Can Crowdfunding Help Save the Journalism Business?

    by Mark Glaser
    November 13, 2008

    Bands do it. Filmmakers do it. President-elect Barack Obama made an artform out of it. “It” is crowdfunding, getting micro-donations through the Internet to help fund a venture. The question is whether crowdfunding can work on a larger scale to help fund traditional journalism, which is being hit by the twin storms of readership and ad declines at newspapers and the economic recession.

    Two experiments in crowdfunding, Spot.us and Representative Journalism, are testing the concept at the local level. Spot.us allows freelance journalists to pitch story ideas and get funding from the public in the San Franciso Bay Area, while Representative Journalism (or RepJ) is running a test in Northfield, Minn., funding one full-time journalist to cover that community.

    I never try to sell Spot.us as a silver bullet that will support a whole news organization. But I do see it helping a news organization so they can do something beyond their regular means." -- David Cohn, Spot.us

    [Full Disclosure: I am on the advisory board to RepJ and, like Spot.us, have also received a grant from the Knight Foundation.]


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    David Cohn

    Spot.us is the brainchild of journalist David Cohn (a.k.a. Digidave), who worked on NYU professor Jay Rosen’s groundbreaking NewAssignment.net citizen journalism project and helped research the chapter on crowdfunding in Jeff Howe’s Crowdsourcing book. Cohn won a $340,000 grant from the Knight Foundation for Spot.us, and writes about the project on MediaShift Idea Lab, the sister blog to MediaShift where Knight grantees write about their projects. Here’s how Spot.us works:

    1. Anyone can come up with a “Tip” or story idea they’d like to see covered. People can “pledge” money toward that story.

    2. Freelance journalists can sign up to cover those story ideas or pitch their own stories, attaching a cost to writing the story.

    3. Once a story has a journalist attached to it, people can donate money to help fund it (but no one can give more than 20% of the total cost of the story).


    4. When the story has full funding, the journalist writes the story, and a fact-checker is paid 10% of the funding to edit and check it.

    5. Before the story is posted, news organizations have a chance to get exclusive rights to the story by paying the full cost, which is given back to the donors. Otherwise, the story is posted online and any news organization can run the story for free.

    The site officially launched last Monday, but had already funded three stories through a simple wiki set up beforehand. Cohn told me that the challenge for Spot.us isn’t so much the technology as it is the fundraising, something that is new to him as a journalist. He said that Spot.us is just one possible alternative business model for journalism.

    “I never try to sell Spot.us as a silver bullet that will support a whole news organization,” Cohn said. “But I do see it helping a news organization so they can do something beyond their regular means. They can strive for excellence, but it won’t support day-to-day reporting. It has its limitations…Community-funded journalism relies on two basic shifts. First, the audience has to think of journalism as a public good like art that’s worth sustaining with their own money. The second shift is with reporters who have to realize they are a personal brand and they can pitch the public.”

    Leonard Witt

    Unlike Spot.us and its piecemeal approach to crowdfunding per story, RepJ takes a longer term outlook by hiring a full-time journalist to work for a local community or cover a specific issue. Leonard Witt, communication chair at Kennesaw State University in Georgia, came up with the idea for representative journalism and got a $51,000 grant from the Harnisch Family Foundation for the trial project in Minnesota. Witt believes that a community or interest group could raise $100 donations (or $2 per week) from 1,000 people to support a journalist who covers their locale or issue for a year.

    Witt has yet to test this donation model; he’s first trying to get his initial representative journalist, Bonnie Obremski, more ingrained in the community in Northfield, Minn.

    “We are dealing with a total Northfield population of just 17,000,” Witt told me via email. “We have to literally weave together an information community of members willing to pay for high quality journalism. So we have to work on three fronts: 1) we have to provide high quality journalism; 2) we have to get the community to know our journalist; and 3) the community has to feel that their membership in the community and the news and information it produces has value worthy of their financial support.”

