Launching a journalism nonprofit

April 2, 2009 4:15 PM

You may have heard of MinnPost.com, voiceofsandiego.org and propublica.com. All are nonprofit websites dedicated to quality journalism. All must have had their start somewhere. I’ve had a similar idea. I’m an editor at a small local daily, although I’ve had a long stint as a pretty good political reporter. Three reporter friends and myself are looking at founding our own nonprofit online-only journalism organization dedicated to state politics. I should note that all of us have some pretty strong credentials and between us have won a number of awards, so we know we can handle the reporting end of this venture.

Here’s the rub: We know a lot about politics, but we don’t know anything about nonprofits. Or launching a small business, which is essentially what this is.

Well, OK, we know a bit about them. But the major problem we’re running into is the best model for a) raising money; and b) not losing our jobs. We’re in a chicken and egg situation. We need to raise money to start the venture; but we can’t start the venture until we have some money.

Crunching some numbers on operating and capital costs, we’ll need about $300,000 for the first year, not necessarily all at once. (For example, in one potential plan, we’d like to build the website first as a template to show potential donors. Then, if we raise enough money for the next phase, one of us would start work reporting for the site. As money comes in, the rest of us would transition from our full-time employment to the nonprofit venture.)

One of our number is employed in a non-journalism related career right now and believes she can do the development work for us, although she has little experience in that venue.

So, more specifically:

• How do we approach foundations and other funding organizations and ask them for money if we don’t have an actual product in hand? Do we need the product, or is a business plan enough?

• Confidentiality: Naturally, I need to keep my job for now. It’s a bad economy. I have kids to feed. I need the medical coverage. Can we approach foundations with some form of nondisclosure agreement? Are they open to that?

The community I’m from is pretty tight knit. All the power players know each other, which leads to the worrying possibility of a leak making it back to my employer. Should we focus instead on seeking out-of-town funding? My thought is that once we have the seed money and can go public, we can seek local support.

Any nonprofit experts out there who can lend a guiding hand or some in-kind support? Can anyone point me by way of other nonprofit journalism sites we can explore?

posted by Gagglehack to media & arts (8 comments total)

I need to keep my job for now

Then don't try founding a new business, which is more than a fulltime job in itself.

Seriously. This isn't the sort of thing you do in your spare time. It also isn't the sort of thing you do and expect your boss to not find out about.
posted by ook at 4:24 PM on April 2

Ouch. But onward: yes, you can approach a foundation without a product in hand. A really good, really well presented idea can be a starting point. You need a great business plan. research the foundations that you're interested in, find out what their criteria and application processes are. If possible, meet with someone first. As for the NDA, not likely but it's something you can find out about in the above-mentioned process. They'll all be different.
posted by otherwordlyglow at 4:24 PM on April 2 [1 favorite has favorites]

Then don't try founding a new business, which is more than a full time job in itself.

I guess then, following logically on from your point, Ook, no one who is enjoyed full time can start their own business? With respect, that's absurd. Personally, this is a venture that not one, but four people are committed to. I think all of us together just might be able to find the time build a business.

Otherwordlyglow: Thanks for your excellent advice. It's much appreciated. We not only hope to have a detailed and comprehensive business plan in hand, but also a template for the website and a background of work we hope illustrates our abilities. Oh, and passion. Lots and lots of passion.

Thanks for your answer.
posted by Gagglehack at 7:03 PM on April 2

In my experience, yeah, companies founded by people who are trying to hang on to their day jobs at the same time tend to fail. Of course, I'm not in the nonprofit world; maybe it's easier there.
posted by ook at 7:26 PM on April 2

I was on the board for a non-profit (and did all the tech work for) that did CJ and was approached to be the tech guy for MinnPost. I turned it down (was a full-time position, already have one), so that's where I'm coming from.

MinnPost uses Drupal as the backend, which saves them in both time and money. A well-administered Drupal installation allow you to concentrate upon the content and not the delivery/technical bits.

Their template is a slightly modified base template, replicating it would take a couple of hours.

