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September 15 2011

18:23

8 Ways Tech-Based Foundations Are Changing Philanthropy

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Not so long ago, most major U.S. foundations fit the image of the giant East Coast institution, rooted in fortunes made by titans of the manufacturing and extractive industries. For decades, the Ford, Carnegie, and Rockefeller foundations carried out sweeping programs on a scale that rivaled those of governments. Many public reforms and institutions were buoyed by their efforts, including public broadcasting, public libraries, and the Green Revolution.


But in recent years that primacy has been challenged by a host of new foundations, rooted in the digital communications and technology sector, that are rewriting the rules of American philanthropy. They don't always march in lockstep or speak with one voice, but they are generating a new philanthropic culture nonetheless.

Here are eight ways in which the new tech philanthropies are making their mark:

1. Their footprint is large and growing. In fact, tech-based donors represent the fastest-growing sector in U.S. philanthropy today. This claim could be based on the Bill & Melinda Gates Foundation alone. Founded in 1994 with an endowment of $94 million in Microsoft stock, it immediately experienced dramatic growth. This was further galvanized by Warren Buffett's 2006 contribution equivalent to $30 billion, which was to be paid out over a number of years.

The Foundation Center's list of last available audited statements (as of July 2011 at this writing) places the Gates Foundation's assets at nearly $34 billion at the end of 2009. This is more than the assets of the three next largest U.S. foundations listed (Ford, J. Paul Getty, and Robert Wood Johnson) combined.

In recent years, Gates has been joined by a number of other donors from the tech community, among them eBay's Pierre and Pam Omidyar, founders of the Omidyar Network; eBay's Jeffrey Skoll, founder of the Skoll Foundation; and the Google philanthropic arm known as google.org. Not only are these organizations built on vast new fortunes, their assets are also often neutral or even counter-cyclical compared with traditional foundations' portfolios.

2. They are generating new organizational cultures. Institutions tend to mirror the dominant administrative cultures of their origins, and foundations are no different. The new tech-based philanthropies, rooted in startup culture, tend to be distrustful of big bureaucracy and admiring of innovation. The Gates Foundation began in Seattle with a bare-bones staff that had to be doubled in 2006 when the Warren Buffett contribution arrived. The Omidyar Network dispensed with traditional titles to indicate its idiosyncratic approach to the funding process. (This decision included the word "foundation." One of the network's alternate labels is "philanthropic investment firm.") Omidyar programs are shaped by individuals whose titles include "principal" and "managing partner." The network collaborates with "partners" rather than funding grantees. The Omidyar Network is also pioneering the use of social investment, investing in for-profit companies for the sake of social impact, at times acquiring equity in the process.


Thumbnail image for omidyarnetwork.png Many of the new foundations favor a "venture capital" approach to their grants, in which many new projects are seeded with the expectation that a number of them will fail, and the successful models will proceed to the next level of support. This approach often places a heavy emphasis on project monitoring and evaluation as part of the ongoing funding process.

3. They promote a global perspective. The Ford Foundation and the Rockefeller Foundation were deeply involved with the architecture of the Marshall Plan that rescued Europe from the ashes of World War II. Now the Gates Foundation and its counterparts are taking a close look at the developing world, and at Africa and India in particular. The Gates Foundation's three program areas are global health, global development (with a strong emphasis on Africa and India), and U.S. programs (with a primary focus on education). The Omidyar Network's portfolio includes a number of projects in India and Africa. Google's philanthropy has experimented with a number of different approaches, among them pro bono tech projects and public health initiatives in Africa. Some of these global initiatives include surprising new approaches, such as Jeff Skoll's Participant Media, which finances films to advance public education on critical global issues. Participant's most recent project is Contagion, a feature film that portrays the world in the grip of a rapid-fire pandemic. The project features a public education website, and its advisors included public health expert Dr. Larry Brilliant, formerly the head of Google's philanthropy and currently president of the Skoll Global Threats Fund.

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4. They're still in motion. Some of the older technology-based foundations include the David and Lucile Packard Foundation (founded in 1964) and the William and Flora Hewlett Foundation (founded in 1967). These foundations have been around long enough to define their portfolios and institutional approaches, and bear a stronger resemblance to traditional East Coast foundations. But their younger cousins are far from set in their ways. The Case Foundation was founded by former AOL CEO Steve Case and his wife Jean in 1997. Google was only launched as a project in 1996, and google.org wasn't formed until 2004. Google is still adapting the administrative structures for philanthropy, with an increasing role played by various policy and regional offices.

Google has made a habit of experimentation in philanthropy as it has elsewhere. It has included traditional grant-making, staff volunteer projects, and the creation of online platforms for worthy causes, such as online crisis mapping to help disaster victims locate missing friends and relatives. (Google's philanthropic projects include the Google Foundation, a subset of google.org.)

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5. They believe in "social entrepreneurship." Digital media celebrates a culture of grassroots participation, so it's no surprise that many of their foundation portfolios feature projects in micro-finance, anti-censorship, and public participation in good governance. The Case Foundation has experimented with the Make It Your Own Awards, in which individuals are invited to suggest "citizen centered" solutions to their community problems and compete for $25,000 grants to implement them -- chosen by a public online voting process. The John S. and James L. Knight Foundation is based in Miami with origins in the newspaper industry, but it has moved decisively into the spheres of digital media and tech-based philanthropy. Knight has not only pioneered its News Challenge as an online public competition for digital media grants; it has also forged new approaches to collaboration among philanthropies with shared goals.

6. Their funding interests often reflect their core businesses. It's only natural that foundations that arose from the digital revolution would take a strong interest in innovators in the field. The Omidyar Network and Google have recently made major grants to the Wikimedia Foundation, the non-profit organization that supports Wikipedia, as well as to Global Voices, an international blogging community, and its academic birthplace, the Berkman Center at Harvard. Tech-based philanthropy also displays a strong affinity for other areas of science and technology, especially medical science and public health. The Gates Foundation has undertaken massive public health campaigns involving vaccinations, malaria eradication and nutrition in the developing world; the Omidyar Network and google.org have also made important contributions.

7. Individual and institutional philanthropy are both significant, and are sometimes carried out simultaneously. Pierre Omidyar's wife Pam was a co-founder of the Omidyar Network, and also founded two other philanthropic enterprises, Humanity United and HopeLabs. A large community of individual philanthropists is taking shape in the tech sector, and their influence is certain to be felt in coming years. Nor will they all be American. Skype, which was founded by Scandinavians and is based in Luxembourg, has been exploring new philanthropic avenues, including technological support on behalf of social good. A new generation of Indian philanthropists has emerged in recent years, such as Dr. Abraham George, a technology entrepreneur who created the George Foundation to promote projects in health, education, and poverty alleviation.

8. They're West Coast-oriented. This point is less obvious than it may seem. For decades, much U.S. foundation activity was concentrated in the Northeast Corridor, running from Washington through New York to Boston. This route involved heavy traffic with the federal government, New York media and cultural institutions, and northeastern universities. The new corridor involves Los Angeles, San Francisco and Seattle. (It is noteworthy that while the Case foundation is based in Washington, D.C., and the Gates Foundation has a Washington office, none of the organizations mentioned in this article maintain a foundation office in New York.)

Many Americans can describe themselves as "bi-coastal," but important cultural distinctions still exist. The West Coast elite have a different relationship to the news media than their East Coast counterparts. To start with, they read different newspapers -- and may not look for their news in newspapers at all. They naturally have more ties to Stanford and Berkeley and fewer to Harvard and Yale. They will be more attentive to Asian and Latin American culture and less concerned with Europe than their East Coast counterparts. Most importantly, theirs is a technology-driven environment that still carries the expectation that innovation can fuel growth.

This is not to say that East Coast foundations have disappeared from the media scene. The Open Society Foundations, based on the fortune of financier George Soros, has major offices in New York and London. It provides some $50 million a year to media projects, many of them devoted to freedom of expression and grassroots digital democracy efforts around the world. The Ford Foundation also plays a major role in supporting freedom of expression and international media development. The MacArthur Foundation funds an innovative array of programs in which media, human rights, and international development converge.

But other traditional players of the past have receded from the field. The New York Times Foundation has closed its doors and the Tribune Foundation has retrenched, while the Freedom Forum has dedicated much of its recent funding activity to the Newseum in Washington, D.C.

These trends have increased the relative influence of the West Coast donor community, but there have also been signs of increased consultation and collaboration among the various donors. Ideally, the surge of the tech-based donor activity can usher in a new age of American philanthropy, combining the energy of the new institutions with the experience of traditional foundations, to offer the world a much-needed array of innovative solutions.

This article is adapted from forthcoming issue of Anthony Knerr & Associates' publication, Strategy Matters

Anne Nelson is an educator, consultant and author in the field of international media strategy. She created and teaches New Media and Development Communications at Columbia's School of International and Public Affairs (SIPA). She consults on media, education and philanthropy for Anthony Knerr & Associates. Her most recent book is Red Orchestra. She tweets as @anelsona, was a 2005 Guggenheim Fellow, and is a member of the Council on Foreign Relations.

