The non-profit business model for journalism - who's doing it and does it work?
Digital disruption has laid bare a harsh truth about publishing – the noble pursuit of public interest journalism is very expensive and not very profitable, if at all. How do you deliver journalism considered vital to the functioning of democracy without a commercial rationale?
When they had huge circulations and a grip on advertising budgets, news organisations were able to shoulder the burden of big editorial costs. But falling readerships and increased competition have changed that.
Large swathes of public service journalism have become untenable. As the German analyst Peter Littger has argued on this site: "The intention of saving society has turned into the existential threat to the intended saviour."
Is there another way? Many hardened hacks balk at the suggestion of state or charitable funding - but a new breed of non-profit journalistic organisations are emerging to fill the gaps. So how do they work and do they have a future?
Sustainable non-profit model for news?
One of America's best-known non-profit journalistic organisations is ProPublica, which was in 2009 granted three years of annual funding of up to $10 million by Herbert and Marion Sandler, of the Golden West Financial Corporation. But that arrangement has ended - the Sandlers now contribute around $4 million, with other donors making up the rest.
ProPublica president Richard Tofel tells TheMediaBriefingthe organisation has diversified its sources of funding "in the interests of long-term sustainability".
Tofel says Pro Publica isn't adverse to making money from its stories, but the meagre $38,000 in commercial revenue the organisation earned in 2012 shows how difficult it is to generate revenue from cash strapped commercial news outlets.
"We charge some, we would love to charge more," says Tofel. "But as you know it's a tough time in the journalism business."
Tofel points out however that non-profits are only interested in profits that can be plowed back into reporting, not revenues.
"Bottom line growth would be great, but we're not interested in growing revenue," he says. "The top line is sort of useless from a non-profit perspective, because you can’t recognise or realise the enterprise (sale) value of the organisation."
The London-based The Bureau of Investigative Journalism (TBIJ) is also funded by philanthropy, initially a £2 million donation from The David & Elaine Potter Foundation.
In the main it gives away stories to newspaper partners for free, but does take fees from TV commissions to "cover costs".
TBIJ has also recently launched a separately funded project called Naming the Dead, which seeks to identify civilians killed in drone strikes.
A key difference between the Bureau and ProPublica is their tax status. In the US, the Inland Revenue Service is (relatively) happy to class appropriate journalistic organisations as non-profit. In the UK, charitable status is required to receive similar perks, and the Bureau is campaigning to make it easier for journalistic organisations to achieve it.
Pro Publica employs 45 staff, of whom 39 are journalists, and the organisation's 2012 accounts show it spent more than $8.6 million staffing costs alone.
Tofel says around 85 percent of ProPublica's budget is spent on news, but that is more to do with having freedom from a legacy print business than being a non-profit.
"That is not that unusual for an online news organisations, but very different from legacy organisations where they spend something like 15 percent," he says.
"I think you could run any online news organisation like this. You don’t have to spend as much money on printing, paper, those sorts of things.
"We spend a fair amount on raising money, but we haven’t spent any money on advertising sales because there doesn't seem to be much out there."
At the TBIJ, the split is similarly heavily weighted towards journalists. It employs nine journalists and researchers, one administrator, a managing editor Christopher Hird and various interns.
For non-profits, reliance on philanthropic funding throws up a problem. How do you measure success when you aren't motivated by profit, revenues or any of the other measures obsessed over by finance directors?
Non-profits are theoretically motivated by the goals and aims lain out by their boards and founders, but how do they define progress towards those goals?
Tofel says Pro Publica’s guiding goal is “impact” something he has written about at length for Pro Publica in a this document (incidentally itself charitably funded by the Bill and Melinda Gates Foundation).
Tofel divides impact into two areas, informing the public and changing society, both of which form key parts of a regularly updated Tracking Report used by ProPublica.
For the former, the metrics that are stock and trade for newspapers and their sales teams actually make a lot of sense.
The total number of people who read an article, how much it is shared, the number of times it is republished, are all valuable indicators, and form a key part of the Tracking Report.
However, Tofel is, like many in the ad industry, skeptical about some of the less sophisticated methods of defining "impressions" and measurements that take in total circulation.
The second measure, actual change resulting from a ProPublica story, is far harder to define, and must be measured on a more anecdotal basis. Examples of changes include actions from official bodies such as statements or legislative changes, opportunities for change such as hearings, and concrete results.
"These last entries are the crux of the effort," writes Tofel. "They are recorded only when ProPublica management believes, usually from the public record, that reasonable people would be satisfied that a clear causal link exists between ProPublica’s reporting and the opportunity for change or impact itself."
These results feed into one-off Impact Reports, and some successes are publicly claimed by ProPublica on its website.
TBIJ is currently in the process of redefining how it measures success in the aftermath of the calamitous libelling of Lord McAlpine, in which former managing the BBC's Newsnight inadvertently linked the Tory grandee to allegations of child abuse.
That debacle led to the resignation of Overton, and his replacement Hird says the Bureau are in the process of re-evaluating how they measure success. However, his broad description of the Bureau's goals mirrors the more defined criteria set out at Pro Publica.
He tells us: "I think anybody knows that an organisation that is for profit measures its success by the amount of money it makes.
"In the context of public interest journalism, what we will be looking for is how far do we help the public as a whole to better understand the world."
Does it work?
The journalistic success of these enterprises is undoubted. ProPublica can point to a string of actions that have followed its coverage on areas such as presidential pardons, fracking, the New Orleans Police. TBIJ has had a number of high-profile stories covered nationally, and can even claim to have influenced the UN to set up an investigation into drone killings.
But even assuming the continued benevolence of their donors, these non-profits must constantly justify the worth of their journalism beyond what people (or advertisers) are prepared to pay for. That's difficult when, as even Tofel admits "there is no one reliable measure of journalism’s impact".
Commercial organisations face brutal market conditions and fickle consumers, but the rules of the game are clearly defined. Until non-profits can find a way to become independent of philanthropists, they have to rely on continuously proving themselves to benefactors with subjective measures of what is and isn't good journalism.
Fonte: themediabriefing.com/ Jasper Jackson