Can we combine a community-supported business model with the declining commercial model for news?
I’ve been mulling the idea of crowdfunded beats for a while, probably since the idea occurred to me while David Cohn was speaking by Skype to my class at American University in 2011. Dave’s business at the time, Spot.Us, was helping crowfund stories by journalists: A freelance writer would propose a story idea and a budget, and when people pledged the budget, the journalist would do the story.
I asked Dave whether he had tried the idea for a particular beat — maybe as a way to fund reporting of a topic that was important to the community, that some people might care greatly about but that wouldn’t generate enough traffic to survive the next round of budget cuts at a news organization.
He liked the idea, but didn’t know about anyone doing that. Laura and Chris Amico did something like that when they crowdfunded an internship to continue Homicide Watch while they went to Boston for Laura’s Nieman Fellowship. Only that was their whole business focused on a single beat, not a slice of a larger news operation.
I never fleshed the idea out enough to pitch it as something we should try at Digital First Media, where our newsrooms cut many jobs in my tenure. But when John Robinson recently blogged about his concerns about a community arts group funding arts coverage in the Greensboro News & Record, I shared it on Facebook, saying, “I’d be more comfortable with a community-based crowdfunding, where ArtsGreensboro would be one of many funders, with a ceiling on how much any one source could contribute.”
John wrote about my suggestion, then Columbia Journalism Review’s Corey Hutchins wrote about it. Now Muck Rack has asked me to discuss the idea in a #MuckedUp Twitter chat this coming Tuesday (8 p.m. Eastern time/5 Pacific).
So maybe it’s time I fleshed out this idea.
I see this as an evolution of two attempts to generate revenue from the community to support news coverage:
- Newspapers’ paywall attempts.
- Steve Outing‘s suggestion that news organizations experiment with membership models.
I’m not going to repeat here my opposition to paywalls. But here are three facts about newspapers with paywalls that will help with crowdfunding experiments:
- Whether they say their paywall is working or not, most newspapers continue cutting their news staffs, giving subscribers less for their money and giving non-subscribers less reason to pay up.
- Some people (we don’t know how many) would pay more to support local news coverage than the cost of a subscription.
- A subscription creates at best a shallow relationship between the news organization and a subscriber.
I believe crowdfunding helps the news organization in all three areas:
- Whether you have a paywall or not, crowdfunding will allow you to slow the shrinking of your newsroom or even restore coverage in some areas you have cut. If you have a paywall, the crowdfunded beat would give people more value for their money and help protect that revenue source. With or without a paywall, the crowdfunded beat will produce more traffic and more advertising revenue if you have ads on the pages with crowdfunded content.
- People wanting to support news coverage would be able to contribute as much as they wanted to and could afford to, with incentives, or at least recognition, for larger donations.
- The people paying the freight would not just be customers, but supporters, a deeper relationship with special recognition and privileges.
So here are some ideas for launching crowdfunded beats (recognizing that, even if I nail an idea here, it’s going to need to evolve through a course of experimentation):
Beat choice is important
I’m doubtful you could fund every beat at a newspaper with donations from people in the community who value that kind of reporting. I suspect some of your meat-and-potatoes beats such as city council, cops and courts might not draw enough support (though I certainly could be wrong and encourage experimentation). Statehouse coverage may get funding primarily from special interests, which could create some issues regarding disclosure and boundaries (which I’ll discuss shortly).
The Greensboro beat which started this discussion was arts coverage, and I’d suspect that’s a prime candidate for crowdfunding. It probably doesn’t get a lot of traffic and is probably always in danger of being cut. I don’t have the figures, but I suspect arts coverage has been hit significantly as newsrooms have cut staffs.
I used to cover religion for the Des Moines Register and agriculture for the Kansas City Star and did fill-in stints on the agriculture and environment beats for the Omaha World-Herald. I hear that all three beats are endangered beats in newsrooms around the country (some of the ones I worked are long empty now or are combined with other beats). But I know well that all three have passionate followings.
