Posts about notforprofit

Profitable news

One of the most controversial things I have said (you’re welcome for that straight line) is that I insist my entrepreneurial journalism students at CUNY build only for-profit businesses. When I said that at a recent symposium for teachers of entrepreneurial journalism, I thought some of the gasping participants would tar-and-feather me.

I’m not against not-for-profit, charitably supported journalism any more than I’m against pay walls. I, too, crunch granola (and sell books). But I do not believe that begging for money from foundations, the public, or especially government is the solution to journalism’s problems. And I am certain that there is not enough charity in the nation to support the journalism it needs. Lately we are seeing too much evidence that the siren call of not-for-profit journalism seduces news organizations away from sustainability, survival, and success (more on the Chicago News Cooperative and Bay Citizen in a moment).

I insist on teaching our students the higher discipline and the greater rigor of seeking to create profitable enterprises. I also believe they are more likely to build better journalistic products, services, and platforms if they are accountable to the marketplace. When class starts, many students invariably talk about what they want to do. In my best imitation of a gruff old-timer, I tell them nobody gives a shit what they want to do, save perhaps their mothers. They should care about what the public — their customers — want and need them to do. They need to care about the market if they have any hope of the market sustaining them. That is why they start every term talking with the public they hope to serve. They always come back with surprises.

Of course, the market, too, can be corrupting. I’m tempted to use Rupert Murdoch as the best exhibit of the argument, though in that case, it’s hard to tell which came first, the rabid chicken or the rotten egg. In the long run, cynically giving the public only what it thinks it wants will not deliver value and will fade like the fad it must be. I have that much faith in the market.

And, of course, we can point to many valuable and well-sustained not-for-profit news enterprises: NPR is the best we have, but as its former CEO Vivian Schiller has said, it is very much run like a business, complete with advertisers (pardon me, [cough] underwriters). Texas Tribune is doing a brilliant job of bringing in the support needed to continue its brilliant work (though I argued with its founder and funder, John Thornton, a venture capitalist, that he’d serve the news industry better by demonstrating profitable models). Pro Publica is already a national treasure (though let’s note that it had to get a grant from the Knight Foundation just to figure out how to diversify its funding beyond its original patron, mortgage man Herb Sandler).

But there are other less shining examples. Now we turn to the Chicago News Cooperative, which just announced its closing. It found itself too dependent on a foundation (MacArthur), a customer/benefactor (The New York Times), not to mention the IRS (which needs to clarify the rules for not-for-profit news). Dan Sinker argues that it never met is promise of building news with the community.

Then there’s the Bay Citizen, which ran through $11.4 million in 2010 [see this comment for a correction] before collapsing last year; it will merge in still-uncertain terms with the better-run, more penurious Center for Investigative Reporting. When the Bay Citizen started with a pot of cash from investor Warren Hellman, I remember the San Francisco Chronicle complaining that this non-market player could unfairly compete with the paper and hasten its demise, an unintended consequence that didn’t come to pass mainly because the Bay Citizen was to terribly run. Non-market entities often are.

I recently judged a contest for an international journalism organization that received a large grant from a very large corporation to fund journalism startups and — here’s why I’m naming neither — I was appalled at the complete lack of thought that went into sustainability and responsible fiscal management in every one of the proposals. I urged the organization to not give away one penny and to start over. It didn’t quite do that.

The problem is that journalists don’t know shit about business. Culturally, they don’t want to. I often hear from journalists who are downright hostile to corporations and even capitalism not because they’re commies but because they believe they’re above it all (there is the root, I believe, of much of their cynicism about Google and other large technology companies). As I’ve said here before, when I came up through journalism’s academy, I was taught that mere contact with business was corrupting. I’ve had bosses scold me for considering the business of journalism. When I started Entertainment Weekly, I could not protect my baby from the expensive idiocy of my business-side colleagues because I didn’t have the biz cred. I vowed that would not happen again. That’s why I insisted on learning the business of journalism.

That is why I insisted on teaching the business of journalism. For we journalists have proven to be terrible, irresponsible stewards of the craft and its value to the nation. Feeding at the teat of monopolies, we grew fat and complacent and snotty about the markets we were to serve. We wasted so much money on duplicative, commodity coverage for the sake of our egos. We were willfully ignorant of how our industry operated and thus how it is dying, making us complicit in its death. We have only ourselves to hold responsible.

