Donations
Matching causes and know-hows
This text is part of a comprehensive look at the Brazilian news environment.
The combination of advertising and paid content is to startups as donation is to nonprofits. The Knight Foundation released on April 2015 the third study of a serie started in 2011, “Gaining Ground: How Nonprofit News Ventures Seek Sustainability[1]”, in order to measure and track the outcomes of nonprofits news sites. After comparing the numbers of the organizations on the first study with the results on the third, they found evidences pointing that this is a field in frank expansion. Their average revenue of those ventures increased 73% from 2011 to 2013 and their web traffic grew by an average of 73%.
“Nonprofit news organizations offer the potential to become part of the bedrock of a strong local news and information ecosystem. The field of nonprofit news (…) has continued to scale its impact and inch closer toward more sustainable business models. But progress has been uneven and for the majority of organizations in the study, sustainability is just a premise on the distant horizon,” said the authors, after stressing that nonprofits are still reliant on one type of donation, foundation fundings.
Nevertheless, the authors also identified some effort to diversify their sources of revenues. The few initiatives who tried were successful with it. The three most used ways of earning revenues they found were advertising, syndication and sponsorship.
“Too few organizations have seriously piloted new earned income strategies, but the ones that have tried have experienced initial successes attracting new forms of income, from native advertising to sponsorships for events and webinars. Lasting viability for nonprofit news ventures will only come with reduced reliability on fickle philanthropic funding,” the report stated.
In this research, five out of ten media ventures are nonprofits, a proportion that shows that in Brazil opening NGOs is a current way of starting a news business. As the Knight Foundation’s study suggest, the Brazilian nonprofits are, in general, aware that they must diversify their revenue streams. In this sample, the organizations are using strategies like specialized reports and contents on demand, as already discussed.
This section will divide the types of donations into funding and grants, sponsorship, philanthropy, crowd and individual funding. However, there are two important details to stress. One, because for the most cases donation was just part of the revenue, nonprofits are present in other sections of this research. Two, this donation section is not exclusive for nonprofits. We have the explicit example of Catraca Livre using sponsorship and also I did hear some companies in our sample saying that they are aware of grants they can apply for or that crowdfunding is also on their radar.
Fundings and Grants: the first choice of (almost) all nonprofits
Escola de Dados, InfoAmazonia, Ponte, Mural
Raising money with foundations is a natural move: nonprofits more often than not defend a cause; foundations are also driven by a cause. When both principles and purposes match, a foundation may be inclined to fund that initiative.
These funds are essential not only to entrepreneurs start their organizations, but also to maintain its operations. With nonprofit news sites gaining ground, foundation funding and grants assume the important role of stimulating new experiences to emerge in journalism and fostering innovation.
In Brazil, the ecosystem of foundations is not strong enough to support the emergent scene of media organizations. That is why the cases studied here opted to fundraise abroad, usually with international institutions related to their cause.
That is the case of InfoAmazonia, whose business model is also being discussed in the technology and training sections. Launched in 2012, InfoAmazonia started as a special project inside the website O Eco, a NGO that produces news about environment.
The idea was to create a network of journalists, organizations and media outlets interested in using data to report about deforestation, forest fires, mining and other sorts of threats to the Amazon rainforest region. This area includes nine countries in South America: Bolivia, Brazil, Colombia, Ecuador, Guyana, French Guyana, Peru, Suriname, and Venezuela. InfoAmazonia would be producing new content, as well as being a hub where curated information from other vehicles could be shared.
The specificity of the InfoAmazonia value proposition showed that the project would be strong enough to raise funds and tread its own path. So it did. Gustavo Faleiros, its coordinator, applied for international grants and in 2011 received the support of the Knight Foundation. “From this moment on, was easier to approve other grants,” says the journalist.
Using satellite photos, data, maps, and graphics with constant (or even real-time) actualization, the platform was officially launched in 2012, during Rio+20, an international conference on sustainable development organized by the UN in Rio de Janeiro. In three years, InfoAmazonia has had projects financed by a basket of other international and Brazilian organizations.
Some maps are available with captions in English, such as the one that describes forced labor in Amazon or the tool that shows a correlation between murders and deforestation in the region. The special project about deforestation, launched in March only in Portuguese, is another good example on how their multidisciplinary team put together data visualization tools, videos, audios and text to explore a theme.