I am sure that in all of those cases, some people and organizations in the community would contribute to fund coverage of that topic in their community. Perhaps for education, too. Maybe higher education or business. I would like to see some newspapers (or TV stations or community news websites) try to raise money for such a beat.
Fund-raising
I welcome other suggestions about how to raise money from the community. People with more experience than I have in finance and fund-raising will have better ideas than mine, but I’ll toss a few out:
Budget. Set a budget that includes pay, withholding taxes and benefits for the reporter as well as equipment, other expenses and a reasonable overhead figure (since someone is going to have to edit, supervise, pay, etc.). You might have two figures in mind, a minimum figure that you need to reach to add (or save) this beat and get started, and a desired figure to fund the first year.
The pitch. While I’d like to save journalists’ jobs, I suspect that crowdfunding will work best to add jobs you have already cut or never had than to prevent job cuts. If you’re trying to save a current staff member’s job, the public spectacle of telling the community to donate or Steve loses his job will be unseemly and will compound Steve’s woe if you don’t raise enough money by the deadline. Maybe someone will devise a good way to crowdfund to prevent cuts, but I see it as most effective in restoring jobs or expanding. You might pitch ad-free coverage of the topic, so it would be completely community-supported.
The campaign. You’ll need to promote the fund drive in your newspaper, website or broadcast station as well as on your social media accounts. I encourage promoting it to interested community groups as well. See if you can make your pitch at meetings of service organizations such as Rotary, Optimists and Jaycees. And if your community has some organizations in the area of coverage that you want to save or add — an arts council, ministerial alliance or environmental organization — try to make your pitch at meetings of those groups. See if the organizations will include your pitch in their newsletters or on their websites.
Foundations. Would a foundation contribute to the drive or match donations? Perhaps a foundation interested in the area of coverage or a general community foundation would contribute. Maybe a family foundation created by former owners of your newspaper would support the cause.
Logistics. I presume you could use Kickstarter, which has more than 1,000 journalism projects already. You might be able to create a non-profit arm that would include the community-supported jobs (and accept tax-deductible contributions).
Transparency. I think you’re going to have your most success by being completely transparent about how much you need. Publish the whole budget as part of the fund-raising pitch. The reporter might not be comfortable with the pay figure being public, but we make a lot of public employees uncomfortable in the same way, and transparency will be essential for successful fund-raising. You also should be transparent about your funding, disclosing all contributors, or perhaps all those above a certain threshold.
Membership. You may want to give donors more than just news coverage for their contributions. Giving away swag such as mugs or t-shirts to donors adds to the amount of money you need to raise, but it might bring more donations (and they help spread the word as people wear the t-shirts or use the mugs). But maybe you want to develop some more meaningful membership arrangement. Maybe those who contribute get invited to annual or quarterly briefings with the reporter, where they can ask questions and get previews of upcoming stories. Maybe they get some opportunity to suggest story ideas (though that deepens the issues we address in the next section). Maybe they receive email or text alerts when the reporter posts a story.
Continuing fund-raising. Every story the crowdfunded reporter does should include a brief explanation that the work is crowdfunded, with a “donate now” button. If people comment on the reporter’s stories, you might include a funding solicitation (though many comments are negative, so maybe not). Maybe you track who shares the story on social media and experiment with ways to pitch them: Maybe a thank-you when they share, with a gentle comment noting that the position is crowdfunded, with a link. Then add them to a database of people to contact when you’re campaigning for more funds. If continuing donations don’t cover costs for the next year (or whatever period you fund initially), you should start more active fund-raising for the next year a couple months before your funding runs out. Email all the original funders as well as campaigning on your various platforms.
Integrity
As John noted in his original piece about ArtsGreensboro funding the News & Record’s arts coverage, accepting funding from the community raises issues of integrity, presenting actual or perceived conflicts of interests. You don’t want your agriculture coverage all funded by a local meatpacker or your energy or environmental coverage funded by an oil company.