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June 27 2011

16:00

More Awesome: News Challenge grantee Awesome Foundation wants to fund journalism at the micro level

There’s something inherently meta about the Awesome Foundation winning a grant from the Knight Foundation in order to…give grants. Also, something kinda awesome.

The Awesome Foundation: News Task Force, a winner of this year’s Knight News Challenge, wants to seed hundreds of projects to encourage new ventures in news and information for communities.

In essence, they’ll be acting as a mini-Knight Foundation, offering up support for journalism entrepreneurship and reinvention, one micro-grant at a time. Using the two-year, $244,000 grant, the Awesome Foundation’s new Institute on Higher Awesome Studies will specifically fund local journalism programs, events, apps, and prototypes.

But the news task force will be an experiment in how best to funding new media projects, as much as an exercise in supporting innovation. New funding models are on Knight’s collective mind these days, with the Knight News Challenge wrapping up and the foundation planning its next steps.

“We can help a foundation like Knight give money away in smaller increments to we can see what’s working and not working,” said Christina Xu, who will be overseeing the news task force project.

Tim Hwang, the founder of the Awesome Foundation, told me their structure, as much as there is one, is designed to build community and find the most effective uses for grants. “The Awesome Foundation proper is not a foundation at all,” Hwang said. “It’s an agreement between groups of 10 people to give money to cool projects.”

The Awesome Foundation model, small grants awarded in a quick fashion, is a departure from how nonprofit institutional support traditionally works in journalism, with multi-year, multi-zero checks. While that method certainly has its merits, the Awesome model, Hwang said, produces quicker results and can show whether a project is feasible. Ideally what the task force will do is combine the best of both worlds, making an Awesome Knight Foundation of sorts.

“One of the things we’re interested in, this project is an interesting experiment in bridging the gap from emerging platforms and foundations,” Hwang said.

Until now the Awesome Foundation’s work has primarily been more general purpose, focusing on geography, with chapters in cities around the U.S. and the world. Xu said following last year’s earthquakes in Haiti, the foundation wanted to find ways to broaden their kind of philanthropy. That took shape in the Institute on Higher Awesome Studies, which, while still being awesome, would try to direct funds to more serious causes. Xu said the News Challenge goals for community information were a good fit with the types of proposals the Awesome Foundation receives.

The task force will first set up shop in Detroit and, following Awesome Foundation protocol, they’ll hire a “Dean of Awesome” who will act as a local administrator. The dean, with help from Knight, will identify 10-15 members of the community coming from media, government, technology or civic groups, who will serve as trustees, the group ultimately responsible for awarding grants. Xu said the project could be expanded in a similar model to cities like New Orleans and Miami. Aside from the cost of a stipend for the local administrator the bulk of the money from Knight would be used for grants.

The most obvious difference between the foundations Awesome and Knight is scale, which is something the news task force will try to use to its advantage as it provides grants. Xu and Hwang said the size of grants and the scope of work will attract an audience that may have gone under Knight’s radar. But the other benefit of scale could be the creation of a farm system for journalism and information ideas. After landing a task force microgrant, finessing a proposal or building a beta, the next possible step could be a larger grant from the Knight Foundation, Xu said.

“In the future, [microgrant winners] could be a great pool to be funded, something the Knight News Challenge might want to fund later on,” she said.

February 22 2011

14:00

Help Spot.Us Find a Path to Financial Sustainability

Spot.Us recently launched a new design, so this is an opportune time to write a "State of the Spot" post -- something we haven't done since the website was six months old. I hope to lay out how far we've come and what's on our plate and make a call to arms to the Spot.Us community and anyone else interested in the future of journalism.

In the two years since our site has launched, we've funded over 160 projects with the help of 5,000 contributors, a fifth of whom contributed more than once. We've done this in collaboration with 95 organizations, and our reporting projects have won eight journalism awards.

In short, we're making a difference. Whether it's funding FOIA requests, exposing the lies of a sheriff, or providing a deeper understanding of those less fortunate in our society, the stories we fund make a difference.

I earnestly believe in the power of an informed democracy. The guiding principle at Spot.Us is to make the process of journalism more transparent and participatory -- not merely to inform but to engage. Our site is a testament to the notion that people can take ownership over their information needs if there is a platform to support it.

Partnerships make our impact bigger. Take Oakland Local, for example, which has invested $700 into Spot.Us pitches and received $7,000 worth of reporting in return. Whether it's Mother Jones, The UpTake, WitnessLA or the myriad news organizations (many of them non-profit or community-based) we've collaborated with, our collective efforts allow stories to gain a wider audience, and we empower partnering organizations to do the fearless reporting that our communities need.

Room for Improvement

With all that said, I'm not satisfied. As Clay Shirky noted, our communities can become rife with "casual endemic corruption" if we don't figure out how to keep the public informed and engaged. The Spot.Us platform can and will improve to continue this fight.

Our redesign is an example of forward momentum, and now it's time to tackle the next hurdle: How can Spot.Us become a fully sustainable organization and increase the number of stories we support? Although 2011 looks to be promising, I'm already taking time to look to 2012 and beyond.

Running a startup organization means making choices. This is my attempt to explain to the Spot.Us community, journalists, and others who follow us what choices I'm debating, what obstacles we're facing, and to ask for your advice.

One of the biggest Spot.Us. opportunities is its unique sponsorship model. I've written about this at length before -- from announcing the idea to launching it to seeing early success. As far as I know, we are the only media organization experimenting with the idea of letting the public manage our advertising budget. It's our budget, but your decision. In many ways, this idea is as revolutionary as Spot.Us itself. Community members can fund a story without spending any of their own funds. Meanwhile, sponsors get meaningful engagement from community members, which can turn into tangible return on investment. Our advertising is transparent, participatory and therefore jibes with the mission of Spot.Us to get the public involved in the process of journalism. We are just acknowledging that advertising is part of that process.

Our sponsorship feature has created an important revenue stream for Spot.Us. At the moment, however, it doesn't offset our burn rate. The challenge is getting enough sponsors when we have no sales team (my spare time doesn't really count). We also need to find the right sponsorships which will engage community members so they continue to come back. This is compounded because our model is unique. I haven't found a media planning and buying agency to take it on, even though I'm offering a higher-than-normal commission.

How You Can Help

Tackling this challenge is one of the things I'm working on during a good chunk of my remaining time at the Reynolds Journalism Institute. Any help from a community member on the below action items would be greatly appreciated:

  1. Join Spot.Us and try our latest sponsored survey (free credits) and give me feedback on the experience. Take the challenge of doing the next three sponsorships we have planned (the next one will be sponsored by us to get feedback on how to better sell these).
  2. Help create the sales material for our sponsorship model -- maybe even find an individual or agency to take on the process of selling for a commission.

  3. Draft a long-term business plan with a road map for how Spot.Us would have to scale to become sustainable.
  4. Write a handbook for community-funded reporting, which would be a gift to the larger journalism community.
  5. And finally -- an A.P.I. with PRX, ASAP.

The Nitty Gritty

Allow me to elaborate. First, in regards to the material to sell sponsorships, our current sponsorship page doesn't do the concept justice. I can talk almost anyone's ear off about this model. We have some data about our users, but it hasn't been presented in any kind of media kit. Hopefully, a media planning/buying agency or an independent ad-sales person could use this material. I'm comfortable sharing a healthy commission, but we should provide them with the best sales material possible.

If you are an ad salesperson interested in working on an innovative project, let me know. If you want to contribute some pro-bono time to help us create the material, your karma will increase 13.6 points!

Up next is a business plan that shows a path to sustainability. I've played with some numbers and believe it's wholly possible if Spot.Us can grow its sponsorship model. It's a bit of a supply-demand issue. If we get more sponsorships (supply), I believe we can support more pitches and increase the number of surveys taken (demand). If either side falls short, we fail. At the moment, our demand is much higher than the supply. If somehow tomorrow we got our ideal number of sponsorships, I am not sure if we could hit the demand numbers, but I do believe these numbers are possible by 2012 with the right messaging and if the sponsorships are coming in regularly. The supply-demand conundrum is a bit of a chicken-and-egg scenario. If one side doesn't come through, the circle of life won't continue, and Spot.Us lets one side down.

The business plan I intend to lay out will show what numbers we'd need to hit on both sides to reach a sustainable equilibrium, one that funds stories, provides sponsors with an appropriate amount of engagement and leaves Spot.Us as a strong forward-leaning non-profit.

The community-funded reporting handbook is being led by Jonathan Peters, under my supervision. The handbook will be informed by Spot.Us experiences, but my hope is that it becomes a resource for anyone, regardless of a relationship to Spot.Us.