Besides journalistic content and updated datasets, InfoAmazonia also develops tools that are being used by countries in Africa and Asia to monitor their environmental issues. All tools are available for free, according to the Open Source movement, of which they are part. However, InfoAmazonia team also help to implement them, as it is going to be discussed in technology and training sections.
Escola de Dados (School of Data) is another an example of an organization that is backed mostly by international organizations. They are the Brazilian arm of School of Data, a new global nonprofit that offers training on data literacy for students, journalists, citizens and other nonprofits. In Brazil, the activities started to be organized in 2013, backed by the nonprofit Open Knowledge Brasil, but it was in 2014 when a clear mission and more specific goals were set.
They apply to all sorts of grants in order to get funds to develop special materials and offer trainings in public universities.
“We are still experimenting formats, getting in touch with universities and companies. Because we are starting a discussion about data in Brazil, we are acting as evangelists,” says the coordinator Marco Túlio Pires, who is also cofounder of J++, analyzed in this research.
Escola de Dados’ actions in Brazil has been more frequently linked to empower journalists and journalism students. Two workshops were done, one in partnership with UFRJ (Universidade Federal do Rio de Janeiro) and one with UFBA (Universidade Federal da Bahia). “We want to influence a change in the curriculum of Brazilian journalism schools. We need to form journalists apt to excel in digital platforms using data,” says Pires, stressing that grants help them to offer courses with a very low rate or even for free, if possible.
“But we also want to help journalists who are in the ground to develop digital skills and to work with the other companies and also the civil society,” adds the entrepreneur. In those cases, the training or the consultancy on data become a source of revenue.
Mural adds an interesting point to the discussion. While this website is being written, Mural works as a network of hyperlocal journalists that reports on relevant issues to the outskirts of São Paulo. The blog is hosted by the paper Folha de S.Paulo, which pays a monthly fee to help supporting the writers’ job. However, the plan is to create a separate agency where Mural could develop new projects and products.
Izabela Moi, its coordinator, is still in the process of considering the best juridic option for this agency, but she is inclined to start it as a nonprofit mainly because the bureaucracy and the difficulties of raising seed money in Brazil may complicate the creation of the agency as a company. “It’s a hard choice, especially because we are talking about a network of 60 journalists. Being a nonprofit and raising seed money as such seems to me a more likely path,” she says.
Sponsorship
Leveraging the charisma of the founder on Catraca Livre
Sponsorship is another kind of donation that may support media companies and nonprofits. Normally it involves agreements among the parts with some sort of commitment. Among the cases studied, this is a method used by Catraca Livre. In turn to the values received, it promotes the brand in a privileged place of the homepage.
As mentioned before, sponsors were responsible for the main revenue streams of Catraca Livre for its first years — something completely reliant on the figure of the founder, Gilberto Dimenstein. However, while the website was increasing its traffic and size, other earning sources were being added, diminishing the reliance on this revenue stream.
Even with diversified income sources, sponsors still play an important role for the financial plan. There are currently 14 brands in this type of partnership. Together, they are responsible for injecting in the business R$ 150,000 (USD 50,000) per month in the business.
Philanthropy: the uncommon case of depending on one source
Porvir
The practice of donating to a certain project is quite common — and even stimulated — in countries like the US. Nonetheless, this is not an usual practice in Brazil. No wonder Porvir[2] is one-of-a-kind example and has a business model hard to be replied. It is the only case, among the ten analyzed, that relies on only one revenue stream: the donation of one family.
“What we have is a great privilege,” states Anna Penido, director of Inspirare, a familiar institute focused on innovations in education of which Porvir is part. Launched in 2012, the news agency reports on new projects and approaches for education. Their goal is to bring new ideas that are circulating all over the world and help educators, parents, politics, and decision makers in general interested in improving the Brazilian education.
“We are free to write about what we think is newsworthy, without worrying about sponsors or advertisers. Because we are not promoting anything but education, we have legitimacy and credibility,” states Penido.
Besides daily articles, Porvir’s staff gives lectures about trends in education, supports other media organization in helping them to find specialists and new approaches, promotes workshop with journalists, as well as organizes thematic events. All those products and services are offered for free, not representing a source of revenue for the website. In three years, Porvir had published about 3,500 stories, has had more than 2.7 millions unique visitors and 191,000 fans on Facebook.