    Crowdfunding Bloggers

    MoveOn.org pioneered getting small donations to pay for political advocacy campaigns, and Barack Obama raised small donations from millions of people in the ’08 campaign. And independent bloggers and online journalists have for years been asking their audience to help support their work through small donations. Political bloggers such as Josh Marshall and Andrew Sullivan, and tech blogger Jason Kottke have raised thousands of dollars from online fundraisers in the past. And freelance reporter/blogger Chris Allbritton financed a trip to cover the Iraq War in 2003 by raising nearly $15,000 from his readers, and wrote dispatches on his Back to Iraq blog.

    Allbritton was able to finance a drastic change of beats, going from being a media and technology reporter to becoming a foreign correspondent covering war zones in the Middle East. By supporting his trip to Iraq, Allbritton’s readers helped him gain steady work as a freelance correspondent to Time magazine, the San Francisco Chronicle and New York Daily News. Now, he is a Knight fellow at Stanford University on a year-long quest to see if the reader-supported model can work at an institutional level.

    When I contacted Allbritton for this story, he was amused at the term “crowdfunding” and noted that its advocates might not realize how expensive foreign reporting really is — especially in a war zone. Even with nearly $15,000 for his Iraq stint, Allbritton quickly went through the funds in just one month because of the high cost of being a foreign correspondent in Iraq. “There was no guarantee that more moneys would be forthcoming from an already tapped audience,” he said. “Trust me: You don’t want to suddenly find yourself broke in Iraq.”

    Even so, Allbritton was amazed that he could go cover a war at the behest of his audience, without approval from any editor or news organization.

    “I didn’t have to ask anyone’s permission or check with anyone,” he said. “I was relying on my own judgment. It was an amazing sense of freedom to do stories and explore things that I thought were really interesting. That said, it also carried a great sense of responsibility. I mean, when you’re at a newspaper or magazine, you have an editor or two to answer to. Now, I had thousands of people watching me and I didn’t want to let the donors down. I took that very seriously.”

    On a less serious subject — satirical political blogging — Ana Marie Cox was on the campaign trail covering John McCain for Radar Online when the magazine went belly up. She posted a Rate Card on her personal blog, asking her readers to support her coverage for the last week and a half of the campaign. For $10, you would get a personal thank-you email, and for $250, Cox would pose your question to a McCain advisor.

    Cox was surprised that she raised more than $7,000 from her fans in just a few days.

    “Words cannot properly convey my gratitude and amazement in the faith you people seem to have in a little Midwestern girl and her fondness for foul language, politics, and hard-luck stories — not in that order,” she wrote on her personal blog.

    Still, Cox was quick to note that “due to the astronomical costs of traveling with a campaign, I am pretty sure that amount will run short of covering the trail through election day.”

    Not long after the pledge drive happened, Cox was picked up by the Washington Independent to continue providing reports from the McCain campaign.

    Another blogger that recently started a crowdfunding drive is Jim Hopkins, a former USA Today reporter who writes the Gannett Blog as a watchdog to the newspaper chain and media conglomerate. For the past month Hopkins has been asking for $5 subscriptions from readers via PayPal, and raised nearly $1,500. But he had one particularly vexing problem: Most of his readers want to remain anonymous because they work for Gannett, so using PayPal would reveal who they are to him. To get around that problem, Hopkins set up a post office box to accept cash from them in the mail.

    Hopkins told me he is trying to make money from Google AdSense ads, and is using online video to strengthen his appeal for funds.

    “I had read that video is a good way to make an appeal because it’s more emotional,” he told me. “Until recently, my readers had not heard my voice or had a sense of who I was as a person. Just last week I figured out a cheap way to produce video, and people’s reactions have been interesting. They said I might have come across as a mean, anti-management person, but the video made me seem more like a real human being. So if I used it as a fundraising tool it could result in more money coming in.”

    Hopkins is interested in using Spot.us to fund other story ideas, but he is worried that if he puts his pitches online, they could be scooped up by competitors.

    “I have to think about ways to present my ideas without having them taken by someone else,” he said. “That’s an issue that Profnet has wrestled with for years; [it’s a site] where a journalist presents a story to [potential] sources, but they have figured out a way around it.”

