Nieman Foundation at Harvard
HOME
          
LATEST STORY
Three years into nonprofit ownership, The Philadelphia Inquirer is still trying to chart its future
ABOUT                    SUBSCRIBE
April 26, 2019, 2:57 p.m.
Business Models

“I felt like it was a betrayal, and we had raised funds on false pretense”: The Correspondent’s first U.S. employee speaks out

“They’re really good at the PR thing, and it really feels like gaslighting. They were like, ‘Well, we never promised a U.S. newsroom.’ I was like: Wait, did I just imagine all this?”

Last July, ahead of its planned launch in the United States, The Correspondent made its first U.S. hire: Zainab Shah, who’d previously been global lead for strategy and operations at BuzzFeed. Ernst Pfauth — CEO of De Correspondent, the Dutch site for which The Correspondent was to be a new sibling — wrote that, as the new site’s operations lead, Shah would bring their “sustainable, ad-free model for journalism to the U.S. and beyond.”

Her hiring was supposed to be just the beginning of The Correspondent’s expansion into the U.S.: The next addition to the team, Pfauth wrote, would be a managing editor “to develop The Correspondent’s editorial strategy, and to help build and run a diverse team of correspondents from our headquarters in New York City” — all beginning before The Correspondent’s planned crowdfunding campaign at the end of the year.

And months later, thanks to a timely “Daily Show” appearance, the crowdfunding campaign was successful: The Correspondent raised $2.6 million to run its new site for a year.

But that managing editor had never been hired, and on March 15, Shah tweeted that she was leaving the company.

A couple of weeks later, the news trickled out that The Correspondent would not be opening a New York office after all — and that what many members had taken to be a U.S. version of the Dutch site would really be only a small move into English-language content. The Correspondent would instead use the crowdfunded money (46 percent of new members were Americans) to continue to operate from Amsterdam. It would hire a handful of new correspondents, a couple of whom would likely be based somewhere in the United States, reporting to editors back in the Netherlands.

In other words, what some had been sold as a multi-million-dollar effort to “‘unbreak’ U.S. news” would end up hiring roughly two reporters in America. A lot of people were unhappy about this.

As the pushback grew, I spoke with Rob Wijnberg, the editor-in-chief of De Correspondent, about the messaging around the company’s U.S. launch. Wijnberg acknowledged that they could have been more clear about what they were pitching to potential members, but also said they’d been consistent in talking about launching an English-language site, not an American one.

Toward the end of our conversation, he questioned why I was even writing a story over something that only “a couple” of people, or “nine people who were confused on Twitter,” or “12, 13, 14 people” cared about. “If you make a story out of it, then you’re kind of, how do you say this, legitimizing the confusion,” he said to me.

But one of those people who was confused — and who thought the confusion was legitimate — was Zainab Shah, The Correspondent’s first hire.

I spoke with Shah over a couple of weeks. At first, she didn’t want to go on the record; she feared hurting the Dutch employees of De Correspondent, feared negative consequences of speaking out about an initiative with influential backers, and worried that by telling her story, she might make it more difficult for future innovative journalism initiatives to get funding.

“I wouldn’t normally do this,” she told me after she ultimately agreed to go on the record and attach her name to this story. “But I do think the way I publicly supported the organization and wrote about why I joined, it would only make sense to let people know why I no longer work there. I think I have an ethical obligation to explain my leaving to people who may have joined after reading my essay, or after seeing I was on board with this. Ultimately, though, I’m invested in the industry and seeing new and innovative models succeed, and perhaps this is why I’m feeling a bit disappointed.”

“When I joined [The Correspondent], the question wasn’t, ‘Where will we have an office?'” Shah said. “I wouldn’t have left my full-time job at BuzzFeed, doing strategy and operations for global growth, if I had known there was a chance that — even if we made the fundraising goal — we wouldn’t have a U.S. office. It would just have been a really stupid decision on my part.”

She joined an early-stage startup because, she said, she was confident that she could help it reach its crowdfunding goal, and she was excited to be its first U.S. employee. “I’d have a role building out the team of journalists to launch this really awesome new thing,” she said. “That’s why I joined.” She received an allowance to purchase health insurance and a 401(k) allowance.

