Open, but not for free: perspectives for non-profit newsrooms

Notes from the Journalism Funders Forum’s Expert Circle in Düsseldorf

Campfire Festival 2018. Photos: Adam Thomas, David Schraven, Eric Karstens.
“When I said that we were getting rid of the rules of the business, I didn’t mean that we were getting rid of the business.

This sentence summarises a key finding of the debate at the Journalism Funders Forum’s Expert Circle in Düsseldorf, Germany, on September 1st, 2018. The meeting took place as part of the Campfire Festival, a public journalism outreach event organised by non-profit investigative newsroom Correctiv.

A great part of the current debate about future business models for journalism implies that news organisations need a strategy to remain commercially successful — or to become profitable in the first place, for that matter. Striking a different tone, the 25 Düsseldorf participants discussed under the Chatham House Rule what it takes to run a non-profit newsroom. The reasons to go non-profit are plenty:

Refusing the market logic

Perhaps most importantly, you are able to escape the market logic, which dictates that you focus on growing your audience, covering the most popular topics, producing contents non-stop, and cosying up to advertisers.

With all that out of the way, you can effectively shed the limitations of for-profit operations, which often cannot or will not afford extensive journalistic research and long-form stories. Instead, you may find yourself in a position to develop a story on its own merit, and you can do whatever it takes to report it, no matter whether there is a predictable (and marketable) demand for it.

As one participant noted, working for a non-profit news organisation actually allows journalists to stick with the world-changing idealism that made them choose this job to begin with.

But the question also has a political dimension. There are many cases where it is advised to set up a private company — albeit a non-profit one –, rather than, say, a foundation or association. This holds true in particular in countries where press freedom is under pressure: their governments (think, for instance, Hungary and Poland) find it much easier to regulate and rein in civil society organisations than private companies.

Operating under the rules of commerce, instead, may shield you from too much political oversight. At the same time, you remain entirely flexible with a view of the future: While foundations are pretty much set in stone once established, and NGOs can easily be prohibited, you can move a company to another country without too much difficulty, give it away to new owners who can guarantee its independence and integrity, or change its constitution and mission at any time necessary.

Finding the money

Assuming that, as one participant quipped, “at the end of the day, journalism is always losing money”, the key quandary, however, remains: Where to find the cash to run the non-profit newsroom?

The Düsseldorf group discussed a spectrum of ideas. An obvious one is foundation funding, and indeed are foundations playing a major role in rearing innovative journalism initiatives and propping up flailing incumbents.

In fact, it is difficult to imagine our current innovative and independent news ecosystem without them, and their most coveted role is to provide core operational support. A news organisation that has its rent, accounting, administration, and development costs covered by a foundation finds itself much more empowered to produce quality journalism from the get-go. Other foundations sponsor particularly ambitious reporting projects or training.

Participants pointed out, though, that foundations are by no means a panacea for journalism. Operational support is excessively difficult to come by, and foundations tend to think in terms of limited, finite projects rather than long-term commitment.

One foundation representative said that they even had a dedicated programme to wean beneficiaries from their funding, and required them to think entrepreneurially. Moreover, audiences may be wary of such sponsors and their real or perceived influence on journalistic production — relying too much on donors may thus undermine public trust in a newsroom and, accordingly, its future.

The Matryoshka effect

Membership is one way to address this. The Düsseldorf group debated several examples where members contribute money and in exchange get some sort of stake in the news organisation.

This ranges from supporting membership without a say in day-to-day operations or the organisation’s mission, to legal co-ownership with voting rights. In contrast to a for-profit company, any dividends are out of the question as a matter of course — members are expected to support the cause without expecting a financial return. One participant explained: “A non-profit organisation is about a different kind of profit, that is, a profit for society.”

But as yet there are few, if any, examples where membership alone has managed to sustain a vibrant non-profit newsroom. So, some do not rule out advertising but allow it under standards compatible with their overall mission. Others engage in all kinds of compatible commercial and fundraising side-activities in order to cross-subsidize their journalistic work.

One speaker compared this to a Matryoshka doll, which has multiple nested layers that protect and sustain the inner core. Such self-earned revenue, even if it is of a commercial nature, helps ensure the freedom and independence of a non-profit news organisation.

And as a beneficial side effect, many fundraising activities — such as publishing books or organising conferences and festivals — help forge a community of supporters and increase the audience’s media literacy and capacity of discernment. Hence, as one participant observed, money-making activities may even create a positive feedback loop with the public.

So, even as non-profit journalism is perhaps not a business model in the strict sense, it still requires all kinds of business expertise to create a sustainable funding model. This chimes with a statement by a member of the Expert Circle, that “our work is open, but not for free”.

All participants were adamant that non-profit journalism must be openly accessible without subscriptions or paywalls, but nonetheless, it costs substantial money to produce. That’s a difficult balancing act to manage. And it is particularly difficult for newcomers who need a critical mass to attract foundation funding, members, or commercial sidelines.

Several participants complained that their efforts to start non-profit news organisations forced them into utter self-exploitation — often so badly that they eventually had to abandon their high-flying plans.

Gaming the system?

The workshop concluded with a simulation game, which challenged participants to select a limited choice of staff and other resources they would prioritize as founders of a non-profit newsroom.

The game yielded two major insights: First, it became immediately clear that any such organisation vitally depends on people who can fill multiple roles simultaneously; if you are “only” an investigative journalist, or “only” a website developer, financial manager, or lawyer, chances are that your endeavour will fail.

That’s a tall order — even in case you are proficient in two or more professions (which many journalists are out of sheer necessity), you will probably need to identify wholeheartedly with all of them in order to be successful in such a challenging environment.

The second major observation was that out of five game teams, only one mentioned impact measurement. Impact, of course, is a concept championed in particular by foundations and public donors, who need to explain and justify their spending. As a result, they also demand impact reporting from their grantees.

A non-profit newsroom, however, liberated from market logic, might just know its impact implicitly: It can’t help but notice the ripple effects of the latest scoop, the rise and fall of membership, or the level of ownership it inspires across a community. Or perhaps none of this might be the actual goal; perhaps sometimes, quality journalism is also an end in itself.

Originally published at wordpress.karstens.eu.