info district idea.

Galperin first sketched out the idea while a student in CUNY’s social journalism master’s program. He had attended Rutgers University for his undergraduate degree, which funded its student newspaper through a $10.75 per-student, per-semester fee. “I got thinking about how that can be a really effective funding mechanism. How can we apply that to local communities, where the structure of a university just isn’t there?” Galperin said.

To be clear: This wouldn’t be an opt-in situation. The mindset of the Community Information Cooperative is to provide the tools to communities (of any size or definition) to develop a district in their own local government area by democratically lobbying for its creation. The model is set up so that a fee levied on residents — analogous to regular fees for public services such as fire protection, water, sanitation, or business improvement districts in local areas today — within a certain area would allow the community to essentially self-fund their own local reporters, in a more direct way than funding public media like PBS or NPR, for example. (There are more than 33,000 service districts across the U.S., and the bureaucracy of such districts has been lampooned in a Last Week Tonight segment.) A community info district is a multi-faceted idea, and we’ll dig into some of the concerns and aspirations for it. But first: the funding.

After many thoughts, conversations, and design processes, Galperin officially launched the Kickstarter on February 15. It recently reached the $2,000 goal for seed funding with 42 donors, essentially enough to register the organization as a nonprofit and get the legal details of setting up an info district underway. (“Before I can raise $1 million, I need to raise $2,000,” he said.) Now with the Kickstarter bar raised to $7,000, the next goal is funding market research with the Center for Cooperative Media at Montclair State University, Sustainable Jersey, and Free Press News Voices and potentially launching the first info district in New Jersey in 2019. (They’ve attended community forums there and Galperin was raised in Fair Lawn, N.J., in addition to having the research partners based there.)

So, what would a community information district look like in action? Galperin says that is fully up to the community the district would cover; he just wants to do the legwork to give communities the option for it. He wrote for the Columbia Journalism Review last summer:

My hometown of Fair Lawn, New Jersey, has a population of 32,000 people. An annual $40 contribution per household could deliver a $500,000 operating budget to a newsroom devoted to understanding and serving the local news and information needs of its community.

That budget could support print or online newspapers, or livestreaming town council meetings. A special service district for local journalism could convene community forums or media literacy classes, launch a text message and email alert system, or pay for chatbots that answer locally relevant questions, like “Is alternate side parking in effect?”

Each community could shape its own information district through a needs assessment or a targeted engagement campaign. To prevent political interference, a board of trustees made up of residents and community stakeholders, could oversee their local CiD. Communities could allocate funding through a participatory budgeting process, and hold regular referendums to determine whether or not it should reauthorize the CiD.

“As much of the editorial process and agenda that could be driven by the community should be,” Galperin said. A more specific example: “With a half a million operating budget, that’s three to four reporters with an events budget and a community engagement budget. I always imagined that it would be an approach of we have a reporter always canvassing, going around and knocking on doors, saying, ‘Hey, I’m your local reporter, what do you guys need, what are your info needs?'” He emphasized transparency, accountability, and creativity in journalism as main principles.

“These are all things that people know and want and can create themselves. These aren’t new ideas. The new idea is the funding model,” he added.

But the new idea also brings up some old issues. Even if every community were interested in such a district, low-income areas would be far less able to fund local journalism than wealthier areas. There’s the obvious question of potential government interference in the collection and distribution of the funds and information. (Who’d hire those reporters?) And existing local news publications who have built their revenue models off of other resources, such as advertising or philanthropy, might raise reasonable objections to this new competitor.

Galperin reinforced that a community info district is not for everyone and is not intended to be built on a community that doesn’t want it. But for lower income areas, he said, maybe they could band together with neighboring communities to pool their resources — the Cooperative isn’t defining “community” by any particular geography, so it could be a neighborhood or a county, for example. (Then you might hit problems of scale, though…but that’s why this idea is a work in progress.) “An info district can exist in a place that ultimately has enough of a tax base to support it. The question of population is so important,” he said. Alternatively, with residents’ fees powering journalism in some areas, foundations could hypothetically refocus their efforts within the communities of greatest need.

For the government question, the special service districts could be set up with an independent nonprofit board of directors overseeing the funds, meaning that the money collected for the district is not required to pass through the governing body’s general fund — and perhaps a reporter working for the district would be able to uncover potential political abuse of that structure, Galperin said. “The community runs this thing, rather than the government running this thing,” he added. “The benefit of the process is that we get to design to solve those questions.” And for existing local news organizations?

“Do you serve the local news and information needs of your community? That question means two things for existing providers,” Galperin said. “If you are serving the local info needs of your community effectively and you also have a commercial enterprise to do that, then one could argue that in this case the market works. People’s news and info needs are being met by your journalism business and an information district might not be necessary. Or, it might be necessary, if your local news and information services are not meeting the needs of your community. You can reform, you can adapt and begin to let your community drive your editorial agenda, become hyper-transparent…about prioritizing trust over profit…We want to create frameworks that communities [can] follow but not follow to the letter for different needs in different places.”

Galperin is working with Center for Cooperative Media associate director Joe Amditis and media and civic engagement consultant Chris Satullo, formerly of WHYY and The Philadelphia Inquirer to develop the idea.

Galperin could be considered an idealist, especially when it comes to journalism and democracy. (“The point of an info district it to create more civically engaged communities. It’s about bridging the gap between democracy and journalism,” he said. “If they moved to cut funding or close down the special service district, the idea is, at least, that that is a moment in which people’s democratic opportunities are being taken away and they will rise up against that.”) But he has received a pledge of $2,000 from an anonymous donor if Galperin crowdfunds $3,000 more, and he has several creative journalism thinkers on his advisory board helping him to refine the idea, such as Jennifer Brandel, Heather Bryant, and André Natta.

The goal for the project at the Center for Cooperative Media is “to help test the idea of community information district out in a few New Jersey communities,” said Stefanie Murray, the center’s director and a former business reporter who has covered special service districts before. “I am very familiar with all the politics involved in setting one up, and how complicated they can get. My initial reaction was that it was a fantastic idea, but one that will likely take root only in certain communities in the U.S. that are open to the idea of adding this cost, open to the idea of creating an entity to manage it, and open to the idea of directly supporting an independent press via tax dollars.”

Still, Murray sees opportunity: “I think, done well, a community information district could really help improve trust between journalists and community members in the cities where such districts are set up, because I think these districts will require absolute transparency and a lot of engagement from residents in order to be successful,” she added.

Galperin calculates that in four to seven years (or after 20 info districts are established), the Cooperative will be self-sustaining and philanthropic/crowdfunded support will no longer be needed. “The idea here is as info districts grow and develop, they have the ability to pay into the Community Information Cooperative,” he said. “It would serve the same role as a parent news organization, so we’d provide accounting, fiscal sponsorship…[and] provide the support to maintain a really effective, targeted local newsroom.”

That is, of course, if all the what-ifs pan out — and if there actually are any communities with a critical mass of residents willing to see that extra charge on their tax bills. But here’s an optimistic closing thought from Galperin:

“I think this is the next step. I think about localizing funding this way — saying that it’s small towns and districts in large cities who come together to say: ‘We need this thing, let’s fund this thing’ — I think that will be a very meaningful change in fabric of our society.”

Photo of a neighborhood in Newport Beach, Calif., by Derek Liang.

POSTED     March 5, 2018, 10:04 a.m.
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