In the lead-up to the crowdfunding campaign, Shah and an intern who’d moved to New York for the position worked with The Correspondent’s team to build press. And in that process, the tension between an “American” newsroom and an “English-language” one began to surface.

Some of The Correspondent’s U.S.-focused news coverage in 2018, from NBC News, Axios, TechCrunch, Digiday, and here at Nieman Lab.

“Everyone was publishing that we were ‘coming to the U.S.,'” Shah said. “But then, during the campaign, the founders were like: ‘Oh, we should probably not say ‘the U.S.’ We should probably just say: ‘expanding to the English language.’ I asked them why, and they said, ‘When you say the U.S., people think we’re only for the U.S., but we want to let people know that we’re for the whole world.’

“It wasn’t: ‘We should say “the English language” because we might not have an office here.’ It was like: ‘We should say “English language” because that’s much broader than just the U.S.'”

It wasn’t until December — while the crowdfunding campaign was ongoing — that a Dutch employee told Shah that De Correspondent’s founders had decided to keep the office in Amsterdam.

Pfauth and Wijnberg declined to speak to me by phone for this story, but Pfauth agreed to answer a list of questions via email. He said that Dutch employees of De Correspondent didn’t know The Correspondent wouldn’t have a New York office until January.

Pfauth has said that they “did think for a while” that they wanted a New York newsroom, but mentioned it only before the campaign launched, not during. But Shah isn’t as certain. The campaign was focused squarely on the United States, including a special Correspondent van traveling to photogenic American locales and a team of “ambassadors” who were overwhelmingly American.

“I do sometimes wonder if there was never a plan to launch in the U.S.,” Shah said. “I think they had to sell the U.S. launch to ambassadors. I don’t think that kind of high-profile ambassador would have come on board if they hadn’t said ‘We’re launching a U.S. office.'”

The Correspondent raised about $1.8 million in “runway funding” — money that would “allow us to set up a global membership campaign and hit the ground running soon after,” Pfauth explained in a May 2018 post. $950,000 of that came from Omidyar Network, to help support “an English-language headquarters in New York City.” (Omidyar Network did not respond to requests for comment.) Another €600,000 ($673,000) came from the Dutch Democracy and Media Foundation — half as a grant, half as a loan. (“We are eager to see them flourish in the English-speaking world from New York.”) And Craig Newmark Philanthropies gave $100,000, which was supposed to be used to hire an editor-in-chief for the U.S. launch. (“We’re grateful for the trust these organizations have placed in us and for their support of our journalistic mission. We feel very welcome in the US!”) Newmark Philanthropies did not respond to request for comment.

That money was on top of $515,000 in grants from the Knight Foundation and the Democracy Fund that made Pfauth and Wijnberg’s “year of preliminary research” in New York with Jay Rosen possible, as part of “setting up the research project and paving the way for The Correspondent’s US office.” (Knight said they were funding De Correspondent “expansion to the U.S. market.”) In the post announcing that funding, Pfauth and Wijnberg explicitly said why they’d chosen to base The Correspondent in the United States:

We’ve chosen the US as The Correspondent’s home base for three reasons: that’s where our network is strongest, the business climate is conducive to new endeavors, and the country is in many respects a frontrunner in digital innovation.

(Wijnberg also separately received an Eisenhower Fellowship for travel in the U.S. in 2018.)

At BuzzFeed, Shah had managed a budget of more than $1 million, and before the crowdfunding campaign began, she asked to see the budget for the $1.8 million in runway funding, in part so that she could make sure it was being spent wisely in New York. But the founders were “very cagey,” she recalled. She says she was told that she — the company’s operations lead — couldn’t help with the budget, and was only shown a version of it that had been updated in April 2018, seven months before the crowdfunding campaign began, and included estimated, not actual, spending. She says she never got to see an updated version.

“I never had real insight into how much money exactly we had for the campaign, what we were spending it on, and how these decisions around spending money on campaign materials were being made,” Shah said. “I really wanted them to be more transparent about what the campaign funds were spent on, exactly, and how much.” (“Just as in the Netherlands, financial transparency will be a key feature of The Correspondent…If readers like and trust our business choices, they are more likely to either become a member or renew their membership.”)

