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January 21 2011

05:54

“There’s a lot of pressure to play for the short term”: The Bay Citizen’s editor on its $15 million future


Seven months into its bid to reinvent the metro newspaper, The Bay Citizen has hired a staff of 26, rolled out daily online news and culture coverage, and, during November, attracted a monthly audience of approximately 200,000 unique visitors. Yesterday, the San Francisco-based nonprofit announced that it’s so far raised a total of $15 million in philanthropic gifts.

I interviewed editor-in-chief Jonathan Weber in The Bay Citizen’s downtown San Francisco office, and later by e-mail and over the phone, to find out what he’s learned from the site’s first half-year of operation — editorially and financially. This is the second post in a two-part series.

The double-edged sword of a New York Times partnership

One question I brought to the interview was why, given a blank slate, generous funding, and the resources of a tech capital, The Bay Citizen had created a largely conventional news website. The Bay Citizen produces two pages of content twice a week for the local edition of The New York Times — and it turns out that partnering with a leading print paper can be a double-edged sword for an online news startup.

“The partnership, I think, has tended to push us in a little bit more traditional direction than we might have gone otherwise,” Weber told me. “There’s definitely an issue of orientation. If you’re thinking about something as a New York Times story, you think about it differently than if it’s just going to run on baycitizen.org. I think it’s made the coverage feel a little bit more traditional in its approach.” Were it not for the partnership, quite possibly, “we would be further along in developing the kind of voice and style of our own kind of journalism.”

The pull of producing New York Times journalism has also meant, to an extent, less focus on innovation. While the site has a great tech team, Weber noted, they have yet to take advantage of potential tech and design collaborations in the Bay Area — including nearby companies like Twitter, Fwix, and Stamen Design, which won a Knight News Challenge grant to create an open-source data visualization tool.

Not that Weber’s complaining. “The flip side of it: The Times relationship has given us tremendous credibility and clout out of the gate, which we never would have had otherwise, and it also gives us a lot of distribution: 65,000 papers twice as week, plus the traffic from www.nytimes.com. That’s a non-trivial thing, and it’s very clearly a worthwhile trade-off for us, even though it does make life more complicated.”

That NYT credibility was also, Weber noted, a factor in The Bay Citizen’s ability to raise money — again, that extra $10 million — in philanthropic gifts. (The business experience of CEO Lisa Frazier, a former management consultant at McKinsey, clearly didn’t hurt, either.)

Doubling down on data journalism

The Bay Citizen has a 26-person-staff, 18 of them (including Weber) editorial employees. It also has a four-person tech team, including CTO Brian Kelly. One of his major areas of focus moving forward, Weber said, is data journalism, with data apps both large and small — including those that build off San Francisco’s DataSF.org. The Bay Citizen currently has two job postings related to data journalism: Software Engineer for News Applications and Data Researcher for Interactive News. The outlet has an iPhone app in the works and an iPad app on the way later this year.

Another big push will be to build community on multiple fronts, Weber noted. Right now, when readers send a tip/suggest a story, they get a generic message notifying them that their tip has been passed on. Ideally, he said, these tips will be the start of a back-and-forth conversation.

Weber also wants to follow the lead of TBD in building a strong dialogue with readers over Twitter and crowdsourcing breaking news. The Bay Citizen’s community efforts will, true to its name, include recruiting more citizen bloggers — and providing better prompts to help them frame their contributions. The outlet also has plans for a dozen events in which community editor Queena Kim will bring volunteers together to do multimedia explorations of particular topics. (One of the first experiments in this collaborative citizen journalism was A Night at the Opera, in which Kim convened a group of volunteer reporters and a photographer to do minute-by-minute backstage coverage of a performance of Aida.)

What not to do: “engage” before you have a community

When I asked Weber to look back over the first months of The Bay Citizen’s operation and say what he would do differently, he had an immediate answer: It had been a waste, he said, to put too much initial energy into community engagement. “You have to build audience first before you can really understand how to engage that community,” he noted. The Bay Citizen’s staff, right out of the gate, offered a discussion forum — but “it wasn’t very robust.”

