Part of the club

Voice of San Diego's membership model has once again earned the organization a place in the national spotlight. If the model succeeds in San Diego, can it succeed elsewhere?

All join in - In return for their membership in Voice of San Diego, local residents are invited to attend periodic events that often take on an educational bent. The goal is to inform attendees while giving community members a platform to speak up. (Sam Hodgson)

In August 2009, back when conferences on the future of American journalism were still urgent but no longer novel, a former city hall reporter named Scott Lewis sat on a roundtable at The Aspen Institute with former Secretary of State Madeleine Albright, then-Google Vice President of Search Marissa Mayer, and Knight Foundation CEO Alberto Ibargüen. Lewis had forgotten his sport coat but managed to buy one in town before greeting the eminences and settling in for the discussion, which focused on new models for local reporting. It had taken the collapse of the newspaper industry and the loss of more than 16,000 journalism jobs to make the health of local journalism a subject of national relevance, but now it was being discussed at the most elite levels of wealth and power.

The crowd in Aspen believed Lewis might offer a way forward. At 32, he was the CEO of Voice of San Diego, one of the first digital nonprofit local news organizations in the country. Voice was launched in 2005, when newspapers were still strong, to augment what its founders viewed as underperforming local media. As the recession hit and newsroom layoffs mounted, the innovative local experiment became a potential solution to a national panic. In 2008, Voice broke a story about a corrupt redevelopment agency that led to criminal charges against one developer. A few months later, The New York Times ran a front-page story about the small digital operation that was driving coverage of San Diego as the newspaper model collapsed.

The Times story instantly made Voice a fixture of the national conversation, and Lewis and his staff were recruited into the effort to find new models for local reporting in communities throughout the country. “We were this digital operation that was doing the kind of investigative work that everybody was worried might disappear,” Lewis told me. “We just fit everybody’s narrative about what was going on.”

Voice was an early champion of the idea that local accountability reporting might be best achieved with a nonprofit model. It has been a close partner with foundations like Knight as they seek to build replicable models for nonprofit local journalism, receiving numerous grants over the years with the hope that what works to sustain their reporting in San Diego might work elsewhere.

More than five years after it first entered the national spotlight, a stretch that’s included both triumphs and struggles, Voice is in the news once again, this time for championing the membership model as the best way forward for nonprofit local journalism. Memberships are the latest buzz across many swaths of online news, both national and local, for-profit and nonprofit. On the national level, for-profit operations like Slate and Talking Points Memo entice members with perks such as exclusive content and the opportunity to interact with reporters in online forums. On the local nonprofit level, memberships offer readers a chance to be part of the club sustaining a news operation for the good of the larger community, and work to cultivate a sense of intimacy through in-person interaction with reporters and member-exclusive community events.

Since 2012, Voice has billed itself as a “member-based news organization.” Once focused almost exclusively on attracting five and six-figure contributions from foundations and high-dollar donors, Voice now invests considerable effort in getting San Diegans to chip in anywhere from $20 to $1000+ annually to support its reporting. The average donation is about $100. Two years into the program, memberships account for about 15 percent of Voice’s annual revenue, earning the organization about $200,000 in 2013.

That is a meaningful amount for a small news operation, but Voice has bigger plans. Lewis and his staff say that membership isn’t just one more piece of the revenue pie for struggling nonprofits, but will be the growth engine for their finances and the key to their relationship with San Diego residents. Earlier this year, Voice and MinnPost, another leading local news nonprofit, received a $1.2 million grant from the Knight Foundation with the goal of tripling their membership rolls by the end of 2016. Knight hopes the program will prove that memberships and small donations should be an area of focus for local news nonprofits in other communities.

But the membership model faces numerous challenges, chief among them whether even an ideal marketplace like San Diego, with its large population of affluent and news literate potential donors, can fund the kind of growth that has eluded Voice since its founding. Nine years after its launch, Voice’s newsroom has yet to break double digits (and most of its reporters have yet to turn 30), and its investigative capacity is hampered by the need to produce daily content for its website. Still, Voice’s near-decade of survival is a major achievement in its own right. It’s an organization that’s become skilled at learning lessons the hard way—with its membership efforts as the latest example. That’s just the kind of underdog story a bunch of San Diegans with a hundred bucks to spare might get behind.

Faced with layoffs and sinking finances, Voice of San Diego searched for answers and then hit on an idea. Why not ask the public to pull out their checkbooks and pitch in?

Voice’s journalism validates the national attention, but the key to its newsworthiness was always its business model—even before it had one. Voice’s funding for its first year of operation in came exclusively from a $354,399 gift from a local venture capitalist named Buzz Woolley, who had been so angered by the local press’ lax oversight of city government that he decided to found an alternative news outlet. Among other omissions, the daily San Diego Union-Tribune failed to uncover a pension crisis that nearly bankrupted the city. Lewis was only 29 when he and a former colleague named Andrew Donohue, who was 27, took the helm of the nascent venture in late 2005. In that first year the organization’s ambitions were more journalistic than financial. Woolley later told the people at Knight that it would not have made sense “to go around with hat in hand to raise money for something no one had ever done before.”