In regards to the application programing interface, it's important to remember that Spot.Us is not a news site but a news platform. In that same vein, we don't have to be a destination site. If partnering sites can use our back-end to fundraise for projects on their sites, then more power to them. But first we have a few technical hurdles to overcome.

Luckily, PRX is a willing guinea pig I mean, partner. ;) If we are able to create a seamless A.P.I. that integrates into a site, we can scale up the number of pitches (demand) Spot.Us has in its stables whenever we get a new sponsor. In some respects, this turns Spot.Us into a 21st-century advertising network in addition to inviting the public to support journalism.

So what now?

Obviously, we don't have a shortage of things to do. I remain encouraged both by the journalism community that supports our work and the public at large that has shown it supports quality reporting -- stories that need to be told, stories that can make a difference in the lives of individuals and the communities we live in.

Although that is exciting, I remain humbled and don't want to lose sight of what is at risk.

In the 1985 film "Brewster's Millions," Richard Pryor's character spends millions of dollars designing a room he could "die in." The designer goes through various iterations, each time getting closer and closer to the goal but never hitting the nail on the head. Eventually, the designer gets it right. This happens just as we find out the main character is broke, and an army of movers come to collect all the furnishings.

Aside from being one of my favorite comedians, Pryor, with the tip of his hat, touches on one of my biggest fears with Spot.Us. This new redesign leaves the site looking awesome. All the pieces are on the table, and the puzzle is coming together and beginning to show a beautiful image of a community-powered site. If Spot.Us isn't able to reach this dream, it would pain my heart, but I feel I could tip my hat in just the same way. Still, I feel we have a dragon by the tail and the tools in hand to bring it down.

Why I'm Sharing This

  1. Spot.Us as an experiment has always been about openness. As the journalism industry rants and raves about experimentation, I still don't see it happening, at least not at the level I think is possible. The more I can show what I'm doing -- the success, challenges, failures, and fears -- the more I hope others will follow, even if it's not "the industry" but rather lone and brave individuals. The water is fine, and I truly believe it is what we need.

  2. Somewhat selfishly, I think there are ways the Spot.Us community can help push us forward, especially with finding sponsors. Our current sales material is all here (it'll get better, promise), and we do offer a commission to anyone who lands a sponsor. I'm happy to give anyone the talking points.

  3. A similar plea is for any folks who want to dive into the numbers with me and come up with a long-term business plan and a proposal for funding. How I feel about the foundation world is a post in itself. Suffice it to say, it takes money to make money, and any funding we seek would have to abide by the old proverb of teaching people how to fish rather than giving them free meals. Again, we have a tangible revenue stream, but we need to shore up. As a non-profit, we can't get VC funding -- unless it's the kind the Texas Tribune gets), so we'd have to look to philanthropists.

I certainly can't predict what will happen. I never could. But that's what makes this an exciting ride and what I believe empowers the Spot.Us community. We've come this far only because you see value in our efforts. Together, we've funded meaningful stories in partnership with nearly 100 publications. I'm happy to say that I've seen many of them make a real impact in how our communities function.

I'm excited to tackle the future. I hope you'll be there with me


January 20 2011

09:37

November 19 2010

16:00

The Washington Independent is folding, the CEO goes over the books and outlines the lessons he’s learned

On Wednesday, the nonprofit news and politics site The Washington Independent announced that, after just under three years of publishing, it’s closing shop. Its state-based sister site The New Mexico Independent said it would reduce its staff to just one part-time blogger.

News organizations open and close all the time, but this one hit home for me. I joined The Washington Independent in late 2007 as its managing editor and went on to be its top editor before joining the Lab. Several of my former colleagues have already lamented the loss of a valuable news organization; I could do the same, but in the spirit of the Lab, I’d like instead to look at what went wrong financially and what lessons could be learned by other nonprofit publishers from its experiences.

To get a sense of what happened, I spoke with my old boss, David Bennahum, the CEO of the American Independent News Network, which publishes the Washington and New Mexico sites plus a network of six other sites. Back in January, Bennahum told me that in the first five years the organization existed, he’d raised $11.5 million. With that kind of impressive fundraising, what went wrong? And what kind of outlook do other nonprofit news sites have? Here are three contributing factors to the closing:

The economic crisis

Nonprofit organizations are no less susceptible to the pain of an economic downturn. In the past two years, foundations and other donors regularly cited shirnking endowments as a reason for not renewing gifts or initiating new giving. That forced the network to spend less and still dip into reserves to cover costs. “It’s actually quite difficult to get these [nonprofit news sites] funded and get them to run,” he said, no matter the editorial success of the site. “It just never gets easier.”

In an email Bennahum sent to his staff, which he forwarded to me and is published in full at the end of this post, he broke down the numbers like this:

  • In 2006, 2007, and 2008 we raised $8.3 million and spent $6.5 million.
  • We ended 2008 with a surplus of $1.6 million.
  • In 2009 we raised $2.7 million and spent $3.1 million, eating into our reserves by $400,000.
  • In 2010 we will raise $1.9 million and spend $2.7 million; we expect this to leave us around $400,000 in reserves.

Going forward, each site in the network will need to generate enough fundraising to support its operations — successful fundraising for one site will no longer support other nodes in the network. The Washington and New Mexico sites were the two not pulling in enough to cover their costs independently. They also both launched in 2008 with a similar structural problem. In Washington’s case, a single $600,000 donation largely got the project off the ground. New Mexico launched with the backing of a small pool of donors. Those early donors didn’t renew another year.

Not enough multi-year commitments

Bennahum says in hindsight, he should not have launched without multi-year commitments from big donors, even if it meant starting off smaller. For example, had he negotiated the $600,000 donation as three $200,000 grants over three years, The Washington Independent would have been smaller, but more stable. “We would have been half the size — which means today, instead of this position, I might have had several hundred thousand more dollars left,” he said. “We probably wouldn’t be closing The Washington Independent.”

The Washington Independent launched with two full-time editors, about ten reporters (a mix of full and part time) and a substantial freelance budget. By the closing announcement, the staff was down to one editor and four reporters. “You have to have your own diet. If someone puts out a big buffet in front of you, you have to think twice,” he said. “That’s a lesson I’ve learned that we’ll just never repeat again.”

Not growing gradually

Bennahum says the next year will focus on what he described as “a more diversified mix of journalism projects that work in recessionary times.” Earlier this year he launched a site called The American Independent that aggregates stories from around the network and runs original content from states without standalone sites. The idea is to produce new content without the commitment of launching a new state-based site. Currently, reporters file stories from North Carolina and Texas. The funding for those reporters ends in January 2011, which they understood when hired on contract. The site, though, will continue to operate.

“The incremental cost to adding reporters [to The American Independent] is potentially a much lower price than you could operate a newsroom,” he said. “It creates a much more organic and gentle growth path.”

The network will continue operating sites with small staffs of one to three reporters in Iowa, Colorado, Michigan and Minnesota. The Florida Independent received a grant from the Knight Foundation this year for $175,000 (the network’s largest donation) and will continue to operate with a staff of five.

Bennahum says he wants to experiment more with syndicating content across his sites to see if even a site with one reporter can serve a community. “It’s just a great thought experiment,” he said.

So what does The Washington Independent’s demise say about the growing nonprofit sector of journalism? Bennahum said that, for now at least, journalism still isn’t in the same category as the sort of nonprofit entities that get long-term foundation support, like hospitals or schools. Philanthropists are still watching where the news industry is headed.

“‘Let the market sort it out,’ is a lucid response, and not necessarily wrong,” he said. “For the foreseeable future, success [in nonprofit journalism] is going to be the exception to the rule.”

David Bennahum’s staff email:

Dear Team Members:

In four years, we have built an extraordinary news organization. We can proudly track 600,000 monthly readers, and cite dozens of stories that have had a demonstrable impact in the communities we serve. Along the way, we’ve also received over 40 awards for excellence in journalism. We have pioneered a model that melds the benefits of the Internet (speed, voice, dialogue) with the discipline of serious investigative journalism.

I am proud of all we have accomplished together.

It is all the more remarkable for how we’ve done this in the worst economic climate since the Great Depression.

So I want to be transparent with you in regards to our financial position, as it will have consequences for 2011. Here’s the arithmetic:

  • In 2006, 2007, and 2008 we raised $8.3 million and spent $6.5 million.
  • We ended 2008 with a surplus of $1.6 million.
  • In 2009 we raised $2.7 million and spent $3.1 million, eating into our reserves by $400,000.
  • In 2010 we will raise $1.9 million and spend $2.7 million; we expect this to leave us around $400,000 in reserves.

Thus we have, for two years, been self-financing from reserves accrued during better economic times. I am grateful for these reserves, and that we could use them judiciously over 24 months. However, it is no longer possible to self-finance the gap between income and expenditures, for the simple reason that our cash reserves are too limited to do so.