There's really nothing to it, it's a solved problem. Concentrate on finding people to consistently deliver daily content (burnout is high) and someone to seed and monitor the comments/feedback.
Feel free to Mefimail me and I'll be happy to chat.
posted by unixrat at 7:59 PM on April 2 [1 favorite has favorites]

the major problem we’re running into is the best model for a) raising money; and b) not losing our jobs

With all due respect for your excellent motives, this is exactly the problem facing the entire news sector right now. If there were an easy answer, you wouldn't be the first to stumble on it in AskMe.

If you're looking for foundation support, it's limited and time-consuming to get, and it's not on the order of $300,000 for a startup anyway. So for that kind of money, you need a private donor (in a nonprofit model) or a venture capitalist (if you structure this as revenue-generating), and that's just traditional development work - identifying prospects, sharing a prospectus, basically running a capital campaign for startup costs. Those costs for a startup npo are super high, though.

If you approach foundations, you don't set the terms - they do. You can't negotiate a "nondisclosure agreement" or anything like that in most cases - they're providing the funding, and they describe what they're after. Usually they're after a model that can be replicated or at least generate some best practices for other to follow (see: Pew, Knight Foundation, etc). So they're not going to let you be secretive. they generally demand a full report which is made public. If you require nondisclosure you really require a private funder. OTOH, if you apply for grants, your employer won't hear about it until you get the award - presumably under the name of your new nonprofit, not your own name - so you won't be blowing anything for months at the very least. Even so, your awards would be more in the $10-50K range than the $300K range. So don't quit your day job.

I think you really need to spend much more time researching this sector. Find out what's happening with nonprofit news funding models; do some phone work, informational interviewing, benchmarking, that kind of thing. Then, look at some for-profit news startups (I don't think you'll find many). Your goals are good, but your instinct is correct: you don't have a grasp on the funding landscape or how to put together a sustainable funding model for news ventures. The thing is - nobody does. If you're very motivated and experienced, then you might just be the right bunch of people to find the niche that no one has exploited yet and to succeed. But you're not going to find it here, on AskMe. You're going to find it with a diligent survey of what's happening across the board, in the entire field, and then some truly strategic visioning (perhaps with consultants that you pay out of pocket) that puts you out in front of the general reactionary trends in this area.

I wish you good luck, but it's a really big project, especially at the scale you're imagining. Start with research, and then go back to the drawing board to put together a business plan with some sort of strategy: public funding, private funding, a combination, revenue generating for investors, or a public/private partnership -- all are possible, but you need to know more about business models, what's working and what's failing, before you structure your venture.
posted by Lipstick Thespian at 8:59 PM on April 2 [1 favorite has favorites]

For instance, Pro Publica was funded by a pair of multibazillionaires who gave it $10 mil as startup. Coverage of Pro Publica also mentions some other foundations such as MacArthur, but one thing to know is that it's a hell of a lot easier to draw additional money to a project once you're on the doorstep saying "We've already got $10 million, do you want in?"

Basically I think you need an in-depth crash course on fundraising and experimental news funding models, and you can give it to yourselves, but it's basically all original research and analysis. You'll just have to research it as you would any other story.

And, like most nonprofit ventures, it's not really a chicken-and-egg story. It's just a chicken story. You have to lay out the effort and do the research before there's any sight of an egg anywhere. It's a risk you take as you invest the time to perhaps pull in the reward. Very few worldchanging ventures start with the funding. Instead, they start with ideas, passion, research, volunteer time, personal investment, and preparation, which eventually draw in the funding. It almost never happens the other way around.
posted by Miko at 9:11 PM on April 2

Foundations supporting journalism in new media:

McCormick Foundation
Neiman Foundation
Tow Foundation
Knight Foundation

After informational interviewing and a survey of the field, a good next step might be to hire a development consultant to identify available funds from these and other sources. That research is worth good money, and someone who knows the foundation world already and has contacts will get you much farther.
posted by Miko at 9:12 AM on April 3