She wanted to know, for instance, how much of the $1.8 million was going to the digital agency Blue State Digital and to Momkai, the Dutch design firm whose cofounders, Harald Dunnink and Sebastian Kersten, are also cofounders of De Correspondent. (“The red and blue are a subtle nod to the American color scheme,” Dunnink told NRC about the promotional booklets he designed for The Correspondent. “That makes it feel less foreign to them.”)

Shah recalled that the $1.8 million in funding — for a campaign aiming to raise $2.5 million — was described as a “shoestring budget.” And a former Momkai employee told me that, during the campaign, it became clear that money hadn’t been budgeted properly and that the team had overspent, so planned marketing materials had to be cut back.

Pfauth wouldn’t tell me how the campaign money was allocated and whether they’d spent more than their budget. To both, he wrote that “the books of 2018 haven’t closed yet, so we can’t give you the specific numbers. As a company, we lean towards sharing as much as we can when accounting is complete. Generally speaking, we mostly spent it on our staff, advisors, and the design and development of our membership campaign site and fundraising tool.” He said that questions about how much of the $1.8 million went to Blue State Digital and Momkai “should be directed to them — since we can’t share competitive information about our strategic partners.”

One specific budget reallocation was that $100,000 grant from Craig Newmark Philanthropies that was to be used to hire an editor-in-chief. In November 2017, Pfauth had written that “the $100,000 contribution will help us take the first steps towards building a diverse team, including hiring an editor in chief. That editor in chief will be charged with bringing together a team that incorporates a wide range of voices from around the world. Our philosophy is not to correct for diversity after launch, but to build it in from the start.”

By July 2018, however, no new editor-in-chief had been hired, and Wijnberg had taken over the role.

A job listing for a managing editor was posted (“to help build and run a diverse team of correspondents from our headquarters in New York City”). Applications poured in; over the summer, Shah also sourced people for the role, providing management with a list of possible names of people to reach out to.

“Rob was just like: ‘No, no one’s good enough. We probably shouldn’t hire a managing editor right now.’ This was three or four months before the campaign.”

Pfauth wrote over email that the New York-based managing editor hadn’t been hired because it’s “hard to ask promising candidates for a managing editor position to quit their jobs for a crowdfunding campaign that might not succeed.” That’s despite the job posting listing specific pre-campaign responsibilities the managing editor would be asked to perform, including building a “comprehensive hiring plan that can kick into gear when the campaign is successful.” The listing also says the managing editor would be “one of the few public faces of the campaign. You will give interviews and attend events to share The Correspondent’s mission and vision.”

Shah suspected the reason was different. “I think the reason they cancelled hiring a managing editor was because they’d already maybe started thinking they might not have a U.S. office,” she said. “If you hire a managing editor in the U.S., if they quit their [previous] job, like I did, that would be much more problematic later on.”

Pfauth wrote that Newmark’s $100,000 “was used where it was needed most,” and the reallocation was done “with his knowledge and agreement.” Pfaust said the company still plans to hire an English-language managing editor; Wijnberg will remain The Correspondent’s editor-in-chief.

Since the Newmark grant had been announced with the understanding that The Correspondent would build a diverse team from the start, I asked Pfauth if he thought that goal had been met and how it would be met without a team in the U.S. “Our diversity strategy hasn’t changed,” he wrote. “We seek global diversity in our team. We want to collaborate with correspondents and members from all over the world — including the U.S. — to cover the greatest challenges of our time.”

In December 2018, with the fundraising campaign successfully completed, the company’s founders returned to Amsterdam. After New Year’s, Shah came back to work in New York on January 4. “I started working on a hiring policy, and building a list of people we could reach out to,” she said. The Correspondent had received 1,400 applications in its open call for correspondents, and most of the applicants were based in the United States.

But in February, the founders told staff that The Correspondent would not have a New York office after all. Right before that announcement, Pfauth had called Shah to give her the news. “I was like, I understand how the money will go further if the HQ is in Amsterdam,” she said. “But my main question was — why, if you were just going to expand the [Amsterdam] office into publishing in English, was there such a need to come to New York to fundraise?”

