Nieman Foundation at Harvard
HOME
          
LATEST STORY
PressPad, an attempt to bring some class diversity to posh British journalism, is shutting down
ABOUT                    SUBSCRIBE
Nov. 17, 2009, 1 p.m.

California Watch’s revenue model: Charge news outlets, target donors

ProPublica invites publishers to “Steal Our Stories.” John Thornton, founder of The Texas Tribune, asked newspapers to pay for stories, but concluded the effort was hopeless. But another new nonprofit news organization, California Watch, the Sacramento-based reporting initiative to be launched next month by the Center for Investigative Reporting, is barreling full speed into the syndication-fee model.

What makes California Watch different? Robert Rosenthal, CIR’s executive director, says California Watch has built something of a reputation even before the official launch of its website (now set for December), getting stories onto front pages across the state, and wants to leverage that position. “Our goal is not to give it away,” Rosenthal said in a telephone interview Monday.

There’s no way to know in advance whether the strategy will succeed, Rosenthal acknowledged. But that’s how it goes these days in the news business, whether nonprofit or for-profit: Every new project is so much spaghetti thrown against the wall. Whether it sticks is left to the vagaries of economics, social trends and, of course, luck.

But one thing is certain, Rosenthal says. California Watch, like so many new nonprofit news organizations, is under tremendous pressure from funders to find a model that works in the now and creates sustainability for the long haul.

So far, California Watch has lined up $3.7 million in nearly equal donations from three foundations — Knight ($1.3 million), Hewlett ($1.2 million) and Irvine ($1.2 million). But Rosenthal said they all want to see California Watch pursue a business strategy that generates significant revenues from royalties, advertising and other activities that typically are reported as program service revenue on a nonprofit’s Form 990 federal tax return.

How much is still an open question, Rosenthal said, but a reasonable range might be anywhere from 25 percent to 40 percent of total revenues, he said. And the more, the better to create a virtuous cycle in fundraising. “That makes it easier to get funding from the foundations or wealthy individuals,” he said, adding that $120,000 of the Knight grant is earmarked for development of a business strategy.

California Watch also plans to adapt standard nonprofit strategies to the digital age. Like his peers at ProPublica, Rosenthal hopes to pursue smaller donors, perhaps with a strategy built around communities organized on Facebook or Twitter. Rather than ask for donations up front, California Watch plans to demonstrate its good works to community members and then solicit their support. “I can go to you and show you ‘we did this, and it made a difference — help us,'” he said.

Looking to the challenges ahead, Rosenthal, a former executive editor of the Philadelphia Inquirer, said he was confident that California Watch could do great journalism; building a successful business model will be the bigger challenge.

“The landscape is moving so quickly,” he said.

POSTED     Nov. 17, 2009, 1 p.m.
Show tags
 
Join the 60,000 who get the freshest future-of-journalism news in our daily email.
PressPad, an attempt to bring some class diversity to posh British journalism, is shutting down
“While there is even more need for this intervention than when we began the project, the initiative needs more resources than the current team can provide.”
Is the Texas Tribune an example or an exception? A conversation with Evan Smith about earned income
“I think risk aversion is the thing that’s killing our business right now.”
The California Journalism Preservation Act would do more harm than good. Here’s how the state might better help news
“If there are resources to be put to work, we must ask where those resources should come from, who should receive them, and on what basis they should be distributed.”