    Supporting Crowdfunding Operations

    While an independent blogger or journalist might raise funds from readers directly, it’s not something that comes naturally to most writers, who might have a gift for words but not business. That’s where the “hub” idea makes more sense, and a platform such as Spot.us — properly marketed — could help connect writers with potential funders, and handle financial transactions. That hub model has worked at Kiva.org for funding entrepreneurs in the developing world; at DonorsChoose.org for matching charities to donors; as well as entertainment sites such as Sellaband for funding bands directly and IndieGoGo for funding films.

    i-1ccf2f0c44601bac841ef5fb52222f25-slava rubin.jpg
    Slava Rubin

    IndieGoGo launched at Sundance last January, and has raised more than $70,000, with more than 800 film projects posted on the site. Filmmakers pitch the public, and they can then micro-finance projects. IndieGoGo takes a 9% cut of all donations, and donors do not share in the proceeds from the film, instead getting quirky “VIP perks” such as film credits or trips to the set. IndieGoGo co-founder and head of marketing and strategy Slava Rubin told me one filmmaker who made a documentary about Iraq gave donors strips of a Persian rug that came from one of Saddam Hussein’s palaces.

    Rubin thinks the crowdfunding model could work in journalism as long as the journalists can engage the right audience.

    “If someone writes [a story about] corn in our energy supply, and they try to get money from people in Iowa, that could work,” he said. “You need to be able to engage your audience. You have to be closely connected to your niche, and take advantage of the tools out there to engage that audience. There’s Sellaband for music, and there are others, but you have to make a connection with the audience.”

    Cohn told me Spot.us would try to become sustainable by asking for donations to support the overall operation at the point of sale for story donations. He said that’s been a successful strategy for Kiva.org, whose president told him that 79% of people giving money to entrepreneurs will give an extra 10% to cover the costs of Kiva.org’s operation. Cohn also would like to get money from advertisers in new ways.

    “[Someone like] Macy’s could have a survey on our site, and Spot.us users can fill out a survey for them, and in return, they would get credit,” he said. “So instead of Macy’s giving money to a pitch, they would give it to users, and the users would decide where the money would go. I don’t know if it’s advertising, but it’s a win-win — the user gets real money to donate, the company gets a survey filled out. But that’s in the future.”

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    Jeff Howe

    Wired contributing editor and “Crowdsourcing” author Jeff Howe told me that he was bullish on the crowdfunding model, because it takes much less effort to get someone to throw in a few bucks online than to do the free work of crowdsourcing. Howe thinks Spot.us has promise because of the low cost involved for freelance journalists.

    “You just have to pay someone to write the piece, and as you and I know, a couple grand in our pocket will fund a week or more of reporting for us, and that’s what the Spot.us model is,” Howe said. “I’m really optimistic and hopeful for this as a model for journalism. We’re in such disarray right now, where the music industry was in ’02 or ’03, because of changing mediums and a fickle audience.”

    One worry he did have was that journalism funders would expect a particular outcome from the story pitch — and would get upset if the result didn’t fit in their assumed world view.

    “What you get with a newspaper is a convention to find the facts and write the story,” Howe said. “I’m not sure how that convention changes with crowdfunding. I expect that the writers will come back with stories that the funders wanted to see. There’s going to be an imperative — unconciously or not — to please the funders. And what we know of online communities is that they tend to gather around shared viewpoints and interests. Crowdfunding will work by tapping those communities and they are not disinterested, they will have an axe to grind. People who want you to investigate the local utility will already believe that the local utility is guilty of malfeasance.”

    What do you think about crowdfunding efforts by Spot.us and RepJ? Do you think micro-donations can support local freelance stories or a long-term journalist covering a particular community or issue? What potential conflicts do you see with these operations and how much could they help bridge the gap in the changing business model for traditional journalism? Share your thoughts in the comments below.

    Tagged: back to iraq crowdfunding representative journalism spot.us
    • I think this is a great idea, it gets at the heart of the democratic function of journalism. That being said, it leaves room for abuse. As the article points out there will be an imperative to please the people who fund the story, but on some level the same is true of traditional forms of journalism. Ultimately, I think it will lend a voice to issues that wouldn’t otherwise be covered. It will be a good tool for traditional journalistic outlets.

