Monthly Archives: September 2010

There were moments at #BXB2010 in Chicago on Friday when it felt like a religious war was about to break out. At any minute I expected somebody to yell "PC" and somebody to answer "Mac! Damit!"

The clear divide in the room was over how to fund journalism.  On one side there were the advertising-supported sites, and on the other, the donation-supported sites.

Some of the divide was expressed verbally — one participant got up and stated flatly that advertising is evil — and some of it appeared in the #bxb2010 Twitter stream.

My reaction at first was extreme irritation with the non-profit side of the room, but then I realized — there was also an incredible energy in the room.  Here we had assembled some 40 or so independent publishers who were all putting their careers on the line to pursue a market some industry pundits, even today, dismiss as an digital-non-start: Local media.  

A doff of my fedora to anybody willing to invest their resources and time into community journalism.  It is truly doing God’s work.

This is what led to my little speech about the local community being the foundation of democracy.  I tried to not make my remarks about non-profit vs. for-profit, but I did want to send a message to the non-profits: In your zeal to avoid the stench of commercialism, don’t forget the important role small businesses play in your community.

That said, I do think there is a problem with thinking the grant-funded, foundation-funded, donation-funded, non-profit model of journalism is somehow more pristine, more sacred and less likely to compromise journalistic standards.

I firmly believe the opposite is true, and here’s why:

• You can’t escape the stench of money or making a sales pitch to somebody somewhere, somehow.
• Don’t assume you’re going to do any better getting readers to contribute than you will do selling subscriptions.  Chances are, they won’t.
• You’ve still got to sell yourself.  Are you ready to do PBS-style pledge drives? Who’s going to make the telemarketing calls?  Money will not just magically appear because you declare yourself a non-profit.  No matter how much people love your journalism, only a small percentage will ever click the PayPal "donate" button.   So, to get donations, you must make sales calls. There’s essentially no difference between selling an ad to a business and selling a person on making a donation, so why is selling an ad evil, but begging for a donation isn’t?
• Since you’re unlikely to garner a broad spectrum of donors and build a diverse donor base, you’re going to have to rely on a few key funders. 
• Any large funder who gives you money is going to expect a return.  Either they back your coverage as it is, and you better not change; or, they see a branding benefit to being a major sponsor, which carries its on weight on the credibility scale; or, they have an agenda.  It might be that they simply want a good watchdog of government, but it might also be that they need you to get firmly behind public transportation because the donor’s real source of the money is a company that builds light rail systems.  Some grants are explicit, in fact, about their issue-promotion goals.  In one way or another, you’re selling your soul.
• Even if there is no obvious expectations at the time you take the money, such expectations — even expressed subtly later — might emerge.  Or the source of money may be quite neutral for a long time, but then a pet issue comes up, and now you better bend to the donor’s will.
• Some donors simply come with baggage.  What if you’re in a community where a large casino operation is based?  They come to you and offer to fund half your operations.  You may not see a conflict because they’re based outside of your exact coverage area, but a lot of people are vehemently opposed to gambling and will believe you are a compromised news source because of the gaming tie. 
• You will have to have a board of directors.  This board of directors is likely to be drawn from your community.  Because part of the job of the board is to help draw donations and reassure donors, they will need to be leading citizens. Leading citizens always have other interests — whether they be tied to the political world or the business world, they will bring their own baggage.  And some of them will not understand why you don’t bend your coverage to their personal needs.
• There’s simply only so much charity money available.  Big corporations only need so many tax write-offs, and foundations are besieged by competing charities.  Grubbing for money will get harder and harder as more non-profit news orgs emerge.  No source of revenue is a bottomless well.

In summation, I don’t see how being a non-profit shields a journalist from conflicts of interest, ethical dilemmas or even outright advocacy on the behalf of key donors.

Now, we’ve all heard the stories of publishers ordering articles pulled to suit a particular advertiser, but in my experience, the publishers that cower in such circumstances are facing a much bigger issue than journalistic credibility. They’re main concern is corporate credibility, which is all about cash flow and profit margins.  Nobody at Corporate ever looks at the journalism awards in your foyer or the community kudos for demonstrating an ethical spine. Corporate wants to know one thing: Are you meeting your numbers.

When you’re a independent news organization, the only numbers you need concern yourself with, truly, are paying the landlord and the grocer.

Since your source of revenue in the advertising model is an incredibility diverse group of small business owners, and each of these individual owners account for only a fraction of your overall revenue, you’re not facing much pressure at all from any one source of income. 

There isn’t any one advertiser who could pull his ads from my site in a huff and threaten my business.  As I point out above, that may not necessarily be the case for a foundation-supported, grant-supported non-profit news site.  In the non-profit model, one major donor jumps ship, and the ship might sink overnight.

In the history of The Batavian, not a single advertiser has tried to influence my coverage. 

Of course, I get requests, "can you write something up on my 5th anniversary?" or "can you see something about the Lion’s Club fundraiser?" but these are legitimate soft features or light community coverage anyway.  I do try to fit them in, honestly, if I can, and when I can’t, I find advertisers understand. 

That’s a far cry from the kind of ethical dilemma’s the non-profit crowd seems to believe that for-profit owners might face.

The fact is, the idea that advertisers are constantly meddling in coverage is a myth. The truth is, the small business owner has much bigger worries than how you’re covering the next election, or whether you’re making life hard on the mayor.  He wants to know first and foremost: are you helping to add a few more ting-a-lings to the ring of his cash register.

So, my bottom line: I believe that advertising supported journalism — especially for the small, independent operation — is the purest, cleanest, best way to fund local reporting.

Right now.

Terry Heaton has recently written a doomsday piece about the future — or lack of it — of advertising.

For nearly as long as I’ve been involved in online publishing, people have been predicting the death of advertising.  And death may yet come.

But it’s not hear yet.

And we have a lot of aspiring independent publishers trying to figure out how to fund their dreams.

We can’t lose sight of the fact that, for at least right now, advertising works.  When done right and done well, it works very well.

Also at #bxb2010 there was a lot of chatter about finding new revenue models, in part because of a distaste for advertising and in part because some people have bought into the idea that advertising has no future.

The problem for local publishers, though, is they have no future as publishers if they can’t pay today’s bills.  They have no time for the rest of us to cast about for some creative, disruptive, forward-thinking way of funding journalism.

And that’s the meaning of the headline on this post: "For-proft, non-profit and ???."

Right now, all we know is either grub for donations or sell ads.  Anything else is just a big, fat question mark.  If you want to be in business now, question marks don’t pay rent. They don’t buy cameras, and they don’t even supply note pads.

The vital issue for the aspiring publisher is: Revenue now.

If the aspiring publisher believes the way to go is try and gather enough donations to at least keep a cabinet full of raman, well, God’s speed and God bless.

But there’s also no need to be scared of being a dirty capitalist, selling ads and trying to grow a profitable business.  It’s a place to start.  Only time will tell if it creates the next generation of media moguls or a whole new class of burned out half-wits scraping by on the public dole.

(Note:  There are other business and editorial advantages to advertising, but that will have to wait for another post at another time.)

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