“There was never really any appropriate metric to gauge success,” Donohue, who left Voice in 2012 and is now a senior editor at the Center for Investigative Reporting, told me. It wasn’t clear how many readers a niche local politics website should have in 2005. And it wasn’t even clear how many stories such a site should be producing, or when they would be published. The production schedule for the staff of four journalists resembled that of a newspaper, with a single batch of stories going live each morning. Lewis and Donohue were two twenty-somethings still a bit in disbelief that they were in charge of a nonprofit, enjoying the freedom of running a shop with a clear journalistic mission and ambitions but no heavy burden of expectation, occasionally holding push-up contests in the office. As Donohue put it, “There was no ‘let’s save journalism’ or anything like that. We were just trying to do some good stories that weren’t being done in San Diego.”

The Times story changed expectations considerably. Liam Dillon left the Naples Daily News in Florida to report on city hall for Voice that summer. When he arrived, he was surprised to see news outlets around the country writing “the exact same story, the exact same way, a year later.” For better and worse, Voice’s efforts were now scrutinized both nationally and locally as part of the broader effort to find a new model for local news. As the national attention made clear, Voice was expected to do more than supplement an underperforming news market. It had to find a way to be a pillar of that market, to engage and serve as a voice for a greater swath of the community, and to find a way to do this long-term. This was not the set of expectations that Voice had started out with. It was a set of expectations that essentially came down to money—the question of how to fund an organization of real size and longevity.

“We weren’t thoughtful about the future of long-term revenue,” Lewis told me. “We were getting grants whose life expectancy we didn’t understand.” Voice had used those grants—the most tangible upside of the national profile—to help fuel what Lewis counts as a major period of editorial success during which he and Donohue launched a series of new products that have been key to the organization’s survival, attracting loyal readers who could become potential members. A Morning Report email blast made the site’s content part of a core group of readers’ daily routine. And a partnership with the local NBC affiliate that had long served to get Voice’s reporters in front of a larger audience grew into a formal relationship that provided the NBC affiliate with frequent on-air content featuring Voice’s brand of accountability journalism, and Voice with a new revenue stream.

Those products helped increase Voice’s relevance, but revenues were heading in the opposite direction. In 2010, what was supposed to be a five-year grant from a local community foundation ended after two years. By the end of 2011, Voice still hadn’t managed to make up for the lost revenue, and Lewis and Donohue were forced to layoff two of their seven reporters, as well as the site’s only photographer. Around the same time, a local real estate developer named Doug Manchester bought the Union-Tribune. The New York Times would later accuse Manchester of using the paper as “a brochure for his various interests,” both political and financial.

It was a confluence that underscored Voice’s importance, and its fragility. Voice’s readership realized that, as Lewis put it, there wasn’t “a magic funding source” keeping the organization afloat. And the staff at Voice recognized that they hadn’t done a particularly good job of making readers aware of how they could help—and that giving readers a clear way to support the organization was key to their survival. As Dillon put it, “Any illusions about money not being something that we should all be concerned about were shattered.”

In a way, the layoffs were the birthing pains of Voice’s membership program. The idea was in the works before the layoffs, but that difficult period underscores the program’s logic: People who care about a news organization might appreciate the chance to further its efforts, and should be asked to do so long before things get desperate. As Lewis says frequently on the conference circuit, “Overwhelmingly [our donors] don’t say they give us money, they say they pay for a service they feel that they owe money for. One of the things I’m most frustrated with is newspapers that say people won’t pay for the service they provide, when in fact they’ve never asked.”

In September 2011, Lewis hired Mary Walter-Brown, a former San Diego TV news producer, as Voice’s first VP of advancement and engagement. Walter-Brown had spent nearly a decade working in marketing for nonprofits after leaving journalism, and was tasked with raising awareness of Voice’s mission in San Diego while also bringing a workable long-term strategy to its finances.

In a sense, Walter-Brown’s job was to find a way to translate Voice’s relevance to San Diegans into actual earned revenue, a job that began with educating readers about the organization’s structure and needs. A survey she conducted of the site’s readers found that even some of the site’s most frequent readers were unaware that Voice was a nonprofit accepting donations. In the past, those readers who had donated in small amounts had been labeled members, but there was no clear idea of what being a “member” of Voice of San Diego meant. In retrospect, this was a profound oversight. Why be a member of something you don’t understand?

She began to define member benefits, the most fundamental of which was simply the label “member,” a label donors now would lose if they didn’t re-up every year. Beyond that, member benefits included admission to live events, from topical discussions on San Diego’s education system or police department to more entertainment-oriented affairs like an arts and culture presentation (complete with alcohol sponsor) called Meeting of the Minds. The process of defining what the member experience should be reshaped Voice’s identity. Just as any major story produced by Voice is a part of its identity, so too were these events. At its heart, the membership program is about making a connection with readers that’s emotional as well as financial.