    • Hi Mark:

      Thanks for the thorough story. I agree with Rosa. My philosophy is that news has value. So if it has value it should be paid for by the people who use it and value it. Why does everyone seem to have so much trouble with that concept?

    • Mark — this is both interesting and depressing.

      Depressing because we’re essentially reinventing the wheel here. What is paying a subscription for the NY Times but crowdsourcing (with extra ad revenue thrown in just like Jim Hopkins has on his blog) at a large enough scale to pay for really good reporting at the local and national scale?

      Are we going to have to destroy what we had (by demanding that all news be free) before we realize that, as your other commentators point out, news has a value and that it’s worth paying for?

    • Mark — this is both interesting and depressing. Depressing because we’re essentially reinventing the wheel here. What is paying a subscription for the NY Times but crowdsourcing (with extra ad revenue thrown in just like Jim Hopkins has on his blog) at a large enough scale to pay for really good reporting at the local and national scale?

      Are we going to have to destroy what we had (by demanding that all news be free) before we realize that, as your other commentators point out, news has a value and that it’s worth paying for?

    • Intuitively, crowdfunding is brilliant. It gives power and voice to the funders – the people – and also provides fuel and freedom for the journalists. Is it, however, a sustainable model? A moral model? Are the journalists to live and die by the ebb and flow of an interested citizenry? And what stories will be left unfunded, untold?

    • good post, I knew about spot.us but not some of the other sites you mentioned.
      p.s. I’m “crowdfunded”, reporting from post-Ike Galveston

    • Marj Kleinman

      Great article, democracy is growing and growing…I definitely don’t agree that crowdsourcing can be compared to the subscription model, because users get to vote on stories with dollars–and thus control individual content. It’s more like VOD (Video on Demand) for news.

    • I´m trying to give hope to journalists here in Latin America that there is life beyond mainstream news outlets. This is an idea that might work in some communities in some countries, precisely because of a lack of trust in institutions, existing media. Thanks for the detail.
      — Director, Digital Journalism Center, University of Guadalajara

    • Over at the blog for readers of the International Herald Tribune, Think! (www.ihtreaders.blogspot.com) I’ve been blogging a lot about how the NYT Company might have to go public-to-private to save itself (and my daily, the IHT) and with shares hitting as low as $7, never a better time to do it.

      More to the point, my private isn’t just private, it’s philanthropic/charitable and my crowd isn’t thousands, it’s maybe 100 socially minded Americans of the wealthy great and the good (including perhaps some other foundations like Rockerfeller etc) stumping up $10 million each to achieve this, and critically, get rid of their $1.2 billion debt which is what is going to GM them if they don’t act snappy. For more on this check out http://ihtreaders.blogspot.com/2008/11/public-to-private-socially-minded-rich.html

    • As a journalism student entering the field in just under a year now, innovative sources of funding give me hope that my passion will still be financially feasible to pursue. I am surprised when many of my classmates balk at blogging and believe that paper news is here to stay. I certainly don’t think newspapers are going to disappear completely (not for a while, anyway,) but I wish more people were thinking up great ideas that will help all of us in the future. Hopefully, articles like this will continue to inspire more innovation!

    • Isn’t the key here not so much the revenue side – after all, how different is this, biz-wise, from NPR soliciting donations online, or where I work at Mother Jones (with a long history of small donations keeping the doors open)? Nope, I think the key is on the expense side, i.e., seriously lowered operating costs – as in: freelancers who carry all the risk and responsibility; no real staff to speak of (how long until these shops realize they’ve got to get some add’l admin and fundraising staff on board to keep the thing alive)?

      I think David Cohn’s realism about what spot.us can and can’t do is warranted. I’ve supported it, I want it to succeed, but as Dave notes, it’s a long way from being the viable alternative.

    • Anne Terhune

      I have misgivings about the focus of a story assigned by committee. The reporter and editor traditionally work together, with the editor refining and clarifying the story’s purpose or main thrust. A writer with no editor — or a committee of editors — may need some help but either has no one to turn to or everyone to turn to, with 100 viewpoints and opinions about what is important.