Users donation
Crowd and individual contributions for Mural and Ponte
Crowdfunding is when an initiative is collectively financed by users who want to support a certain project, person or cause. There are a few platforms where ideas can be pitched. Usually, the proponents set the amount of money they want to raise, the period in which the campaign will be running, present the idea in text and video, and detail rewards to donors. While the campaign is on air, anyone can donate.
The most frequent system used is the all-or-nothing funding: if, by the end of the period, the pre-determined amount of money was reached, the initiative will be financed. If it doesn’t, it won’t receive the donations (neither the donors are charged).
The researchers Sirkkunen and Cook, who led a study with 69 media organization in seven countries around the world, found crowdfunding as a method that is being used by some initiatives, but for special occasions. “Since crowdfunding came under the spotlight with initiatives such as Kickstarter.com and Spot.US[3] more news startups have given it consideration, if not as the business model overall but for one-off projects,” said the authors.
Kickstarter is a comprehensive crowdfunding platform where any project can be submitted. The ideas are organized into sections, and one of them is devoted to journalism. In May 2015, 147 projects were being proposed there.
Besides generic platforms, there are also a number of websites specific for journalism projects. Contributoria, Uncoverage and Beacon are just a few examples.
In Brazil, despite being new, this approach is being recognized as a valid and effective way of financing projects. The first Brazilian crowdfunding platform, Catarse, was launched in 2011 with four projects. One, “Cidade para Pessoas,” proposed by Natalia Garcia, was a journalistic project that successfully raised R$ 25,785 (USD 8,500). From then to May 2015, 79 campaigns for journalism were finalized on the platform (plus 14 currently running), of which 46 (58%) were successful. The financed projects raised R$ 834,000 (USD 278,000) with about 9,000 backers. All those numbers are just for Catarse, that is no longer the only Brazilian crowdfunding platform.
Very often the strategy is an option for individual and independent endeavours, which not necessarily can be restricted to Brazil. This May, the Brazilian investigative journalist Leandro Demori, published on Medium the article “Um Trem para Bangladânia” (A Train to Bangladania, roughly translated), about successive imbroglios that prevented Brazil to connect its main two cities by a bullet train. His investigation took almost one year and was crowdfunded in Contributoria.
However, this revenue stream is being used not only by individuals, but by more complex projects. A Pública, an independent Brazilian agency for investigative journalism, has been publicly upholding the method. “The good of crowdfunding is that it allows your participation in any stage [of newsmaking process], welcoming the collaboration of people in different degrees and allowing the project to be ‘embraced’ by them, really,” said the cofounder Natalia Viana, when announcing their second huge crowdfunding campaign to raise money to 10 investigative reporting projects.
In their first round of financing, in 2013, A Pública raised R$ 58,935 (about USD 19,000) with 808 donors. With this money, the agency published 12 journalistic pieces in the course of six months. In this second round of crowdfunding, finished on March, the agency raised R$ 70,224 (about USD 23,000) with 963 backers.
Among the cases studied in this research, crowdfunding is in the horizons of Mural. They expect to use this method to fund particular projects, such as the launch of the website or specific reports.
Besides betting on the power of networks for crowdfunding, another strategy that is being considered by Ponte is not pledging for collective money, but for the user’s money. In this case, the users would voluntarily donate to the website because they believe and want to support that cause. The cofounder Claudia Belfort believes it is a good way of connecting to their audiences, but she is aware that this method will be complimentary to other sources. “There are some cases in the US that are being successful in asking individual donations. It can be of a good help.”
[1] Available at http://knightfoundation.org/features/nonprofitnews-2015/ on May 28, 2015.
[2] I was part of the team who designed and found Porvir in 2012. I left the website in 2014 to pursue my master’s degree at Northwestern University.
[3] Spot.US was a crowdfunding platfmors specifically for journalism retired in February 2015. “Things that didn’t work about Spot.us’ back end were significant, and it would not be possible to scale the platform or improve the user experience without completely overhauling the code base,” said those responsible for Spot.US when announcing the end of the platform. The rise of other crowdfunding platforms specific for journalism was another cause..