How two nonprofits saw the path to sustainability in 2009

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: Read more

Jim Barnett | Jan. 25 | 3:39 p.m.

Tags: advertising, business model, fundraising, Joel Kramer, John Thornton, MinnPost, nonprofit, sustainability, Texas Tribune

A new convert to nonprofit journalism out west?

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: Read more

Jim Barnett | Jan. 22 | 12:01 p.m.

Tags: Bay Area News Project, Industry Standard, Lisa Frazier, MinnPost, NewWest, nonprofit, Paul Steiger, Philip Meyer, ProPublica, Texas Tribune, venture capital, Voice of San Diego, Warren Hellman

The FCC’s future of media project

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? Read more

Jim Barnett | Jan. 21 | 2:14 p.m.

Tags: FCC, government subsidy, nonprofit

A cautionary tale: The Fiscal Times and Washington Post

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? Read more

Jim Barnett | Jan. 11 | 10 a.m.

Tags: Center for American Progress, Concord Coalition, credibility, Eric Pianin, Fiscal Times, Herbert and Marion Sandler, ideology, nonprofit, Peter Peterson, Peterson Foundation, political reporting, ProPublica, Washington Post

“Integrating” news and advertising

At first, I was horrified as many were at the news out of Dallas that A.H. 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.

Jim Barnett | Dec. 4, 2009 | 2:52 p.m.

Tags: A.H. Belo, advertising, business/news divide, Dallas Morning News, ethics, nonprofit

Tell us more, Paul

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. Read more

Jim Barnett | Dec. 1, 2009 | 12:50 p.m.

Tags: ethics, Federal Trade Commission, Jeff Jarvis, nonprofit, Paul Steiger, ProPublica

The FTC should give nonprofit news a closer look

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 as I read the Federal Trade Commission’s notice for its 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 the FTC wants to examine are some that would seem to support nonprofits — tax treatment and greater public funding, for example.

Memo to the FTC: No thanks.

It’s not that the FTC’s proposed solution 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.

Read more

Jim Barnett | Nov. 20, 2009 | 9 a.m.

Tags: All the News That's Fit to Sell, Bay Area News Project, Bill Kovacic, Federal Trade Commission, Google, government, government subsidy, Intel, Jay Hamilton, Microsoft, nonprofit, San Francisco, Warren Hellman

Defending the line between source and producer of news

[I've asked our nonprofit blogger extraordinaire Jim Barnett to respond to some of the ideas we've been exploring in our NGOs and the News series, cosponsored with Penn's Center for Global Communication Studies. Here's Jim's first take. —Josh]

Back in the 1980s, before they began full-blown advertising campaigns aimed directly at consumers, prescription drug companies used to get a lot of “earned media” time on television by shipping out video news releases, or VNRs, to local stations.

For station managers with limited budgets, VNRs were godsends. The productions were top quality, and they’d typically include interviews with doctors and other experts, as well as engaging video such as pills pouring off the assembly line. All the local anchor had to do was tape a voiceover, and — voila! — news.

VNRs were great for drug companies, too. They got direct access to consumers plus the credibility of their stories being told by local TV personalities. But did they mention the nasty (if rare) side effects or the high cost of their particular brands?

Read more

Jim Barnett | Nov. 18, 2009 | 12:10 p.m.

Tags: almost journalists, Boston Globe, Charlie Sennott, ethics, NGOs, nonprofit, objectivity, Society of Professional Journalists

Chicago’s L3C newsroom

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

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 journalism has run high. Read more

Jim Barnett | Oct. 26, 2009 | 9:02 a.m.

Tags: Bill Mitchell, Chicago News Cooperative, Chicago Tribune, James Hamilton, Jim O'Shea, L3C, MacArthur Foundation, New York Times, nonprofit, program-related investment

Downie-Schudson: Who counts as a nonprofit news org?

The Len Downie/Michael Schudson report on reconstructing journalism joins 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 about it? Among other things, they 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.

But they also call for clearer IRS definitions for “new or existing news organizations,” which they say will build a more robust nonprofit sector in journalism. 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 bulletproof 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 definition is already 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.

Jim Barnett | Oct. 19, 2009 | 3:02 p.m.

Tags: credentials, FCC, Fund for Local News, IRS, Leonard Downie, Michael Schudson, nonprofit, tax law

ProPublica fundraising adviser manages expectations

You might expect the fundraising consultant just hired by ProPublica to be optimistic, if not ebullient, about prospects for a tech-savvy, grassroots campaign to help sustain the nonprofit financially 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 startups, 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 — New York-based Community Counselling Service Co., which will focus on large grants — 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. Read more

Jim Barnett | Oct. 15, 2009 | 12:56 p.m.

Tags: Community Counselling Service Co., fundraising, Herbert and Marion Sandler, Knight Foundation, Madeline Stanionis, MinnPost, Mother Jones, nonprofit, ProPublica, Richard Tofel, Texas Tribune, The Nation, totebags, Voice of San Diego, Watershed Co.