First Look Media has decided to discontinue funding of Reported.ly, a social media reporting and verification outfit. This has led the organization to announce it will suspend operations on Aug. 31.

Besides Reported.ly's editor Andy Carvin, four more staffers are affected by this decision and will be leaving First Look Media at the end of the month.

Launched in January 2015, Reported.ly has become a must-follow account for those seeking thoughtful curation of social media content in breaking news situations. The team proved its worth early, covering the Charlie Hebdo shootings extensively a mere few days after launching.

The service puts an onus on fact-checking and accompanying reports with caveats on their veracity, creating a safe haven from wild speculation and fake news.

Carvin says Reported.ly is "never afraid to admit what we didn’t know during a breaking news story, and we were always transparent about our mistakes. I think that helped build a strong relationship with the public, many of whom came out of the woodwork to help us."

First Look Media did not question the project's editorial success. A spokesperson for the organization told Poynter that "while Reported.ly proved to be an award-winning and critically acclaimed service, we’ve refined our long-term business strategy and are focusing our journalism investments in other endeavors."

Funding woes plague all forms of journalism, yet the quest for sustainability in the realm of fact-checking and verification is particularly pressing because of the proliferation of inaccurate information on social media.

"(User-generated content) verification and fact-checking should be at the core of what any news operation does," said Alastair Reid, Managing Editor of First Draft News (Reported.ly is a member of the First Draft News coalition). "The practices involved are central to building trust that will ultimately bring readers back again and again."

When Reported.ly launched, questions about how it would fund itself in the long-term were raised, but at the time experimentation was the name of the game:

Carvin says Reported.ly's plan was to spend a year "developing our brand and experimenting with reporting techniques" before "mapping out plans for possible revenue streams" in cooperation with First Look Media's business development team.

Yet according to Carvin, "we never got the chance to implement any of these ideas because we were in limbo for a number of months as First Look management decided our fate."

Which raises the question: Is there a business model for verification of user-generated content? Storyful — like Reported.ly, a member of the First Draft News coalition — has very successfully monetized its verification skills.

"The key difference," according to Reid, is that Storyful "is a news agency, so they have a business model baked in to everything they do. They're not public-facing like Reported.ly and other news organizations."

Claire Wardle, research director at the Tow Center for Digital Journalism and also a member of the First Draft News coalition, agrees. "Storyful has worked out a business model for UGC, but it's business to business. Andy and his team were business to consumer. That's rough for everyone working in the news industry today. How do you get readers to pay?"

Just as fact-checking organizations have struggled to preserve funding, it is unclear whether outfits dedicating significant efforts to social media verification as a public service can be long-term sustainable without a committed core funder. A "philanthrocapitalist" approach does not seem to offer long-term opportunities to this type of media experiments.

Business model woes aside, Reported.ly's trajectory has nonetheless shown "the benefits of working out in the open," says Wardle. Many journalists remain "terrified about being that open about their news-gathering and doubtful about what communities can bring," she says, but "Reported.ly was able to connect with communities and to have people come to them when they could see they cared about a particular area or story."

Ironically, for an outfit born with an unconventional distribution strategy — it launched without a website and never made it the center of its activities — Reported.ly ended up fulfilling a very conventional media role, that of the gatekeeper. The chaotic din of social networks' delivery of news has led at least some users to yearn for a role that it seemed media outlets were no longer being asked to play.

"We need gatekeepers more than ever as the social platforms get more noisy," says Wardle. "The question is — who is going to do that until there are ways that gatekeepers can find a way for their services to be supported financially."

One possibility, raised both by BuzzFeed hoaxbuster Craig Silverman in a tweet and Wardle herself is for Twitter to step in to the fray more decisively. "I'd love to see Twitter Moments play a bigger role in terms of live debunking," says Wardle.

If Reported.ly doesn't find a new home by the end of the month, where does this leave users hoping to separate the signal from the noise on social media?

Wardle thinks "mainstream newsrooms have gotten better at verification," yet "around big events we still see ridiculously bad practices." Ultimately it doesn't seem like there is an obvious replacement at the moment.

Reid recommends following the team's members (@acarvin, @kimbui, @asteris, @alaskaHQ and @wendycarillo): "They will still be excellent, diligent journalists with a passion for breaking news and won't stop working if Reported.ly disappears."