Much of the shortfall in our income has to do with the larger economic climate. But not all. Here are some other factors that I, frankly, underestimated: We agreed, in the past, to open programs without multi-year commitments from supporters. In some cases, these supporters have not renewed their commitments, yet we have kept operating the programs at close to scale. In particular, this is the case both for The New Mexico Independent and The Washington Independent.

We are approaching our fifth year of operations; some of our founding supporters have, understandably, felt that the time has arrived to shift their support elsewhere. This is a relatively predictable pattern in philanthropy: 3-5 years of support from any given source is a safe assumption. Replacing this support with new support requires a 9-18 month development cycle. In this economic climate, it is closer to 18 months. The net result is that we see, in addition to a shortfall, our most conservative estimates actually coming true. For instance, in the summer of 2009 we did a worst case scenario for 2010, with regards to income, and projected $1.9 million in revenues. This is precisely what happened.

So going forward, we must adopt a new set of rules, to ensure our overall viability through an economic crisis that persists, and may persist for several more years:

Institute “pay go” budgets: programs must be supported. When they are not, they have to be either closed or operated at the level being supported. In the case of new programs, require multi-year commitments as a precondition for operations. This is what we have successfully done in Florida, where the program has two year commitments.

Be more innovative in terms of leveraging the “network effect” to help smaller programs operate with limited budgets. We pioneered this in Minnesota, where we’ve learned to operate a robust site with one full time reporter. The site is successful thanks, in part, to the way we can syndicate content throughout the network from our sister sites.

Using this framework, there are two programs that, unfortunately, are no longer sustainable at their current levels: The New Mexico Independent and The Washington Independent.

In the case of New Mexico, we are going to institute the Minnesota model, with the aim of working to rebuild support over time. In the case of The Washington Independent, we are going to merge the site with The American Independent, and now have one national place (instead of two) for all our reporting. Over time, we aim to build up our reporting capacity in Washington as support develops.

And going forward, we will be looking to a different architecture with regards to how we create new sites: more of our programs will live as “state pages” on AmericanIndependent.com rather than as stand alone websites. This will provide us with more flexibility and leave us less vulnerable to sudden changes in support levels.

More details in terms of how these changes will affect you will be forthcoming shortly from the editorial team.

I know that this news is hard, and the decisions that led to this did not come easily. We have learned to work with less, and done so admirably, but I am taking the prudent course that will ensure our network and its mission can thrive. And if things improve faster than anticipated, I look forward to having that good problem on our hands.

Please know that you can come to me with any questions about this situation.

Thank you.

Best,
David

September 20 2010

16:00

A warning to nonprofit news organizations: Government funding may not boost the bottom line much

At a time when some Americans are talking about increasing government support for journalism, here’s an interesting new study that adds a useful data point to the discussion: When governments provide financial support to nonprofit organizations, 73 percent of the extra money is counterbalanced by a decline in support from private donors. In other words, the value of government money received is decreased by a reduction in funds from elsewhere.

The paper is by Jim Andreoni of UC San Diego and A. Abigail Payne of Canada’s McMaster University, and it examines over 8,000 nonprofit organizations. The idea that government funding reduces private giving is not new, but this paper attempts to figure out why — and how — the trade-off occurs. Is it because private donors think that government grants eliminate their own need to give — the idea that they “already gave at the office” through their tax dollars? Or is it because getting government money causes nonprofits to relax, to reduce how aggressively they pursue outside money through fundraising?

Andreoni and Payne come down squarely on the side of the latter — it’s primarily nonprofits’ own reduction of their own fundraising efforts that lead to less outside support, not any change of heart by donors. When the government gives, nonprofits take that as an opportunity to cut back on fundraising, even though fundraising is highly cost-effective; the paper finds an average $5 return in gifts for every $1 spent on raising money. Reducing fundraising may save some cash in the short term, but it doesn’t appear to be a smart strategy.

If charity managers find fund-raising a “necessary evil,” or fear it may hurt their evaluation from charity watchdog groups, then a government grant will allow them to redirect efforts from fund-raising to providing charitable services. This means that after getting a grant, charities may simply cut back fund-raising.

The paper finds that for every $1,000 given through a government grant, nonprofits reduce their spending on fundraising by an average of $137. But that decrease leads to a drop of $772 in donor gifts. (The paper found that, contrary to the fears of some, government grants encourage outside donors to give instead of discouraging them — but the impact is small, only about $45 per $1,000 in government grants.)

In other words, adding it all together, $1,000 in government money only nets out to $410 in the end, on average.

The study didn’t look specifically at nonprofits engaged in journalism, and it’s difficult to apply its findings directly to the ongoing debate over government support for news. Check out the full paper for much more detail. But if I were in charge of a nonprofit news organization, here’s what I’d take away from Andreoni and Payne:

Government help is not a cure-all. Even setting aside the very legitimate arguments over the wisdom or ethics of government support for news, it doesn’t appear to be quite the financial boon some are foreseeing, at least for nonprofit organizations more broadly.

Fundraising is worth investing in. Andreoni and Payne say it’s surprising to economists that $1 spent on fundraising could lead to $5 in revenue, but it’s a robust finding that lines up with what the industry reports internally. They also point out that not every nonprofit approaches fundraising with the same sort of enthusiasm (the “necessarily evil”); those who find the task distasteful will pay for it in the pocketbook.

Success in one source of revenue can’t lead to the abandonment of others. The smartest nonprofit news organizations are busy trying to build a multi-pronged model for financial sustainability — often blending advertising, sponsorship, small individual donors, money from big foundations, content-sharing alliances, and more. Over-reliance on any one source is dangerous; just ask the publisher of a major metro newspaper about classified advertising circa 1995.

Photo by Thomas Hawk used under a Creative Commons license.

June 16 2010

18:30

Announcing the 2010 Knight News Challenge winners: Visuals are hot, and businesses are big winners

They started out last year as a crowded field of hopefuls from around the world, each dreaming of a chance to perform under the big lights. Over months, their numbers dwindled as the level of competition rose; each successive round brought new disappointment to those eliminated and new hope to those left in the running. And now, whittled down to an elite few, they’re ready for the global stage.

Okay, I’m giving myself a yellow card: So maybe the World Cup isn’t the perfect metaphor for the Knight News Challenge. But the News Challenge is the closest thing the future-of-news space has to a World Cup, and while this year’s 12 winners — just announced at MIT — won’t be forced to battle each other for global supremacy, they do represent the top of a sizable pyramid of applicants — nearly 2,500 in all. You can judge for yourself which ones are Brazil and Germany and which are New Zealand and North Korea.

I’ve got information on all the winners below, but first a few observations:

Visuals seem to be this year’s theme: lots of projects about things like mapping, data visualization, video editing, and games inspired by editorial cartoons. Just one winner focuses on the business-model end of the equation (Windy Citizen’s real-time ads).

— This year’s new grants total $2.74 million. That’s up from last year’s total of $1.96 million, but still down substantially from the really big checks Knight was writing in the first two years of the News Challenge ($11.7 million in 2007, $5.5 million in 2008). The number of grantees is also up a bit from 2009 but well below earlier years (26 in 2007, 16 in 2008, 9 in 2009, 12 this year).

But that doesn’t necessarily mean that Knight’s overall commitment has decreased over time. Many of its grants are distributed over multiple years, so some of those early commitments are still being in force.

— Despite extending this cycle’s application deadline in part to encourage more international applicants, the winners are quite domestic — 11 American winners out of 12. In 2008, there were six international winners, and last year there were two projects that, while technically based in the U.S., were internationally focused — Ushahidi and Mobile Media Toolkit. (You could argue that this year’s One-Eight should count as international, since it’s about covering Afghanistan, but through collaboration with the U.S. military. And while Tilemapping will focus on Washington, D.C., a version of its software was used after the Haiti earthquake.)

That said, the deadline extension was also about reaching out for other kinds of diversity, and that happened in at least one way: Knight reports that nearly half of this year’s winners are private companies, up from 15 percent in 2009. That’s despite Knight’s elimination of a separate category for commercial applicants last cycle.

Below are all the winners — congratulations to one and all, and my sympathies to the thousands eliminated along the way. In the coming days, we’ll have profiles of all of the winners and their projects. In the meantime, for context, you can also read all we wrote about last year’s News Challenge and what we’ve written so far about this cycle.

CityTracking

The winner: Eric Rodenbeck of Stamen Design

The amount: $400,000

The pitch: “To make municipal data easy to understand, CityTracking will allow users to create embeddable data visualizations that are appealing enough to spread virally and that are as easy to share as photos and videos. The dynamic interfaces will be appropriate to each data type, starting with crime and working through 311 calls for service, among others. The creators will use high design standards, making the visuals beautiful as well as useful.”