    • Nicole
    • I agree strongly with Steve Katz – It seems like most of the cutting edge projects aimed at revamping the way journalism is financed really sell the journalists themselves short. This is a job that plays a crucial role in the function of our democracy and society – it shouldn’t be turned into a hobby that people dabble in in their free time but that doesn’t pay enough or provide job security or benefits, so no one is able to make an actual career out of it. I’m fine with citizen journalism or freelancing using new tech tools to supplement public information, but if we rely on that exclusively, the quality and reliability of coverage are going to keep going down the tubes.

    • While desperate times call for desperate measures, I’m concerned about moving too aggressively without considering the impact on stewardship.

      Ironic that we are considering this even as a different kind of pay-for-play comes to light in the Illinois Gov Blagojevich case – how much does it cost to take over Obama’s vacated Senate seat?

      Whether you call it an editor or curator — somewhere there has to be a voice of reason or we are heading into a world where newsrooms will perceive the slightest Twitter to have the same authority as the most reputable source.

    • Christy

      A far better model, it seems to me, would be the NPR model. You don’t pay for a story; you pay because you value what NPR does overall and trust the organization to do good, valuable work. I think the pay-by-story model is almost guaranteed to result in biased or just stupid “journalism.” But that is never how journalism has worked. It works when subscribers feel, based on the expertise/knowledge/capabilities of the reporters and their work, that they’re worth supporting in general.

      The single thing making this possible where it never was before: the internet. It takes away a huge part of the traditional expense of print journalism – the printing. The internet is also an invaluable research tool that makes it easier than ever to report a story if you know what you’re doing.

      I hope good writing and reporting will always be supported in general, and not just on a story-by-story basis. And what I’d really like to see is nonprofit print journalism by trustworthy organizations supported by individual contributions/subscribers, corporate underwriters, and private foundations. Take the profit motive out of print reporting, because having to answer to shareholders in the short term is a huge part of the problem with print journalism these days.

    • I want to read this article a couple more times to make sure I understand all the possibilities proposed and their implications, but a couple of thoughts after a quick first (online) reading:

      1. It’s hard to imagine coverage would be as timely using this model – even with the amazingly quick viral spread of information via Twitter, etc., getting the funding together would take more time than an early AM regular editorial meeting (I think, anyway, I could be wrong). So while I think this would work beautifully for weeklies or monthlies, I don’t see it working for dailies at all. And that may not be a bad thing; recently I’ve been thinking it might make sense for newspapers to publish online M-F and print only on either Saturday or Sunday – weekend papers have always had significantly higher readership (and significantly higher readership per copy, 1.7 Sat/Sun vs 1.2 or 1.3 M-F)

      2. Perhaps if newspapers gave their readers a breakdown of what an ad-free version of their publications would actually cost (taking into account number of subscribers affecting printing prices up to the point where you’re paying only for newsprint and FOB delivery), they’d be pleasantly surprised. I would truly hate to see newspapers disappear entirely. But dailies are caught in a vicious cycle at the moment: quality rapidly declining due to concentration of media ownership and costs; readers therefore being lost; revenue base continuing to shrink; quality declining further….

    • fred

      I read a lot of authors from the 18th century. They were writers, but first of all they where journalists. Journalists in the sense of reporting the truth, sharing ideas, opinions. Now I don’t trust anything written in new papers. They either recopy PR sent by the politic parties or have an editorial line fixed by economic forces. Basically new are not attracting readers anymore because they are a medium of propaganda and not real journalism. Why would I pay for such a service. I don’t pay to watch advertisement…

    • I think this idea is excellent – as the founder and editor of a small, independent newspaper in Argentina I know how hard it is to balance editorial with advertising – the age-old battle of content verses money. As the paper is small I am often forced to choose the business side rather than the socially-aware piece that could upset an advertiser, and I am convinced readers lose out time and again. This could be a way for me as a freelancer to still cover the stories I am unable to print. Thanks for the tip!

    • Yeah, like Leonard said: it should be paid and valued by the people that use it

    • Well, question might be what happens when journalists are not well paid for good work they do? People will remain with crappy news and all over education will go down.

    • I think the hub idea is a good one. I can’t see good writers suddenly having to adapt to begging for money or have a business mind…but a hub with a great reputation and authority can do the work for them!

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