I don’t think the potential conflicts of interests are reasons not to pursue community funding, but you need to make protection of your integrity part of your planning, your pitch and your experimentation. Perhaps you set a ceiling on contributions from a single source to limit any organization’s potential influence. You certainly want to explain to all potential contributors how important independent journalism on this topic is to the community and what steps you will take to insulate the reporter from undue influence (and then be sure to take those steps).
Perhaps you give members a story-suggestion channel, but the suggestions come to the reporter without sources, as tips from unidentified supporters. Or maybe you decide on some other membership benefits and make clear that contributors are barred from suggesting stories. Or maybe you allow story suggestions, but you will disclose who suggested any story ideas that came from contributors. You certainly should disclose when you quote supporters in your stories.
The meetings with the community — either fund-raising meetings or briefings with supporters — create potential conflicts, but they also create potential opportunities to explain the importance of integrity and independence and to make sure your supporters know they are paying for independent journalism about a topic they care about, and not paying for influence.
Funding sources always present a potential threat to the integrity of a news organization. Ad-supported news organizations face real or perceived conflicts from their relationships with advertisers. Nonprofit news organizations face real or perceived conflicts from their relationships with philanthropists. A news organization seeking community funding will be no different. Make sure the people who support you understand the importance of integrity and they will respect and value that.
You need to consider and try measures of transparency and insulation to protect the integrity of your journalism. And you need to make clear in your discussions about funding and in the quality of your work that you are not selling influence.
Entrepreneurial ventures
Crowdfunding might be a better option for nonprofit ventures or bootstrapping entrepreneurs.
MinnPost follows a funding strategy similar to public broadcasting, with large gifts from foundations and philanthropists and small gifts from other donors, more than 4,200 supporters in all.
A small community operation such as Homicide Watch might be able to get some or all of its funding from a crowdsourcing appeal.
When Tracy Simmons‘ Spokane Faith and Values site lost its funding from the Religion News Service, she decided to continue based solely on crowdfunding. Her “support us” link includes not just a pitch for money but for volunteers to blog, help with fund-raising and be “social media ambassadors.”
Are you crowdfunding?
I’d love to hear from some people who have been successful crowdfunding journalism ventures, either a standalone venture or a piece of a commercial media company. I’d like to share some lessons from your success. Or if you’ve tried and failed, I’d like to share those lessons, too.
Please join today’s #MuckedUp chat on the topic.
Update: I forgot about Beacon Reader, a startup which is crowdfunding writers covering specific topics. Will probably blog about this soon, but right now I’ll add this tweet to the post:
@stevebuttry enjoyed this article http://t.co/3dZ7nLNxMB and the whole time was thinking you were gonna mention https://t.co/7hPulrmHym
— Alexis Ohanian (@alexisohanian) July 25, 2014
I’m glad you mentioned MinnPost. The page you linked to says, in part, “Our goal is to create a sustainable business model for this kind of journalism, supported by corporate sponsors, advertisers, and members who make annual donations.” “[T]his kind of journalism” is “high-quality journalism for news-intense people who care about Minnesota.” Certain beats are funded by specified entities — Susan Perry’s Second Opinion covering consumer health, for instance. Second Opinion is sponsored by UCare, and the reporting is superb. MinnPost has also run campaigns, asking readers to fund more coverage of specific beats.
Readers supporting journalists is a long-standing tradition. I.F. Stone comes to mind. But his was a one-man operation.
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Hi Steve. At Spot.Us we ended up doing some “beat funding.” We kinda had to kludge how it worked on Spot.Us – but we made it happen on a few ongoing projects. I would have liked to develop it out further but… such is life.
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Thanks, Dave! I hope you can join the chat tonight. You know much more about the topic than I do.
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Thanks for writing this Steve. Very helpful! Got my wheels turning…
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Hi Steve. I’m at UptownMessenger.com and MidCityMessenger.com in New Orleans (I guess we’ll be neighbors shortly?) and I completely agree that this is a good approach to reader-supported revenue. A small but significant portion of our budget comes directly from readers, and our pitch is similar to what you’re suggesting: the beat is the neighborhood. I think the money we’re receiving is comparable to what a paywall would raise — maybe slightly less, but comparable — without annoying or more importantly excluding readers.