Seeking that more intimate connection with a core group of consumers has also shaped the site’s coverage. Making local readers feel that you’re their news organization means covering the sorts of stories they feel are most important—and the growth of the membership model depends on serving that role for as many readers as possible. This is why Voice’s expansion plans prioritize coverage of new topics and new parts of San Diego County over deepening resources and investigative capacity for city hall and other areas the site already covers. It’s notable that while membership models have made strides in funding daily accountability reporting, major philanthropy remains the most feasible funding source for deep investigative coverage. Dillon describes the effort to produce daily content and pursue long-term investigative projects with a small staff as a “constant battle,” and it’s a battle the growth of the membership program is not poised to alleviate. Lewis acknowledged to me, “to get the number of people we need into the fold, we’re going to have to cover more things. We’re going to have to reach more people, basically.”

At the start of the membership program in 2012, Voice set a goal of reaching 5,000 members by the end of the year, which would mean signing up about 4,000 San Diegans. This proved far more difficult than expected. They succeeded in increasing revenue from memberships by more than 80 percent, to a total of more than $200,000, but the pool of individual donors increased by only 300, leaving a total of 1,311 members. This speaks to a mixed blessing of Voice’s membership model: Although aimed at cultivating a broad array of small donors across San Diego, the people chipping in and gaining the “member” label are typically a wealthy niche. As Walter-Brown explains, “Somebody who comes in at $35 this year and is passionate and engaged might jump to $500 next year. One guy who gave us $500 in 2010 gave us $10,000 this year. When I talk about the importance of cultivating membership it is not just for those $35 donors, it is what they could become.” All the in-person interaction through member events is proving effective at getting current members to invest more in Voice’s efforts, both emotionally and financially.

Michael Maness, the VP of journalism and media innovation at the Knight Foundation, points out that the kind of people most inclined to become members of organizations like Voice are not necessarily the site’s core readers, but instead civic-minded types who feel that they should give to an organization that is there for the good of the greater community, the same way they might give to a museum or the opera.

Analogies to these large cultural institutions inspire Lewis, and also represent how far he has to go. “We haven’t achieved true scale,” he told me. “We could be a lot bigger than we actually are. If you think about it, we are a cultural institution. As far as interest and impact, it’s comparable in some ways to a museum or a theater or an opera as far as its value and influence in the culture.” Many of those organizations in San Diego run at the $10 million to $15 million level, a number that would vastly increase Voice’s presence and investigative capability. At the moment, though, it’s stuck below $1.5 million. Lewis is confident that, as Voice matures, it will get closer to those numbers. “Just staying at our current size would be kind of a yearly slog that I don’t know that I’m interested in,” he says.

If a nonprofit in a community like San Diego faces these challenges of scale, they will likely be even more severe nationally. Paul Bass, who runs the nonprofit New Haven Independent, told me that it wouldn’t make sense for him to focus heavily on a membership program in his market, which is relatively small and poor. The Texas Tribune doesn’t focus heavily on membership for the opposite reason: It has the benefit of serving the state with the most millionaires in the country, and also resides in Austin, where plenty of money is sloshing around trying to be a part of the state’s public policy debate. As Kevin Davis, the executive director of the Investigative News Network told me: “The problem is when you are covering people or committees that simply are unable or cannot afford to support the news and information they need. So if you talk about undocumented immigrants, you’re talking about people of color, membership becomes much harder because, again, not everybody you’re trying to inform can give you the money to help sustain you. And to me, that’s where philanthropy will be needed on an ongoing basis.”

Steven Waldman, who wrote the Information Needs of Communities report for the FCC, points out another limitation of memberships. “If you look at public radio, the biggest, most successful ones are in New York, Boston, Chicago. The cities that are able to sustain a mix of affluent individual donors, smaller donors, and foundations. And I don’t think it’s worked as well in poorer communities. Also, if you’re in a poor community, the scarce philanthropic resources have a lot of needs they’re trying to cover. They’re trying to do basic human services, and hunger, and healthcare. So in some of those cities it may be a tougher sell to say, ‘you should put some of your precious philanthropic resources into journalism.’ “

Just as there were no clear benchmarks for Voice’s success when it launched nearly a decade ago, there are no clear milestones for when it will have achieved financial sustainability. The organization is currently at 28 percent foundation support, 45 percent major donors, 15 percent individual donors, and 12 percent community and corporate sponsors. It would like to get to a point where each pillar represents 25 percent of the budget, and any one could fall off without creating the upheaval that occurred in 2011, when the organization lost its innocence, but gained a clear path forward. Regardless of whether it will succeed, that in itself is an achievement.

“Our business model is about engagement,” Lewis told me. “At the very end of the day, our business model and our mission are exactly the same. We have to do it so well that people love us and want to pay us, right? The problem is, that love and that connection is tough to maintain. We can’t try to please everyone, but we’ve got to do something that a lot of people respect and like and want to preserve. That’s going to be interesting.” 

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Michael Meyer is a CJR staff writer. Follow him on Twitter at @mcm_nm.