And that is why I so respect my friend John Paton, a newsman’s newsman who learned the business of journalism and is taking responsibility for its fate, as head of Digital First Media (where I am an advisor), which now runs the second-largest newspaper group in the U.S. John does not have the answers but he does have the questions and he’s not afraid to challenge executives in our industry with them. He’s willing to disrupt and experiment and learn. And he’s willing to teach what he learns. “Crappy newspaper executives,” he just said, “are a bigger threat to journalism’s future than any changes wrought by the Internet.”

Yes, it’s not just not-for-profit thinking that’s dangerous to journalism. It’s the unprofitable thinking of for-profit news companies. That is why, again, I insist on holding students and the industry they’ll lead to the more diligent standard of true sustainability. That means profitability. There’s nothing wrong with that.

Charity or collaboration?

The New York Times has accepted free stories from ProPublica. It has endorsed a journalist getting help from the public via Spot.US to underwrite a story that might appear at NYTimes.com. And Poynter’s Bill Mitchell says the paper is even wondering about foundation support for its work (but for perspective, I suspect one could safely say The Times is wondering about any possible economic model of support).

All this is being viewed as charity: giving The Times gifts directly or indirectly to produce journalism in its pages, physical or digital.

I think that’s looking at it – and at The Times – the wrong way. I prefer to think of it as a few of many possible forms of collaboration to create journalism that may or may not appear in the paper (and to which it may or may not link). I prefer to think of the paper as the organizer of networks of journalism.

Thinking that way, then when The Local, the hyperlocal blog at The Times, asked for a volunteer to cover a meeting it wasn’t planning to cover, you could say that it was asking for a charitable act. I’d rather say The Times was opening up to collaboration.

And let’s say that a local blogger covers the meeting and reports on it on her own blog and The Local takes advantage of that by aggregating, curating, quoting, and/or linking to that report. The net result is the same but that’s not charity. It’s cooperation.

Go one step farther: Say that The Times lends a video or sound recorder to that blogger so she can better report on the meeting and provide more coverage to her and The Local’s readers. Is that support an act of charity to the blogger? No, it’s collaboration. (By the way, this will be happening when CUNY provides equipment and training to members of the communities in The Local’s footprint as part of a Carnegie Corporation grant we just received.)

When we define The Times solely as a commercial institution that produces and controls an asset – the news – then any provision of money or effort to it appears to be charity.

But when we define the news as the creation of a larger ecosystem and The Times as just one member of it, then help – money, effort, equipment, training – instead appears to be collaboration.

And once one looks at the ecosystem through the lens of collaboration, then many other things are possible: then The Times (or any other member) could organize many members to work together to produce journalism no one of them could do alone. Then we start to account for the value of the work of the entire news ecosystem not based solely on the size of the staff of the last newsroom standing in the community; we open up to volunteer and entrepreneurial effort that can expand the scope of journalism far, far past what that one newsroom could do.

So I say that The Times and other papers opening up to the work of others supported by others is not an act of begging and charity if it is one bit of evidence of opening up to collaboration.

Now having said all that, I’m aware of the issues that are raised by giving of any sort and Clark Hoyt‘s and Bill Mitchell‘s columns address many of them: the potential for influence from the donor leading the list. There can also be tax questions (only a gift to a 501c3 is a charitable deducation and when is value received by a for-profit company taxable income?). There are labor delicacies when volunteer take on the work formerly done by staffers (there’s one of the reasons that professional journalists sneer at citizen journalism; it’s not always about high standards but instead about self-interest).

Still, I say it’s important to open up journalism and its institutions and players to many kinds of collaboration in a new ecosystem. That cooperation should extend to the commercial – revenue – side of the equation as well, as advertising and ecommerce networks enable each member of the ecosystem to gain more value together than they could alone. This is a key assumption of our work at the CUNY New Business Models for News Project.

One more caution: As we debate and explore the opportunities for charitable and volunteer support of journalism, it is important – critical – that we not declare surrender against the hope that journalism can be sustained in profitable enterprises. This is the keystone of our NewBizNews work at CUNY. We will estimate how much charitable support is possible in a market and what it can buy. We will also emphasize the importance of including volunteer effort in viewing the value of the ecosystem. But we also stipulate that none of that – not foundations, not the goodwill work of bloggers and neighbors – will support the level of reporting and journalism a community needs. And we believe that the market will support journalism – even the growth of journalism – commercially. We are working on models to examine how both the revenue and efficiency of enterprises in the ecosystem – news organizations to bloggers – can be optimized (we’ll be putting out models as we get closer to our first August deadline).

: LATER: Include in this discussion HuffingtonPost’s charitably supported investigative arm; the new Texas Tribune supported by VC John Thornton and friends; and a new philanthropically supported investigative unit in the U.K. They are not the future of journalism; they are part of it.