Pfauth told Shah that, even though there wasn’t going to be a New York office, there could still be a role for her at the company. “The role they offered me was recruiting,” she said. “They said, you can recruit the correspondents in the U.S., and help us recruit correspondents other places. When I asked them how many correspondents I would be responsible for recruiting, they said 1 to 2 in the U.S, and a total of five to seven globally.” Shah was also asked to represent The Correspondent at U.S. conferences and events.

None of that — including recruiting just a handful of people — was very appealing to her. “I’d come from managing operations for international offices,” she said. “I also did not feel comfortable representing them after everything that had happened. I didn’t know if I wanted to put my name and my reputation on the line any further after everything that had happened.

“I was like, if I’m not part of the newsroom that you’re building in Amsterdam, how am I going to speak to the processes or practices there? Even in terms of innovating in this space with membership, I can’t really talk to what we’re doing and what we’re accomplishing if I’m not embedded in the newsroom. I just didn’t feel comfortable representing them further and working at an organization that was doing this. I honestly felt like it was a betrayal, and we had raised funds on false pretense.”

She declined the role and started looking for new jobs.

“They’re really good at the PR thing, and it really feels like gaslighting,” Shah said. “They were like, ‘Well, we never promised a U.S. newsroom.’ I was like: Wait, did I just imagine all this?”

This week, Pfauth wrote to me that — after this years-long process, $1.8 million raised from foundations, $2.6 million raised from individuals, a Daily Show appearance — The Correspondent now plans to hire “around five” full-time English-language correspondents. I asked how many of those would be in the U.S.; he didn’t specifically answer.

After taxes, design and development costs and hiring crucial supporting staff, we have the budget to hire around five English-language correspondents who will work for us full-time and will be on staff and receive benefits (if we raised $5.2 million instead of $2.6 million it would be 10 reporters). We also want to work with freelance correspondents who will contribute incidentally (such as columnists). Our new correspondents will be based in different places all over the world, including the U.S. The call for correspondents is coming soon and will include a call asking members who they’d suggest The Correspondent hire. Earlier we asked members for input on themes, which led to great ideas.

“If you’re going to have 5 to 7 correspondents who work remote,” Shah said, “you don’t need $2.5 million.”

In the days after word broke that there would not be a New York office, there were dozens of tweets from members who felt misled, with Wijnberg and Pfauth responding to many. One theme was that most of the fault for people thinking The Correspondent would be a U.S. news organization lied in those in the press who’d written about the campaign.

“That’s why it’s really difficult to buy this story of ‘The journalists wrote what they wanted, we never said we would have a U.S. office,'” Shah said. “Because everything they do has been really deliberate. They go out of their way to correct people. They really care about their reputation. They address every single tweet that might come their way that might be a little bit throwing doubt or shade on something they’ve done.”

For her part, Shah won’t be working, remotely or not, for the next iteration of The Correspondent, which is scheduled to launch on September 30, with “at least one new story every day.”

“At no point in time did they ever say to me that, once we make our fundraising goal, we have to decide where the office is going to be. There were nights that I worked until 4 in the morning because I was like: My future job depends on this. If we don’t make our goal, I’ll be out of a job.”

POSTED     April 26, 2019, 2:57 p.m.
SEE MORE ON Business Models
SHARE THIS STORY
   
 
Join the 50,000 who get the freshest future-of-journalism news in our daily email.
Three years into nonprofit ownership, The Philadelphia Inquirer is still trying to chart its future
Buyouts, rebranding, good journalism, and a vision still in progress: The Philadelphia Inquirer has had quite a summer. The metro newspaper business is still tough, even without a hedge fund or private equity pulling the strings.
People avoid consuming news that bums them out. Here are five elements that help them see a solution
“It is important that journalists take the time to fully explain the issue and the response before exploring implementation, results, and insights.”
The Boston Globe continues its regional expansion experiment, with students in a suburb
“Investigative reporting is great to have, but first we need the basics — and we’re no longer getting them.”