Newspaper revenue experiment throwdown: crowdfunding vs underwriting

Crowdfunded beats might not work, but there are good reasons for newspapers to give them a try

CHARLESTON, SC — Last week, we wrote about a deal between the News & Record in Greensboro, NC, and a local arts group in which the group will give the paper $15,000 to underwrite expanded arts coverage. We raised some concerns about the arrangement—as did several other critics.

One of those critics was the News & Record’s former editor, John Robinson, and in a subsequent blog post Robinson outlined an alternative approach to paying for expanded beat coverage: community-based crowdfunding. “Rather than contracting with a specific organization or business for coverage”—like the News & Record did—“the paper would ask the community what additional coverage it wants and solicit contributions to fund that coverage,” he wrote. (Robinson was riffing off a Facebook post by the journalist and media thinker Steve Buttry, who was less critical of the N&R but said he’d be “more comfortable” with crowdfunding.)

The crowdfunding model has a couple advantages over third-party underwriters, Robinson wrote: “it permits the community of readers to weigh in on what it wants,” and “it spreads the funding responsibility among the entire community of readers,” not just one “funding overlord.”

I’d add that from both an ethical and an editorial perspective, if a news organization is going to share control over news judgment and the editorial agenda, it’s in many ways more appealing to share it with readers than with outside groups, no matter how unconflicted or well-intentioned. 

As Robinson acknowledges, it’s not clear that newspapers—which already ask readers to pay for news, and have been getting more aggressive about that lately—could make this work. But it’s an intriguing idea. It also might be, in the form Robinson proposes, unprecedented. I’ve reached out to academics and several smart people in the crowdfunding world and have yet to find an example of a traditional, for-profit American newspaper independently trying to support a beat in quite this way.

That’s sort of remarkable, because crowdfunding is more and more common across the broader journalism landscape. There’s Kickstarter, of course, and more recently the Beacon Reader, which connects funders to individual reporters, and recently started inviting readers to fund certain coverage topics like climate change. Nonprofit outlets like MinnPost have used crowdfunding for specific initiatives. In 2013, the alt-weekly Arkansas Times collaborated with the nonprofit InsideClimate News to raise more than $25,000 in a matter of weeks for one special project.

David Cohn, who founded the late community-funding organization Spot.Us. in 2008 and left in 2012 after it became part of American Public Media, told me he’d pitched crowdfunding collaborations for certain beats or coverage topics to local newspapers, but nothing ever caught on.

“Part of it may have been just the timing,” he said. “In 2008, 2009, crowdfunding was still kind of an unknown entity. Now you don’t even have to explain what crowdfunding is. So that may have been part of the reticence that I experienced.”

These days, Cohn says, it would make more sense for a newspaper interested in testing the waters to do it on its own, rather than collaborate with a third party. 

“I’m not trying to suggest that you just have to do this and all of a sudden all the woes of economics in journalism are solved,” he says. “But it is low-hanging fruit. It’s not that difficult to implement. The technology is not mind-blowing.”

MinnPost, a daily website dedicated to news in Minnesota and one of the country’s best-known local accountability-oriented startups, has experimented with at least four different crowdfunding initiatives, in addition to its regular fundraising. For its first attempt, the site launched a small-dollar campaign to pay for a media writer in which donors gave $10 or $25, and the funds were matched by a $10,000 contribution from a major donor. In another, the Post raised around $130,000 from readers to create a half-time environmental beat, with a reporter who now writes on the topic twice a week. MinnPost has also raised money for a half-time reporter to cover mental health issues, and even to expand its arts coverage from twice to four times per week. 

“Our best prospects for [raising] money are people who already read us,” MinnPost editor and CEO Joel Kramer said. “We have about a hundred thousand people who come to the site at least twice a month and so we figured that our best prospects for getting people to support this work was getting people who already read us, and therefore the best way to do it would be to campaign right on our own site.”

While the site hasn’t solicited donations from advocacy groups or institutions for its crowdfunded beats, it would accept them—as long as they were not anonymous, Kramer said. (With the exception of the first effort, MinnPost has made all crowdfunding donations public.) The crowdfunding initiatives “do work,” he said. “We’ve been able to raise money from our readers.”

When, and how often, such a model would work for traditional newspapers is an open question. And it’s one that depends on several factors, said Penny Abernathy, author of Saving Community Journalism: The Path to Prosperity, and a supporter of a wide range of revenue experiments, including third-party funding models along the lines of the one the News & Record is trying.

One obvious limitation of crowdfunding, she points out, is that it’s most likely to work in engaged communities and/or affluent areas, where you might tap into a pool of readers with disposable income and demand for a certain type of news. In North Carolina’s Research Triangle, it might be a way to for papers to support tech and science coverage. For a small paper in a poorer rural area, if a weak local economy has undercut advertising and circulation revenue, crowdfunding is not likely to support basic public-service reporting.

There are other limitations and obstacles, too. Many of the success stories are about specific projects, not ongoing beats. The fact that many of newspapers’ most dedicated readers still read in print, not online, could create logistical hurdles. You can even imagine ethical concerns cropping up again. If the “crowd” turns out be just a few people with deep pockets—in which case, they’re probably connected to prominent local institutions—are you back to the “funding overlord” situation?

Still, Robinson and Buttry are right that crowdfunding is less fraught, and more appealing, than having an outside group pay for coverage. Maybe papers won’t be able to make it work. But in a time of experimentation with revenue sources, this is one experiment that newspapers should be ready to try.

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Corey Hutchins is CJR's correspondent based in Colorado, where he is also a journalist for The Colorado Independent. A former alt-weekly reporter in South Carolina, he was twice named journalist of the year in the weekly division by the SC Press Association. Hutchins recently worked on the State Integrity Investigation at the Center for Public Integrity and he has contributed to Slate, The Nation, The Washington Post, and others. Follow him on Twitter @coreyhutchins or email him at Tags: , , , , ,