The Cartoonist

The winner: Ian Bogost of Georgia Tech and Michael Mateas of UC Santa Cruz

The amount: $378,000

The pitch: “To engage readers in the news, this project will create a free tool that produces cartoon-like current event games — the game equivalent of editorial cartoons. The simplified tools will be created with busy journalists and editors in mind, people who have the pulse of their community but don’t have a background in game development. By answering a series of questions about the major actors in a news event and making value judgments about their actions, The Cartoonist will automatically propose game rules and images. The games aim to help the sites draw readers and inspire them to explore the news.”

Local Wiki

The winner: Philip Neustrom and Mike Ivanov of DavisWiki.org

The amount: $350,000

The pitch: “Based on the successful DavisWiki.org in Davis, Calif., this project will create enhanced tools for local wikis, a new form of media that makes it easy for people to learn and share their own unique community knowledge. Members will be able to post articles about anything they like, edit others and upload photos and files. This grant will help create the specialized open-source software that makes the wiki possible and help communities develop, launch and sustain local wiki projects.”

WindyCitizen’s Real Time Ads

The winner: Brad Flora of WindyCitizen.com

The amount: $250,000

The pitch: “As a way to help online startups become sustainable, this project will develop an improved software interface to help sites create and sell what are known as real-time ads. These ads are designed to be engaging as they constantly change showing the latest message or post from the advertisers Twitter account, Facebook page or blog. Challenge winner Brad Flora helped pioneer the idea on his Chicago news site, WindyCitizen.com.”

GoMap Riga

The winner: Marcis Rubenis and Kristofs Blaus

The amount: $250,000

The pitch: “To inspire people to get involved in their community, this project will create a live, online map with local news and activities. GoMap Riga will pull some content from the Web and place it automatically on the map. Residents will be able to add their own news, pictures and videos while discussing what is happening around them. GoMap Riga will be integrated with the major existing social networks and allow civic participation through mobile technology. The project will be tested in Riga, Latvia, and ultimately be applicable in other cities.”

Order in the Court 2.0

The winner: John Davidow of WBUR

The amount: $250,000

The pitch: “To foster greater access to the judicial process, this project will create a laboratory in a Boston courtroom to help establish best practices for digital coverage that can be replicated and adopted throughout the nation. While the legislative and executive branches have incorporated new technologies and social media, the courts still operate under the video and audio recording standards established in the 1970s and ’80s. The courtroom will have a designated area for live blogging via a Wi-Fi network and the ability to live-stream court proceedings to the public. Working in conjunction with the Massachusetts court system, the project will publish the daily docket on the Web and build a knowledge wiki for the public with common legal terms.”

Porch Forum

The winner: Michael Wood-Lewis of Front Porch Forum

The amount: $220,000

The pitch: “To help residents connect with others and their community, this grant will help rebuild and enhance a successful community news site, expand it to more towns and release the software so other organizations, anywhere can use it. The Front Porch Forum, a virtual town hall space, helps residents share and discuss local news, build community and increase engagement. The site, currently serving 25 Vermont towns, will expand to 250.”

One-Eight

The winner: Teru Kuwayama

The amount: $202,000

The pitch: “Broadening the perspectives that surround U.S. military operations in Afghanistan, this project will chronicle a battalion by combining reporting from embedded journalists with user-generated content from the Marines themselves. The troops, recently authorized to use social media while deployed, and their families will be key audiences for the online journal steering, challenging and augmenting the coverage with their feedback. The approach will directly serve the stakeholders and inform the wider public by bringing in on-the-ground views on military issues and the execution of U.S. foreign policy.”

Stroome

The winner: USC Annenberg’s Nonny de la Peña and Tom Grasty

The amount: $200,000

The pitch: “To simplify the production of news video, Stroome will create a virtual video-editing studio. There, correspondents, editors and producers will be able to upload and share content, edit and remix with friends and colleagues — all without using expensive satellite truck technology. The site will launch as eyewitness video — often captured by mobile phones or webcams — is becoming a key component of news coverage, generating demand for supporting tools.”

CitySeed

The winner: Arizona State’s Retha Hill and Cody Shotwell

The amount: $90,000

The pitch: “To inform and engage communities, CitySeed will be a mobile application that allows users to plant the ’seed’ of an idea and share it with others. For example, a person might come across a great spot for a community garden. At that moment, the person can use the CitySeed app to geotag the idea, which links it to an exact location. Others can look at the place-based ideas, debate and hopefully act on them. The project aims to increase the number of people informed about and engaged with their communities by breaking down community issues into bite-size settings.”

StoryMarket

The winner: Jake Shapiro of PRX

The amount: $75,000

The pitch: “Building on the software created by 2008 challenge winner Spot.us, this project will allow anyone to pitch and help pay to produce a story for a local public radio station. When the amount is raised (in small contributions), the station will hire a professional journalist to do the report. The project provides a new way for public radio stations to raise money, produce more local content and engage listeners.”

Tilemapping

The winner: Eric Gundersen of Development Seed

The amount: $74,000

The pitch: “To inspire residents to learn about local issues, Tilemapping will help local media create hyper-local, data-filled maps for their websites and blogs. Journalists will be able to tell more textured stories, while residents will be able to draw connections to their physical communities in new ways. The tools will be tested in Washington, D.C. Ushahidi, a 2009 Knight News Challenge winner, used a prototype after the earthquake in Haiti to create maps used to crowdsource reports on places needing aid.”

February 01 2010

15:00

NPR’s Ron Schiller: “A concrete and hopeful message” can raise funds

Ron Schiller, the new senior vice president for development at National Public Radio, doesn’t subscribe to the notion that the nation’s news media are in a state of crisis. Is the landscape changing? Absolutely. But this is no time to wallow in doom and gloom, according to Schiller. It’s an opportunity to take the case for nonprofit journalism to a broader audience of foundations and grant-making organizations with a “concrete and hopeful message” about what their philanthropy can achieve.

NPR has a long track record of success with big donors — witness Joan Kroc’s $200 million gift in 2003 — but many of its major institutional donors give because public affairs journalism already is a particular area of interest, Schiller said in an interview Thursday. But with the rapid decline of traditional, for-profit media, more nonprofits, including foundations and advocacy organizations, are having trouble getting their messages out. As a result, he said, they may be more open to the idea of NPR as a “partner in philanthropy” that can address a growing and demonstrated social need.

“There is a great opportunity to go to many, many organizations with that kind of case,” said Schiller, a former vice president at the University of Chicago who was named to his post in September. “We certainly have an opportunity to educate.”

Schiller hopes the approach will yield more gifts in the five- to nine-figure range. He concedes the approach isn’t novel; universities have been using it for decades as they take on issues such as urban education. But NPR’s new direction also would align with a broader trend in the nonprofit sector in response to the decline of traditional media.

From being the news to producing it

More and more nonprofits that once operated as expert sources for mainstream media have cut out the middleman and gone into the business of producing journalism. Last year, for instance, David Westphal documented the effort of Human Rights Watch. The New York-based nonprofit is “leveraging an already robust network of fact-gatherers around the world by adding a small unit that converts its academic-type research into consumer-friendly news reports,” Westphal wrote. Likewise on the domestic front, the Kaiser Family Foundation, a longtime provider of high-quality healthcare data, last year launched Kaiser Health News as a response to a decline in mainstream reporting on healthcare policy.

Other nonprofits with less expertise or commitment to journalism might be equally interested in filling society’s need for high-quality reporting, Schiller said. But the public radio community, including NPR, has not done a very good job of making what is known in the fundraising business as the case for philanthropy. To date, the appeal has been largely transactional, he said. It goes something like this: If you liked what you heard on “Morning Edition,” please send us a contribution.

The pitch is not without its successes. In 2008, NPR collected $57.7 million in grants, contributions and sponsorships, or about 34 percent of its total revenues, according to the organization’s most recent Form 990 report. But going forward, Schiller said, it might sound more like: “How do we use this incredibly powerful news and cultural organization to serve the country more powerfully?”

Are the nation’s major foundations ready to take on the task? Less than a year ago, Chuck Lewis and Bruce Sievers wrote an article in The Chronicle of Philanthropy called on foundations to pitch in. They wrote:

Philanthropy is in a unique position to take the initiative because it can move quickly and deliver significant resources to key players in the news media, while taking a hands-off stance toward content. Yet, with a few notable exceptions by some of the nation’s biggest grant makers…foundations have not become involved in this arena of public life.

Today, Schiller is optimistic that more grant-making organizations will be open to the idea of supporting journalism. What is needed is more education of potential donors and a message that makes the case compelling, Schiller said.

That might sound a lot like a traditional, university-style giving campaign, and Schiller doesn’t discourage the idea that NPR might launch that kind of effort. Much of his time, he said, is occupied in strategic planning with his counterparts at NPR’s 300 member stations to coordinate a national message while preserving their ability to meet local needs.

“We have a special time right now when the need for good information in the media is out there,” Schiller said in an interview at NPR offices in Washington. “In every community now, this is on people’s minds.”

Photo of Schiller by Dan Dry/University of Chicago.