And that was largely because the site hadn’t yet convened a community of people to do the discussing. “We’ve spent a lot of time talking about comments, and how to manage comments and encourage comments and whether to feed Facebook comments into the site,” he said. But “those are things that are really related to the scale and reach of the product, and you can’t really do much until you’ve really got that community.”

A new rhythm for news

Unlike most large online news sites, The Bay Citizen is only partially tethered to a print publication, which gives it more potential flexibility in how it approaches public-interest reporting. Had Weber considered ditching the daily news cycle and charting a different kind of journalistic course?

In a word: no. “You basically have to be daily,” he said. “Other rhythms just don’t really work very well online,” largely because “people are looking for news from a news site.” In terms of using The Bay Citizen’s site to provide backgrounders on certain topics — an idea that comes from the discussion about future-of-context journalism — Weber was skeptical about how much context users would want on a news site.

“We do have topic pages,” he said. “We haven’t done a very good job of highlighting and calling out those pages, and depending on the circumstances, we can put more or less effort into customizing those pages.”

Then again: “We’re not Wikipedia. You don’t really go [to a topic page] for a backgrounder, you go there for a story.”

Wide-angle thinking

“Our goal is not to replace the Chronicle,” Weber noted. “I think it’s healthy for communities of all sizes to have multiple, large-scale journalistic enterprises (which actually was the norm until fairly recently).” The CEO of REI once told him that their biggest competitor wasn’t another sporting goods company, but the video game companies, and Weber thinks about local journalism the same way. “The question is not whether we’re going to compete well or not well with the Chronicle, the challenge is: are we going to be able to engage people in news as opposed to all the other things — playing FarmVille or reading TMZ or making stupid videos for YouTube.”

“Despite what people might assume, a lot of people do not have an intrinsic interest in local news,” he said. “It takes time. Media is a very habit-driven thing. People do today what they did yesterday. People have been predicting the death of newspapers for 20 years — and while, certainly, newspapers have a lot of problems, they’re not dead yet, and they’re not going to be dead in the near future. And the reason for that is people have been reading newspapers every day for 20 years — and they like that, and they don’t want to read the news on the Internet just because it’s more efficient.”

As far as news outlets go, “there’s a lot of pressure to play for the short term,” Weber noted. Just as there’s a lot of pressure to experiment — which can be hugely beneficial, but detrimental if it’s done chaotically. “‘Let’s try it and see if it works’ — anything you try on the first day is not really going to work,” he said. You have to get to know your community just as they have to get to know you. And, most importantly, “you need to have a long-term view.”

October 20 2010

13:00

Meet “The Hub,” a virtual clubhouse for community nonprofit news sites

At the Block by Block community news conference last month, an irony emerged: Local site publishers, who spend their days cultivating community, hadn’t enjoyed much community amongst themselves. Again and again during the event — a convergence that co-host Jay Rosen aptly described as “entrepreneur atomization overcome” — participants expressed their desire for a centralized spot for conversation, information…and commiseration. As one publisher put it during the conference’s introduction session: “I just don’t want to feel like I’m alone in this.”

Enter The Hub, a new site that wants to be just what its name suggests: a centralized space — in this case, one for community news nonprofits. The site wants to be a go-to spot — the go-to spot, actually — for the people involved in nonprofit news, from journalists to publishers, from academics to funders. Click over to the site now, and you’ll find, among other things: a Getting Started section with legal and tax primers, editorial guidelines, and samples of marketing collateral; a Beyond the Basics section with info on business modeling and engagement strategies; an Academics and Research section with reports and teaching tips; a searchable database of participating news sites; a collection of contextual materials, like Q&As with, and videos of, nonprofit experts; and — maybe the most valuable resource for a nonprofit startup — a list of organizations that fund nonprofit journalism.

The Hub is overseen by Voice of San Diego, which has emerged of late as a kind of mega-org, leading collaboration efforts with fellow nonprofits. The idea for the site, says Scott Lewis, VOSD’s CEO, came in part from the many, many occasions in which VOSD execs and editors found themselves fielding requests for consulting and advice from people hoping to start their own nonprofit news sites. (Little surprise: The logistics to be worked out when it comes to news startup-ing — editorial, legal, and, of course, financial — are dizzying.) “We were getting so many people asking so many questions and wanting so many documents,” Lewis told me, “that we just thought, ‘Okay, let’s put it up. Let’s put it all up.’”

