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Sept. 21, 2021, 10:09 a.m.
Business Models

Fewer grants, more risks: Four rules for nonprofit journalism funders, from the former president of ProPublica

“Any national donor large enough to put out press releases that issues one about making a bunch of $25,000 grants is either trying to fool other people or themselves.”

Some months ago, just after the naming of my successor as president of ProPublica, I took the opportunity in another venue to give some unsolicited advice to leaders of nonprofit news organizations. Today, with that successor happily in place, I want to turn around and do the same favor for major donors to nonprofit journalism (or most anything else, for that matter), those with hundreds of thousands or even millions of dollars at their disposal.

Here are four important ways I think they can make a bigger difference:

Make fewer, larger grants

One of the principal challenges of practicing philanthropy is saying no to people who ask for money within the power of your gift, many of whom could make good use of it. In far too many cases, the response is to try to say no to as few such supplicants as possible, to spread the available resources around. Consortia arise to facilitate this — trade associations, donor collaboratives. The showering of smaller grants is widely applauded (each recipient, its executives and Board members, chimes in) and grantmakers feel good about themselves. They shouldn’t.

Twenty-five thousand dollars (a common sum for these sorts of grants) over a period of years or from a group of funders sounds like a lot of money, and to most individual recipients (or donors) it is. But to organizations giving away (or spending) millions, it simply isn’t. Sure, an assemblage of such gifts can add up meaningfully1, or repetition each year can be sustaining, but any national donor large enough to put out press releases that issues one about making a bunch of $25,000 grants is either trying to fool other people or themselves.

Instead, it’s critical to risk your popularity, exercise your judgment, and make fewer grants for larger sums. The applause may not be as widespread, but the impact will be greater.

Take some real risks

Institutional philanthropy loves to think of itself as “risk capital,” and it surely could be (nothing is stopping it), but the track record here is spotty at best. Very few of the most important or enduring innovations in nonprofit journalism began with institutional funding. Perhaps even more indicative, you almost never hear of funders acknowledging the failure of past grants. True risk capital does this frequently — failures are the surest proof you were taking risks. If you fear failure, or being seen to fail, you are not inclined toward risk — and you are missing opportunities to spur change.

Support for startups or genuinely new efforts from established organizations are probably the easiest ways to take genuine risks. If you do, force yourself to conduct and publish a meaningful assessment of whether the risk paid off. Celebrate failures, and what can be learned from them, as well as successes.

Insist on metrics for success, but…

In the last decade, “metrics” became something of a dirty word among leaders in nonprofit journalism. It needn’t be.

Funders should insist that grantees agree in advance how success will be measured, and it’s essential that whatever metrics are chosen be something that could be attained — but also might not be. The key, however, is that it should be the grantee, not the donor, who chooses the metrics, and how they will be measured. News organizations should have to satisfy prospective donors that they are sufficiently ambitious and accountable, but they should not have to meet one-size-fits-all objectives.

Streamline the process

This is the most prosaic of my recommendations, but it can make a real difference in the operations of grantees. If you are giving them your money, you shouldn’t want to waste their time, or any of your funds. Donors can help in at least the following ways:

  • Provide prompt decisions. Long waits for funding decisions produce inefficiency among potential recipients, and should very rarely be necessary. It’s even okay to say “no, for now.”
  • Give multi-year grants when possible. If you are almost certain to renew your funding, save the transaction costs on both sides and set a longer commitment in the first place.
  • Never require the submission of reports, or, even worse, the creation of evaluations, you won’t actually read and substantively comment on. This may seem self-evident, but you would probably be surprised at how often such a rule is currently honored in the breach.  In more than a decade of filing hundreds of grant reports, more than 90% have gone unacknowledged (if you don’t count computer-generated emails or perfunctory thank-yous), and only a handful ever yielded a substantive response.

Most of these rules for donors aren’t particular to nonprofit journalism, and could apply widely across philanthropy. None are novel. But I think each of them is worth emphasizing, and could significantly boost the field if pursued.

I am enormously grateful to those who responded, over the years, to appeals from me, and from my colleagues at ProPublica and elsewhere. But as I step back from day-to-day fundraising, I am reminded of words written in the first edition of one of my previous employers, the Wall Street Journal. They could be a motto both for nonprofit journalism and the people who labor to fund it: “We appreciate the confidence reposed in our work; we mean to make it better.”

Richard Tofel was founding general manager (and first employee) of ProPublica, and was its president from 2013 until this month. This post originally appeared on Second Rough Draft, his newsletter about journalism — subscribe here.

Photo of money by 401(K) 2012 used under a Creative Commons license.

  1. ProPublica, for instance, received almost $7 million last year — nearly 20% of total revenues — from more than 43,000 smaller donors. Smaller donors, as a group, are by far the organization’s largest supporter, which I regard as a significant source of strength. []
POSTED     Sept. 21, 2021, 10:09 a.m.
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