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After a $2.6M crowdfunding campaign, The Correspondent will have just one full-time journalist in the U.S.
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June 27, 2019, 9:57 a.m.
Reporting & Production

Here’s The Correspondent’s budget for its English-language expansion

“This represents five full-time correspondents working in different parts of the world, as well as at least five freelancers each month.”

With just over 90 days until its official launch, the English-language — remember, not just U.S. — expansion of De Correspondent has released its budget to its crowdfunding supporters. (Disclosure: Yes, that means I gave them some money. But it’s also on Medium.)

The Correspondent raised more than $2.5 million from 40,000 people in its initial crowdfunding campaign before publishing any content originally in English, with help from an appearance on The Daily Show and celebrity ambassadors like Jay Rosen, Nate Silver, and Roseanne Cash. (Specifics on that can be found behind a paywall by Thomas Baekdal here and openly at the Lenfest Institute here. The campaign used $1.8 million to launch.) Things got a little bumpy when news emerged that The Correspondent wouldn’t have a U.S. newsroom or consider this next step a U.S. expansion, contrary to what several of those ambassadors had been led to expect.

The Correspondent’s first U.S. hire, Zainab Shah, also called them out, saying “I felt like it was a betrayal, and we had raised funds on false pretense” and drawing other supporters to speak out. The co-founders eventually apologized, promised more transparency (“our members are our lifeblood”), and here we are. Laura Hazard Owen also reported on
how closely De Correspondent’s journalism matches up with its promises, since De and The Correspondent each raised millions before publishing a reported word.

CEO Ernst Pfauth and recently hired managing editor Eliza Anyangwe addressed members in their email this morning:

Our running costs between the end of our crowdfunding campaigning and September 2020 are $3.2 million. That sum is made up of the $2.6 million 45,888 of you contributed during our 2018 membership campaign; contributions to the sum of $100,000 from an additional 3,600 members who have joined since that campaign ended in December 2018, and a projected income of $555,000 from new members between now and September 2020.

Here’s the pre-launch spending plan:

In this phase, that extends from the end of the membership campaign (December 14, 2018) to September 30, 2019, we have budgeted to spend 33% of $3.2m. This represents an investment in the people, technology, and legal structures that will give The Correspondent the best chance of success. Here is how our spending in this period breaks down:

  1. The managing editor began in June but our aim is to have our full editorial team (both correspondents and editorial support roles, detailed below) in place, and working on their launch content, by the beginning of August – two months before we go live.
  2. Technology costs in this phase are predominantly for building the site, and setting up the server architecture. The tech load could not be carried by the staff at De Correspondent so we hired an additional two full-time and one freelance developer, as well as two contracted designers.
  3. The Correspondent exists as a separate legal entity to De Correspondent and so this phase also requires the services of legal and human resource experts to inform the creation of new company structures, processes, and protections. These include but are not limited to a benefits plan for employees, drafting a legal policy to ensure the protection of our journalists, and creating fiscal tools to handle sales tax in over 130 countries.

And post-launch, starting October 1:

67% of our $3.2 million budget will be spent in this phase, but remember: as this includes projected income from new memberships, actual spending figures may vary from these projections. (Actual spending will be shared with you in the 2020 end-of-year budget.) Below is a chart showing how we expect our spending will break down once we have launched the platform, and a description of each category:

  1. Editorial staff (52.8%) – This represents five full-time correspondents working in different parts of the world, as well as at least five freelancers each month. Unlike much of traditional media where freelancers are paid per article, at The Correspondent, because we place value on our members’ questions, knowledge, and experience, we want our freelancers to engage with you, in much the same way we expect our staff correspondents to. This means freelancers will more likely be working on time-bound projects, receiving a monthly wage during that period, rather than submitting one-off pieces in response to news events. The editorial team will be led by managing editor Eliza Anyangwe, and will work closely with an engagement editor (responsible for bringing our journalism to as many people as possible), a conversation editor (who will invite members to join the conversation), a copy editor, and an image editor. This category also includes a full-time Dutch-to-English translator, so that De Correspondent’s exceptional journalism in the Dutch language, relevant to global audiences, is available to The Correspondent members. And it includes commissioned photography and illustrations, freelance copy editors, fact checkers, translators based in different timezones.
  2. Technology & design (14.3%) – Once the new site is built, design elements produced, and servers set up, our technology costs come down from pre-launch levels. The Correspondent and De Correspondent both run on the same technology so further costs are shared between both organisations. However, we have also hired two additional developers to build new features for The Correspondent and to make it ready for our 49,000 members. Recurring server and security costs are also included in this category.
  3. Legal, management & finance (9.4%) – We are working with legal, fiscal, and media law advisors to make sure we run our international journalism organisation in an efficient way. This category includes fees for accountants who handle our financial administration, lawyers who help us set up free press protection for our correspondents, and recruitment fees. The CEO’s and managing director, Sebastian Kersten’s, salaries are also included here.
  4. Taxes (9.6%) – This is a conservative estimate of the sales tax we expect to pay in over 130 countries, based on insight from fiscal advisors.
  5. Member Support team (6.2%) – Our Member Support Team works full-time to understand the needs and expectations of members and advocate on their behalf in the newsroom. They also endeavour to answer your questions and other inquiries as soon as possible. The team consists of a Membership Director and a Membership Analyst, whose salary costs are split evenly between ourselves and De Correspondent. But we also have a dedicated member support manager for The Correspondent, Carmen Schaack, who many of you will already have had email exchanges with.
  6. Travel (6.1%) – Transnational beats can only be pursued if journalists can travel for their stories. In addition, this category also covers the costs of bringing our distributed team together. As a company policy, The Correspondent offsets carbon emissions tenfold.
  7. Office (1.8%) – With our headquarters in Amsterdam, we share inventory costs with the Dutch organisation. This keeps our overheads at less than 2%, leaving us more resources to produce actual journalism.

The message concludes with a “On a scale of 1 to 5, with 1 being incomprehensible and 5 being crystal clear, how clear was the above briefing?”

POSTED     June 27, 2019, 9:57 a.m.
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