Experience over the holidays with the micro-lending site, Kiva.org, got me thinking about the journalism-donating site, Spot.Us.
There are some obvious differences between the two operations. Kiva.org, launched in 2006, has distributed more than $56 million in loans to 80,000 small entrepreneurs in developing communities around the world. Spot.Us, just a couple of months old, has collected less than $10,000 for journalism it hopes to fund in the San Francisco Bay area.
Kiva is all about loans; Spot.Us is more focused on donations.
But after chatting by phone with Kiva spokeswoman Fiona Ramsey and exchanging e-mail with Spot.Us founder David Cohn, I came away convinced the groups’ similarities are more interesting than their differences.
Both use $25 as the starting point for a loan or a gift — an amount that many people of even modest means can reasonably invest in a cause they believe in. Both organizations appear to operate with a refreshingly high level of transparency. Kiva updates stats on loans, repayment rates on its site; Cohn recently posted his year-end report to funders for all to see. Most importantly, both initiatives are deeply rooted in the personal connection between lender/giver and recipient.
Kiva displays photographs of its potential loan recipients. Cohn encourages the journalists working with Spot.Us to provide a video of themselves describing the story they’re seeking money to produce. The human beings on each end of these transactions get a glimpse of the face behind the money — and the work.
Spot.Us has a long way to go to catch up with Kiva. Although both reflect a social good, attacking the problem of under-funded news is quite different from easing global poverty. It remains to be seen whether user-funding of local news will emerge as one of the viable pieces of the news pay puzzle. In the meantime, it looks to me like Cohn is making many of the right moves.
You can read the edited transcript of my e-mail exchange with Cohn below.
Bill Mitchell: In building Spot.Us, what lessons have you drawn from such non-profit lending sites as Kiva.org or for-profit operations such as Prosper.com and lendingclub.com?
David Cohn: I’ve drawn an enormous amount of inspiration and lessons from Kiva.org, DonorsChoose, etc. Some of the basic ones which I’ve tried to mimic in Spot.Us:
1. There is a direct connection between the lender and lendee. People are giving money to individuals, not organizations — which means they need to know who that person is, what they look like, etc. That is partly why I encourage every reporter on Spot.Us to do a video.
2. Transparency of money: People donate to these sites over Red Cross because they know exactly where their money is going. That is a new and empowering aspect of these sites, and it is their strength. It shouldn’t be ignored by hiding or confusing people with how their money is spent. On Kiva (and Spot.Us), for example, all your donation goes exactly where you want it to go. You are encouraged (but not required) to donate to the organization over and above that.
3. A social good: I’ve seen micro-donation sites that don’t have a public benefit as their goal (a social charity) and they tend to do a lot worse. That on Kiva.org you are giving to somebody in a third-world country makes it easier for people to give. The real challenge for Spot.Us is to make the argument that donating to journalism is also a social good.
Have you considered enabling participants in Spot.Us to lend money as an alternative to giving it? Payment might be dependent on your ability to sell exclusive rights to the story, once completed, or to generate revenue via advertising.
Cohn: I have thought about it. Right now, in fact, any user has the opportunity to get their money back if exclusive rights are sold. So if we fund a story and then the Oakland Tribune wants to publish that story exclusively, they can, but they must refund all the original donors.
But I do not expect to have the same pay-back rate that Kiva.org does (97 percent, I believe). This is for a variety of reasons. So far I haven’t found a news organization that really sees the value in refunding original donors to get the story and the built-in audience. I hope they do soon.
Because we will have such a low pay-back rate, I don’t want to make this a separate option. On Spot.Us, it isn’t as if you can choose to only donate to a story IF the rights are sold. It is a donation made on the spot. But, if that story is sold, you’ll get a nice surprise e-mail letting you know that you just got some money back.
What are some of the factors motivating people who have donated money to Spot.Us so far? Some of the barriers to participation among potential givers? Among potential news organization partners?
Cohn: As for what motivates people: The Oakland Police department investigation is my favorite right now because the motivating factors for giving are pure and tapping into that “social good” I spoke about. Residents of Oakland got word about this pitch through various list-servs and started donating a little at a time to get this story funded. They know they have a problem with crime and this is an empowering way for them as citizens to do something about it.
Barriers: That we are only in the Bay Area is a big one right now. The site has some usability issues as well, which I hope to tackle.
Then, of course, the biggest barrier is simply that people aren’t used to the idea of donating to journalism and find the concept strange. “Isn’t journalism supposed to be free?” they often say. Well, yes, traditionally it is of little cost to the reader. But journalism is NEVER “free” of costs. That requires a level of media literacy that I hope spreads out, so people realize that if we want real civic journalism we need to find a way to pay for it.
As for news organizations: It is tough to tell. I think the only real barrier is just that they need to take a deep breath and try something new. This is surprisingly more difficult than I thought. But there are few, if any, technological barriers for news organizations to get involved. It takes roughly 15 seconds to register. Despite how many times I’ve explained that, many newspapers would rather debate the merits of registering for months on end before actually taking any kind of action. So the biggest barrier for news organizations is bureaucracy.
Disclosure: Before working on this article, I lent $25 via Kiva.org and donated $25 to Spot.Us.
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