December 14 2009

16:30

Are news nonprofits doomed to reliance on big gifts? A study in fundraising — and sustainability

I’ve been studying journalism nonprofits one way or another for about five years now, and I confess that in all that time, I’ve looked at their business models really as being slightly different iterations of the same species. But now, I’m not so sure.

As part of my graduate studies in nonprofit management at George Washington University, this fall I took a closer look at the finances of a dozen journalism nonprofits, keeping in mind the most pressing question for many: How can they diversify revenues and achieve some level of sustainability?

I acknowledge up front that my method was not perfect — I’ll explain at the end — but I think I’ve discovered what may be two critical distinctions within the group I studied.

First, the six nonprofits that served geographically defined communities — whether they be cities, states or regions — generally did a better job of diversifying their revenue sources than did those that attempted to speak to a national audience.

Second, among these “regionals,” there appeared to be some correlation between bigger budgets and greater diversity in revenues sources. This pattern suggested to me that there is a happy dynamic at work here — a virtuous cycle in which diversity of revenue helps create institutional heft that in turn attracts additional philanthropy in the form of major individual gifts and foundation grants.

What are the diverse sources that these nonprofits are tapping? For lack of a better descriptor, I lumped them together under the heading of “transactional” revenues — advertising, subscriptions, memberships, royalties, event ticket sales, contract research, and anything else that didn’t go under the “direct public support” line on Form 990. Some of these sources are taxable, some are not, and the difference was not always clear. Different nonprofits treated similar revenues in different ways. But I digress.

Regional news nonprofits: With size comes funding diversity

Here’s the graph that shows the correlation between average annual budget and a declining dependence on direct public support:

If this trend holds true, I think it would portend a relatively bright future for the nonprofit model as a major contributor in places like city halls and state capitals where newspaper bureaus have been emptied out. These are the places where the disintegration of the newspaper business model is most obvious to readers — and where for-profit alternatives have a hard time realizing returns on investment. Here, the case for philanthropy is clear — and so is a nonprofit’s potential to supplement its revenues with advertising and other market-driven revenues streams as it scales up its operations.

The trend also suggests a cruel and ironic corollary: The journalism nonprofits that can demonstrate the least dependence on foundations and large gifts may be the most likely to succeed in winning them.

National news nonprofits: Greater dependence on large gifts

At the same time, studying the finances of six “nationals” caused me to look at those organizations in a wholly different light.

Like the regionals, journalism nonprofits with national aspirations are feeling pressure to diversify their revenue base beyond foundations and founding donors. And at least some are looking to the regionals’ success for tactics they can replicate — witness ProPublica’s hiring of Watershed Co., a consultancy with expertise in online and grassroots fundraising. But from what I’ve seen, most depend on major gifts and foundation grants regardless of size. Here’s a graph showing average annual budget and dependence on direct public support:

As I reported here in September, Madeline Stanionis, Watershed’s CEO, pronounced herself “skeptical” of prospects for building a national network of small donors. As Stanionis said at the time, 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.

My suspicion is that the “nationals” also suffer from being one too many levels of abstraction from readers’ lives. Their reports, however compelling in their conclusions, don’t explain to the reader why city sewer rates are so high or why the state legislature just slashed school spending. As Mike Worth, my graduate advisor and GW’s former vice president for development, remarked: “The problem with the case (for philanthropy) is that it’s intellectual. Nobody ever died from lack of public journalism.” The latter might be debatable, but I think he’s got it right.

What’s the lesson here? I think there are two, either (or both) of which may be a blinding glimpse of the obvious.

First, the nationals have a solid track record of tapping foundation support and keeping it flowing over a long period. Here, I’m thinking of the Center for Public Integrity, which has relied almost exclusively on foundations and major gifts since Chuck Lewis founded it 20 years ago. Why tamper with success? The only real benefit from the time and effort required to build a grassroots network may be the added credibility of having to answer to an audience. This is doubly true for those such as CPI and ProPublica that specialize in investigative work and also claim to be nonpartisan and/or non-ideological.

The second lesson is that any effort to build a grassroots network at the national level is going to require a lot of refinement. There are simply too many competing news sources and too many requests for support. Breaking through all that background noise is an enormous challenge. Best of luck to those that try.

Except for Mother Jones

Now here’s the big exception to the rule: Mother Jones. Among the nationals, MoJo stood out in its time-tested ability to pull revenue from all kinds of sources — advertising, memberships, events and investment income. Steve Katz, the magazine’s chief fundraiser, tells me that the model is an outgrowth of a deliberate effort to define and serve a particular constituency.

In an email, Steve told me that MoJo has “worked mightily to make the case that you won’t find our kind of point of view anywhere else, and that our journalism is also rooted in a ‘value proposition’ a.k.a. a point of view a.k.a. a politics, and hence our journalism — which must stand on its own as professional grade work — is also about changing the world.”

I’ll buy that. But I also think that if you take Steve’s view to its ultimate conclusion in our current economic and technological environment, it points to a tough road ahead for news organizations trying to replicate the newspaper model of objectivity in the online world. The new national news organizations most likely to prosper are those that already have a built-in constituency — or a primary purpose other than producing journalism.

Here, I am thinking of David Westphal’s reporting on Human Rights Watch and its transformation from journalism source to journalism producer. As David noted in his recent testimony at the Federal Trade Commission: “A key point here is that not all of the new players are news organizations.” This trend raises important questions about governance and process within nonprofits — how they try (if they try at all) to insulate their news-gathering operations from their advocacy, much as newsrooms were separated from advertising departments at newspapers.

Where does it all go from here? In my view, the nonprofit model will shake out into two, three or maybe four discrete models, depending on reach and mission. Like cousins, at first glance, they’ll look somewhat alike and may get together once a year for reunions. But each will have its own distinct direction, habits, inclinations — and contributions to the public debate.

A note on the methodology: How’d I select the 12 nonprofits for my study? Frankly, it wasn’t very scientific; it was more an exercise in putting together a fact pattern. I began by listing the nonprofits I knew that (a) existed primarily to produce journalism and (b) had revenues of $100,000 or more a year, and 3) had filed their Form 990 tax returns someplace where I could find them online.

The list worked out to an even dozen, with six that I considered to be national in reach (ProPublica, Center for Public Integrity, Center for Investigative Reporting, Mother Jones, The Nation, Grist) and six that were primarily regional (Texas Observer, High Country News, MinnPost, Voice of San Diego, Chi-Town Daily News, New Haven Independent).

From there, I assembled all available revenue data from 2002 onward a developed an annual average for each nonprofit’s revenues and the percentage of revenues derived from “direct public support.” Then I plotted them on two graphs, one for regionals and the other for nationals.

15:00

Bringing NGO news into the mainstream: The case of OneWorld.net and Yahoo News

[It's one thing for NGOs to get into the news-producing business; it's another for their news to get noticed. Here Larry Kirkman and Laurie Moy explore the case of one NGO, OneWorld.net, and how its partnership with megalith Yahoo! News has put its work before an entirely new audience. This is the fifth part of our series on NGOs and the news. —Josh]

One month after September 11, 2001, OneWorld.net, a global network of civil society-based public media centers, launched a daily service on Yahoo! News in its World News section. Yahoo News was then, and continues to be, the top rated online news source according to Alexa.com and ComSource, and it reaches more than 43 million unique visitors per month.1 How did an NGO-based news organization become a contributor to the most visited news portal online? The answer lies in the perfect storm of innovative editorial policies, a challenging news media environment, evolving media advocacy, and private foundation support.

Yahoo! and OneWorld editors both believed that U.S. audiences were motivated by the national crisis to understand more of the world beyond their borders. In an email communication, the current Yahoo! News Editor, Sarah Wright, recalled her organization’s motivation:

Yahoo invited OneWorld.net to join its world news service in Fall 2001 to complement the coverage of mainstream sources, such as AP and Reuters, with daily reports that tapped into the knowledge of nonprofit organizations. OneWorld journalists provide a unique and valuable resource to Yahoo by providing context for international headlines and voices from the front lines of international development.2

Yahoo! had been poised to broaden its news sources just before 9/11, in response to a study by the New York-based media watchdog group Fairness and Accuracy in Reporting (FAIR) that criticized Yahoo’s “male, white, and right” bias. According to OneWorld International News Editor at the time, Sebastian Zebania, the FAIR study, titled Diversity Gap in Online Journalism, “showed Yahoo’s coverage to be monochrome needing to diversify quotes, subjects, etc., as it grew global.”3 On August 24, 2001, FAIR reported on its website that Yahoo! News senior producer Kourosh Karimkhany had thanked the group for the critique and affirmed a commitment to improve: “To state it succinctly, we agree with you 100 percent. We have been trying to achieve exactly what you suggested.” Karimkhany wrote that the Yahoo! News mission is “to represent almost every perspective… We encourage Fairness & Accuracy in Reporting to watch our site over the next few months. We hope you will notice a broader journalistic range.”