In fact, thinking aloud, there are specific “beats” we have considered adding at the various sites — perhaps we should ask again for specific help from our readers covering them?
That said, I think this approach would be a much harder sell at a legacy operation, in particular one that has already offended the community with deep cuts. I worry that readers would see that as insult to injury, asking them to pay more to restore what’s already been taken from them — especially if there’s a perception that the ownership of the business is still making steady profits. It’s worth pointing out that our income from this is a small part of a small budget — I’d also be concerned that the approach might not scale.
Still, interesting thoughts here. Thanks for posting.
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This is an interesting conversation. I see you note Kickstarter, in the donation-based crowdfunding arena. Would there be a place for lending-based crowdfunding?
Lending-based financing could be an alternative method for news agencies or foundations. There are platforms that would enable those organizations to reach to readers and their community to raise the capital for the reporting. The caveat being this would be a loan with an interest rate and payback period to those that fund it. However the engagement opportunity to discuss why they feel it is important to fund would create the forward momentum to fund the capital campaign.
In your opinion, would these kind of platforms be of help to news organizations and the like looking to support investigative series and/or beat reporting?
Regardless I’ll be joining the chat at 5 p.m. PST tonight. I’m looking forward to it!
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[…] « Could crowdfunding help restore some newspaper beats? […]
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Still reading, but wanted to contribute this recent example from Canada:
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[…] the paper to start his own subscription-funded website. The other, by Steve Buttry, looked at potential crowd-funding opportunities for newspapers. Both of them got me thinking about potential alternative ways to finance sports […]
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Hi Steve — Thanks for this very thorough roundup of crowdfunding ideas related to newsrooms and journalism. I have been pondering much myself lately, reflecting back to 2009 and my ideas related to the L3C newsroom. Back then, the word “crowd funding” wasn’t in my vocabulary. But as I think back, I see that for me, the L3C was an early crowd funding idea. As I outlined in a post back then, a newsroom L3C could consist of three investment tranches. http://www.sallyduros.com/a-sample-newspaper-l3c/
1) Equity or First risk tranche Foundations through PRIs and tax deductible donations by individuals to Community Foundations turned into PRI investments by Community Foundations.
2) Mezzanine tranches Employees, local businesses such as auto dealers or restaurants, local merchants and banks, supermarkets and other national chain retailers and theater chains all of whom depend on the viability of the paper for delivery of their message to local customers.
3) Senior tranches Foundations through Mission Related Investments of endowment, State and local Pension Funds, insurance companies, foreign sovereign wealth funds and other very large scale institutional investors who are looking for very secure long term income paying investments with a return compatible with the risk.
These blended investments would shelter the newsroom from coverage pressure.
We’ve had a few L3C newsrooms, but I’m not sure the timing was right or that the folks who started these newsrooms, smart as they are, really understood the operating principles of the Social Web at the time.
In addition, the L3C concept itself has been under some fire and the smoke has yet to clear, although some advances have been made. I’d like to revisit the ideas inherent in this “crowd funded” newsroom and the status of the L3C in an article soon.
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I’m wrapping up a campaign on Beacon for reporting on fracking, and my project reached its target of $10,000 a couple of days ago. I’m happy to talk about it if you want.
https://www.beaconreader.com/projects/the-frack-lab
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[…] a interrogarsi sul futuro della professione, sulla sostenibilità economica (Steve Buttry sul modello del crowdfunding), sulla validità della carta (David Carr sul New York Times, e Kevin Sablan di OC Register), su […]
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[…] critics continue to wonder about the future of the profession, the economic sustainability (Steve Buttry on the crowdfunding model), the validity of the paper (David Carr of the New York Times, and Kevin Sablan of OC Register), […]
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[…] Mais ideias estruturadas por Steve Buttry sobre o crowdfunding combinado com outros modelos de negócio tradicionais para os media. […]
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