Though the idea was conceived by journalists, the site was funded by a foundation — the Ethics and Excellence in Journalism Foundation — and built by academics: San Diego State University assistant professor Amy Schmitz Weiss, with the help of grad students Jessica Plautz and Yueh-hui Chiang. They designed the site (work began in May) and then, over a busy summer, seeded it with relevant data. The hope, though, is that news organizations will supplement the existing infrastructure with their own contributions: information about their operating models, resources they’ve found helpful in building out those models, etc. Ultimately, Lewis says, he’d love to see each outlet with its own profile page on the network. (“Like a Facebook for nonprofit news sites,” he says.) From there, The Hub could also function as means of connecting community sites, both fledgling and already existing, not only to each other, Block by Block-style…but also to the organizations that might want to fund them. Voila!

The Hub doesn’t want to be simply a repository of documents, though, or even a connector of institutions; it also wants to be a centralized space for conversations. This past spring, the Knight Foundation convened a group of nonprofit journalism practitioners in Austin to share best practices, consider opportunities for collaboration, and generally discuss strategies for sustaining themselves into the future. (Check out videos of that meeting here and here and here and here.) Many new insights sprang from that meeting, Lewis notes — one of them being the meta-insight that was the need for a spot to incubate those insights in the first place. “We needed a natural place to put ideas once they come out,” he puts it — and “a natural place to promote them and make sure they spread.”

Lewis recently wrote a much-circulated blog post on the benefits of revenue promiscuity in the nonprofit world; it’s now hosted on The Hub. Ideally, he says, other people will contribute their own posts — original topics, or riffs on writings from other contributors — that will live on the site and fashion it into a kind of virtual brain trust. (Think Snarkmarket, the excellent group blog run by Twitter’s Robin Sloan, NPR’s Matt Thompson, and Wired’s Tim Carmody.) If the current state of the site is any indication, though, Voice of San Diego will continue to play a leadership role in cultivating the conversation, with the outfit’s models and strategies continuing to be a guiding resource for emerging startups. It’s a one-for-all approach that serves an all-for-one goal in nonprofit journalism. “If we and everyone else are seen as a viable solution that the community can turn to,” Lewis says, “then that helps us all.”

August 18 2010

16:30

Seeking Sustainability, Part 2: John Thornton and others on strategies for nonprofit revenue generation

This spring, the Knight Foundation hosted a roundtable discussion exploring a crucial issue in journalism: the sustainability of nonprofit news organizations. This week, we’re passing along some videos of the conversations that resulted (and, as always, we’d love to continue the discussion in the comments section). We posted Part 1 of the series, a talk focused on business-model viability over time, yesterday. And in today’s pair of videos, John Thornton, chairman of the excitement-inducing Texas Tribune, leads a discussion about a topic near and dear to the hearts of even, yes, nonprofit news outlets: revenue generation.

“It is nowhere in the mid-life venture capital playbook to start a nonprofit news organization,” Thornton noted; “and so none of us would be doing this if the central mission weren’t about public service.”

Thornton’s introduction is above; below is a discussion that it sparked among the nonprofit all-stars Knight brought together for the occasion — among them The Bay Citizen’s Lisa Frazier, the Chicago News Cooperative’s Jim O’Shea and Peter Osnos, the Texas Tribune’s Evan Smith, Voice of San Diego’s Scott Lewis, The Atlantic PhilanthropiesJack Rosenthal, Seattle CrossCut’s David Brewster, the New Haven Independent’s Paul Bass, California Watch’s Mark Katches, J-Lab’s Jan Schaffer, and the St. Louis Beacon’s Nicole Hollway. The group discussed finance-crucial issues like publicity, community, membership incentives, collaboration, demographic measurement, branding, corporate sponsorship, and more…not from a theoretical perspective, but from the point of view of practitioners who spend their days thinking about how to keep their organizations thriving.

The conversation, by the way, is well worth watching all the way to the end: The video closes with group members discussing some of their more outlandish — and, so, intriguing — ideas for revenue-generation.

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.

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