It was just two months later that OneWorld joined the Yahoo! World News page. The timing of this relationship was significant. By 2001, the American news media environment was feeling the growing pains of the digital revolution. Internet news portals were taking off and traditional outlets were struggling to catch up. At the same time, U.S. mainstream media were drastically downsizing their foreign correspondence, eliminating international bureaus and relying on government-supplied perspectives. OneWorld offered an alternative mission that challenged the dichotomy of popular and serious. The conventional wisdom of news media gatekeepers was that U.S. audiences were simply not interested in international news. OneWorld believed that the burden of finding engaging international news was not with the audience, but rather with the news media. It explained its approach, reaching out to popular audiences through the internet with serious content, in a grant proposal to the Veatch Foundation:

Today’s news media and political structures do not engage or fully inform Americans on most issues of global significance. The same elite sources are quoted time and again and way too much time is devoted to spin, drama, and sensationalism instead of the real issues that affect people around the world. Politicians largely focus on the issues and offer the platitudes that will get them re-elected, ignoring many topics and perspectives that impact millions of people worldwide. These political and media failings have turned off countless Americans to important global issues.4

OneWorld: History and outreach

OneWorld was launched in 1995 with the mission to use the World Wide Web to engage wide-spread audiences on international issues and causes. The co-founders, Peter Armstrong and Anuradha Vittachi, called it the first “global justice portal” on the emerging Web landscape. Its central purpose was to aggregate and highlight the content of development NGOs such as Oxfam and Christian Aid, realizing the great value of the trusted brand names and social networks of the organizations.

The two founders brought a wealth of broadcasting and multimedia production experience, as well as editorial expertise, to these nonprofit relationships that established a professional media framework for the journalistic enterprise over the next 15 years. In identifying, selecting, annotating and contextualizing the knowledge of development NGOs, they set high expectations for the application of journalistic standards to reporting based on the news, research, opinion, public engagement, and advocacy campaigns of civil society.

In Vittachi’s brief history of the origins of OneWorld, published online in September 2003, she explained that the first websites for dozens of organizations, and in return, “partners agreed to share their material with the rest of the partnership and global audience at large—at no charge.” She made the case that OneWorld “supported partners by raising their profile and extending their outreach,” by aggregating their content and their audiences.

The original OneWorld project was based at One World Broadcasting Trust, known for its social media awards. In 1999, it was sold to a new UK-based charity, OneWorld International Foundation, to accommodate a growing global enterprise that has included centers in the Netherlands, Finland, Italy, Spain, the United States, India, Zambia, the United Kingdom, Costa Rica, Austria, Canada, South East Europe, and Indonesia. The centers are autonomous organizations with their own boards of directors, special projects, extensive organizational networks of more than 2,000 NGOs worldwide, and a wide range of funding sources, including private foundations, government development agencies, partner dues, and individual donations. The centers operate under the OneWorld banner and with a set of common principles, standards, and agreements to share content and governance responsibilities.

OneWorld United States is a key component in the OneWorld network and supplies several different news products, including a bi-monthly online magazine, Perspectives, and a Daily Headlines service. All of OneWorld’s content, including more than 100,000 articles, is fully indexed and searchable.

A 2007 survey of Daily Headlines readers revealed an even split along gender lines and indicated that 48 percent of readers are in countries other than the United States. More than a third (38 percent) of Daily Headlines readers work in the nonprofit sector and the majority (61 percent) were interested in all geographic regions. The least interesting region for Daily Headline subscribers was North America.5

The placement of OneWorld on Yahoo! News allowed OneWorld to reach out to a broader, more “mainstream” audience, which complemented OneWorld’s existing demographics. A year after joining the Yahoo! News network , OneWorld conducted an online survey to collect demographic information about its new audience on Yahoo. The survey found that OneWorld News on Yahoo! readers were mostly male (66 percent) and middle-aged (41 percent were between the ages of 36 and 50). About one third (35 percent) worked in the business sector; only 12 percent of respondents worked for non-profit organizations, which marked a departure from the mostly non-profit and academic audience of the OneWorld community.

In terms of readers’ regional interests, Yahoo’s mainstream audience presents OneWorld with both an opportunity and a challenge: most readers were based in North America (83 percent) and tended to be interested in the developed world (North America 67 percent and Europe 48 percent) and the Middle East (51 percent). There was a noticeable lack of interest in developing countries (Asia 33 percent, Africa, 31 percent, and Latin American and the Caribbean 28 percent). Many respondents in this survey said OneWorld provided a unique perspective that they did not get elsewhere. Most respondents noted they got their international news primarily from mainstream sources, including AP, Reuters, CNN, and the New York Times.

A lack of brand recognition of OneWorld among the respondents indicated that, through Yahoo!, OneWorld was reaching a different audience from the one that was reached through its website and Daily Headlines service. The challenge therefore was to engage that audience and expose them to new perspectives. OneWorld met that challenge by bringing content to Yahoo! that may be slightly tailored to the new audience, but it always links back to a more diverse set of stories than that to which the Yahoo! audience may have been accustomed.

Support from mainstream philanthropy

The changing media environment was not going unnoticed by American philanthropy either. In 2001, the Ford Foundation sent a significant signal to the nonprofit and media sectors with its first grant to OneWorld, for $275,000, “to expand its civic society Internet portal.” Ford support for OneWorld has continued to the present. The winter 2003 edition of Ford Foundation Report featured OneWorld TV on its cover with the title “The Next Information Age. Reality TV the World Should Be Watching.” The introduction to the edition credited OneWorld for “demonstrating the dramatic potential for serving up extensive menus of news and commentary… a full range of perspectives and world events…new access for voices not often heard…”

Funding from the Omidyar Network and the John D. and Catherine T. MacArthur Foundation has supplemented the Ford support. In 2005, Pierre Omidyar, co-founder of eBay, explained to Business Week magazine why his foundation chose to get involved:

We’ve done a little bottom-up media with OneWorld. I have a sense that the traditional media hasn’t been aggressive enough talking about important issues. The empowering nature of people reporting their own news, speaking out, and challenging governments and even traditional media sometimes is a very powerful thing.

President Jonathan Fanton of the MacArthur Foundation, which has made grants to OneWorld since 2004, agreed that OneWorld had a vital role to play:

Modern technology makes it possible to broaden the sources of reliable information and bring a greater diversity of voices into the public debate about such topics as human rights and environmental sustainability. In harnessing the power of new communications technologies, the OneWorld network allows thousands of organizations around the world, ranging from community groups in rural Africa to large nongovernmental organizations such as Human Rights Watch to provide alternative perspectives on pressing global social issues.

In the foundation’s August 2006 News from MacArthur, Fanton said, “The spread of digital technology is dramatically changing news gathering, reporting, and broadcasting, as well as how people choose to access information,” and described OneWorld as one of the “creative new efforts to make better information from diverse sources about events across the globe available to U.S. audiences.”

These “creative new efforts” were a direct result of OneWorld’s unique editorial policy. As articulated on its website, OneWorld seeks a “solutions-oriented approach to presenting the news,” with a focus on “global issues known to be of interest to North Americans,” and “programs showcasing successful efforts to overcome development challenges.”

This editorial policy was informed and shaped by the insights of the Global Interdependence Initiative (GII). GII was launched under the leadership of staff at the Rockefeller Brothers Fund and the Rockefeller Foundation in 1999, and housed at the Aspen Institute, to use the tools of public opinion research, issue framing analysis, media content research, and cognitive linguistics to develop new approaches for engaging U.S. audiences in international issues. In the Who We Are introduction on its Web site, GII describes its purpose in this way, “to help broaden and deepen the American constituency for principled and effective U.S. foreign policy.” This extensive and well-funded project found that the conventional wisdom of news editors and publishers about the lack of consumer interest in international news was challenged by a strong indication of interest in international problems, such as infectious disease, labor standards, and global warming that were perceived as requiring multi-faceted and multi-lateral solutions.

OneWorld’s outreach and communications objectives

Because OneWorld’s goal is to communicate global issues to an American audience, most articles are international in scope, and the writers are encouraged to show how these issues are relevant to Americans whenever possible. To that end, OneWorld has provided a combination of articles that capitalize on “hot” topics along with those telling the “unknown” stories.

One of the most successful articles appeared in February 2006. Abid Aslam’s “Bottled Water: Nectar of the Frauds?” leapt into the international scene and generated more than half a million hits on the Yahoo! World News page in the first week alone. The article was re-posted on hundreds of blogs and other alternative news sites. In that first week, more than 2,200 Yahoo readers ranked the article with an average ranking of 4 (out of 5) stars. What’s more, the article generated tremendous discussion—900 comments to the article were posted onto the Yahoo! World News site alone. The article, drawing on the expertise of the environmental policy think tank the Earth Policy Institute (EPI), capitalized on a growing interest among the public as well as the mainstream media on the environmental effects of bottled water.

The piece clearly articulated environmental problems that affect the entire planet, specifically highlighting the personal effects felt in India and China. In addition, it went a step further by highlighting how villages in India and communities in Texas and the Great Lakes region of North America similarly suffer from the effects of water extraction, as related to increased consumption of bottled water. In this way, OneWorld took a highly popular topic, and made the connection between the global and the local, as well as the foreign and the domestic.

Another article, “Fossil Fuels Set to Become Relics, Says Research Group,” also rode the headlines and took the net by storm. It was the most viewed story on all of Yahoo! News on September 29, 2005, and it was OneWorld’s most emailed story (950 sends). The story capitalized on the growing interest in renewable energy in the country, but also drew upon the knowledge and experience of the nonprofit world, specifically Worldwatch Institute, in order to make the content relevant. That week more than 250,000 people viewed the article on Yahoo’s web site, and many more reposted and distributed the story through their own blogs and services.

In addition to blockbuster pieces that ride popular headlines, OneWorld also provides articles that present lesser known stories and the largely unheard voices behind them. For example, in November 2005, OneWorld contributed a piece to Yahoo! titled, “Shell Ordered to Stop Wasteful Poisonous ‘Gas Flaring’ in Nigeria.”

The story reported on the decision of a high court in Nigeria to force multinational oil companies to stop a practice called “gas flaring.” The article provided important context to an audience unfamiliar with the issue, and it explained how the practice affects local populations. It presented the voices and perspectives of not only the Nigerian court system, but also indigenous groups, as well as three local and international NGOs.

In December 2005, an article written by Niko Kyriakou highlighted the continuing struggle of residents of Bhopal, India, to force Dow Chemical to take responsibility for a deadly gas leak that happened 21 years ago. The article went beyond the typical corporate responsibility piece to include points of view from local and international activists, American college students, governments, and shareholders. In addition, the piece made the connection between the Indian struggle and a Texas woman who was also battling Dow in an environmental pollution case. Pursuant to OneWorld’s goals, the piece provided context, connection, and relevance.

An article that appeared in January 2006 gave American readers insight into an issue that received very little coverage in the United States—the effects of genetically modified seeds on small farmers in other parts of the world. In “‘Suicide Seeds’ Could Spell Death of Peasant Agriculture, UN Meeting Told,” OneWorld reporter Haider Rizvi called upon indigenous groups from South America as well as local and international activists to explain the issue of Terminator seeds. Perspectives from these groups were presented alongside those of governments and agribusinesses, providing an alternative perspective and much needed context.

By contributing these lesser known stories, OneWorld continues to pursue its goal of exposing American audiences to truly global issues. The effects of this were evident in the 2002 reader survey report, where more than half of respondents reported that the service had changed the way they thought about issues, and 23 percent reported taking some kind of action as a result of reading the OneWorld article. These actions included writing letters, e-mailing and calling members of Congress, taking part in campaigns, and discussing the issues with friends.

Partnerships: a win-win situation

The relationship between Yahoo! and OneWorld has been a successful one, and the objectives of both organizations continue to be met. By 2009, the list of world news providers on Yahoo! had grown to include Agence France-Presse, Christian Science Monitor, Time, National Public Radio, McClatchy Newspapers, and BBC News Video. The continued presence of OneWorld has been a testimony to its distinctive role in the mix of these mainstream news sources. Yahoo! News Editor Sarah Wright summarized:

For over seven years, the OneWorld service has provided links to organizations that are knowledgeable and active in the areas being covered by the stories. In this way, OneWorld acts as a navigator to the non-profit landscape, which contributes to the depth of coverage, and distinguishes it from other news services.6

OneWorld continues to work towards the goal of making “voices from the village” heard. In January 2009, OneWorld began adding some of its Daily Headlines, which are largely contributed by members of OneWorld’s nonprofit network, to its Yahoo! service. But this does not mean that OneWorld simply serves as a mouthpiece for organizations on the ground. Instead its journalists and editors work with nonprofit staffs to meet the challenge of communicating the stories and knowledge with journalistic skill and integrity. The January 15, 2009, article “One Third of Kenyans Face Major Food Shortage,” drawing on ActionAid’s experiences in Kenya, for example, highlighted an issue that had been largely ignored by mainstream U.S. media, but was gravely serious for more than 10 million people in Kenya. “ActionAid, a group we’ve worked with for many years, was raising alarm bells, but very few here in America were hearing those bells,” said OneWorld U.S. Managing Editor Jeffrey Allen. “ActionAid has been working in Kenya for decades. They’re the experts. They can tell our readers what people in rural Kenya are experiencing much better than any bureaucrat in Nairobi could, and even better than most journalists who fly in and fly out—if they even bother to do that anymore.”7

But ActionAid’s communications officers are not journalists, which is where OneWorld’s editors stepped in, complementing ActionAid’s raw report from Kenya with context and background from Oxfam International, another aid group working in the country, as well as several development news sources, before publishing the whole package to Yahoo! News. In this way, OneWorld helped the mainstream audience in the United States better understand the situation in Kenya—and the larger issues of the global food crisis—while getting the scoop directly from the individuals on the ground that are living the story every day. The links included by OneWorld’s editors then provided the mainstream audience on Yahoo! News a direct channel to begin participating in the stories they care about by further informing themselves and supporting the organizations taking action around the world.

OneWorld’s partnership with Yahoo! World News has had implications for both audiences and foreign news reporting. OneWorld has demonstrated that a news service can talk up to its audience, surprising them with how much they can know and how much others like them are doing. It has sought to engage, inform and equip its audience to be vocal and active, and in doing so has created a model for news that is solution-oriented, that explains social problems and illustrates them, and that is based on knowledge of activists and stakeholders on the ground. Through Yahoo!, OneWorld U.S. has been able to bring this model to a mainstream audience, giving a voice to the unheard and bringing new attention to their untold stories.

The partnership has also highlighted and encouraged an increasing appreciation for nonprofits as sources of news. Tremendous growth in the nonprofit-news sector, coupled with the expansion of opportunities for platforming nonprofit news on the mainstream news websites, has brought increased visibility and credibility to nonprofit news providers. OneWorld and Yahoo! were pioneers in this new environment, and their partnership is being replicated and reflected widely. The Associated Press, for example, announced on June 13, 2009 at the annual Investigative Reporters and Editors conference that it would begin distributing the work of four nonprofit news producers (Center for Public Integrity, Investigative Reporting Workshop, Center for Investigative Reporting and ProPublica) to its 1,500 member newspapers. What once was extraordinary is now accepted practice.

The news media environment is evolving quickly, and its relationship to audiences and news sources is changing as well. Mainstream media’s news gathering capacity is shrinking and many new media portals are too fragmented to fill the gap. As a result, many traditionally underserved and underrepresented audiences are becoming even more invisible than ever. Given this, and OneWorld’s commitment to “stories of the village,” it has decided to reach out further, by partnering with New America Media (NAM), a network of several thousand ethnic media organizations in the United States. This new partnership, according to Sandy Close, founder and Executive Director of NAM, demonstrates the opportunity to create a “newsbeat that connects hyperlocal sources overseas with hyperlocal sources in this country – a global-local axis of news and communications at a time when American journalism is both shrinking dramatically and focusing heavily on hyper-local news.”8

Larry Kirkman has been dean of the School of Communication at American University since 2001. He directs and develops academic and professional programs in journalism, film and media arts, and public communication. At American, he has established centers for innovation in public service media, including the Center for Social Media, the Investigative Reporting Workshop, J-Lab: The Institute for Interactive Journalism, and the Center for Environmental Filmmaking, and partnerships and programs with many media organizations, including the Newseum, USA Today, NBC, and New America Media. His work has included public television documentaries and public service campaigns, including Connect for Kids with the Advertising Council and Union Yes for the AFL-CIO. He launched the US Center of OneWorld.net, created the American Film Institute’s National Video Festival, and edited a series of ten media guides, “Strategic Communications for Nonprofits.”

Laurie Moy is the executive director of Pearls of Africa, a nonprofit organization serving children with disabilities and their families in Uganda, a position she has held since July 2001. She is also regarded as an expert in online volunteering and network engagement and advocacy of nonprofits. She has traveled globally to host workshops and presentations on nonprofits and communications technologies, and in 2008 she served as the Connect US Fellow at Netcentric Campaigns. She also holds a master’s degree in international media from the American University School of Communication and School of International Service.

Notes
  1. Sarah Wright, personal communication, February 2, 2009
  2. Wright 2009
  3. Sebastian Zebani, personal communication, January 25, 2009
  4. Michael Litz, Letter of Inquiry to Veatch Foundation (internal document), April 8, 2008
  5. OneWorld.net (2007): Daily Headlines Annual Survey Results. OneWorld, July 2007
  6. Wright 2009
  7. Jeffrey Allen, personal communication, February 5, 2009
  8. Sandy Close, personal communication, October 26, 2009
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