March 20, 2019

No pushing in line, please. Having raised $42 million in just six months, the American Journalism Project, an ambitious effort to rebuild local news, is on a fast track to begin handing out some of that money to deserving non-profit digital sites.

More than 25 organizations will be picked for a share of that action beginning this summer. What will it take to get in the door?

Co-founder John Thornton, also the venture capitalist who launched the Texas Tribune, was ready with plenty of detail when I asked him this week how the first round of recipients will be selected.

The “civic news organizations,” as Thornton and co-founder Elizabeth Green call them, will include a few start-ups (as the project itself is). More of the recipients will have launched and started publishing but remain nascent as sustainable ventures.

Wrinkle No. 1: though the objective is to create much more high-impact “mission-driven” reporting on state and local governance, the grants will be for “revenue raising and tech capacity,” Thornton said.

That is because he and Green (co-founder and CEO of education site Chalkbeat) are looking at some tough math. Clearly, $42 million sounds like a ton of money — more than the combined annual budgets of Texas Tribune (about $10 million), Chalkbeat (more than $6 million) and the Poynter Institute ($9 million and growing).

However, used directly to pay for reporters and editors (assuming average salary and benefits of $60,000), the $42 million would support just 700 journalists for a single year.

So Thornton and Green are focused instead on the project serving as a “catalyst” to help organizations develop diverse and repeatable sources of revenue — second-wave philanthropic grants, memberships, events, perhaps premium paid information services.

Lots remains to be worked out before the grant process begins this summer.

“Right now, it’s all a spreadsheet,” Thornton said, “the video game version” of the real thing. “Or to mix clichés, battle plans don’t survive the first shot.”

The project will probably have a two- to three-year horizon for this round of catalyzing investments. Thornton, after a 20-year career in private venture capital, also brings some specific expectations for growth at the sites chosen for funding.

“For $1 in the first year, (we expect) a return of 50 cents; for year two you expect to get $1 back; somewhere between two and five years, each dollar should get double that rate of return.”

That has been roughly the growth trajectory of Texas Tribune and Chalkbeat, as well as smaller sites like MinnPost and VT Digger. Philanthropy remains part of the funding mix, but to varying degrees, other sources begin paying for much of the journalism.

As for what it will take to earn support, Thornton and Green have specific criteria for that in mind too.

“First, they need to be entirely driven by public purpose,” he said. In other words, a serious reporting agenda without the just-for-fun content for-profit sites typically use to build audience.

“Second, we need to believe in the people, in their journalistic credibility,” Thornton continued.

“And ideally we would be looking for (sites that have done) some quality work already and that have at least one business-side person already onboard.”

Another sensitive point will be which communities are picked to get a boost to their news ecosystem. I suggested that local newspapers may be in quite different financial and journalistic health city to city. And public media, radio especially, may be moving strongly to plug the gaps — or not.

Thornton said he agreed. “There is lots of variation in both.”

Public radio may be key in some places already and even more likely to be the future, he said. The project will be looking for “healthy, vibrant and independent” sites and there may only be “a relatively small number” of those starting out.

“I expect that we will receive some criticism,” Thornton said, “but we are not going to be making judgments about the neediest places.”

Thornton and I were mainly talking about what’s coming the next few months, but the project is designed to have a long lifespan rather than to deliver its impact in one quick jolt. The Knight Foundation’s $20 million seed grant, for instance, is being paid over five years. The same is true many of the other $22 million in pledges secured to date.

When Thornton and Green announced what they had in mind last fall, they set an audacious ultimate goal of raising $1 billion. Now is a good time to strike: Philanthropic concern about news deserts and hollowed-out ghost newspapers appears to be surging in 2019.

In the first of two pieces explaining the rationale for the project, Green wrote in September, “venture philanthropy funds, by their very existence, play an important evangelizing function for their specialty cause.” So a heavy foot on the accelerator at the beginning makes sense, even if it will take a decade or more for the project to reach full bloom.

A month ago the project announced a half dozen more major funders (Thornton among them), the appointment of a five-person board and the beginning of building a staff.

One might wonder whether the project will compete with similar, recently launched organizations for a scarce pool of philanthropic dollars. I have written about Report for America, which places young reporters directly in newsrooms ripe for expansion, and Civil, a community-governed group of member sites here and abroad that have incorporated donations via blockchain token purchases into their business plan.

Thornton doesn’t see alternate approaches as a problem — there’s room for all.

“The hope would be that in combination, hitting from different angles … we would be aligned (with other similar efforts). If we can’t jointly move the agenda, we ought to go home and do something else.“

Thornton and Green met each other only a little over a year ago. Each had pitched a version of the same idea to Peter Lattman, managing director of media of Laurene Powell Jobs’s Emerson Collective. Lattman suggested the two get together. They did and began run-up planning in consultation with lead funder Knight.

I have heard only a little criticism of the project. There is some doubt about how many potential Texas Tribunes or Chalkbeats can come close to their scale and journalistic success.

Texas Tribune’s CEO since its beginning has been Evan Smith, who brought 20 years editing and publishing experience and a high profile in the state as a commentator and interviewer. Green and her co-founder started a site to cover the New York City school debates a decade ago. Chalkbeat now has 50 employees and has expanded to six more cities and states.

Smith told me as I began a day’s visit at the Tribune several years ago that for all the venture’s closely studied success, Texas’s size and wealth presented an opportunity unique or close to it.

“That’s completely fair to ask,” Thornton said, “but every state house deserves quality public service journalism. Full stop.”

“There is only one Texas, only one Evan Smith and only one Elizabeth Green. But Emily Ramshaw (Texas Tribune editor) has suggested that if each of them does the job of three or four people, another site might divide the work up. … We’ll find out, but there certainly are elements (of their success) that are replicable.”

Both the Tribune and Chalkbeat offer their main news product for free. In her manifesto announcing the American Journalism Project and explaining its goals, Green argues that local news “is a public good; it should be available to everyone, not just those who can pay for it.”

With the traditional ad-and-subscription model tanking and billionaires who spring for a bailout “fickle,” her organization and others the project aims to seed offer a better “third path,” she wrote.

Such social enterprises, she adds, “happen to be the only part of the local news business that is actually growing these days.”

Which is not to deny that getting to $1 billion will be a heavy lift, Green concedes.

“There’s no guarantee we’ll succeed, crazy to think every news organization we support will meet its goals, and easy to think of reasons we might fail. But I’m much more comfortable taking the risk than not. Like so many journalists all across America have already done by starting new local news outfits, we need to set our fears to the side and take every step we can toward what we know our democracy needs.”

This article was updated to correct “community news organizations” to “civic news organizations,” Thornton and Green’s preferred nomenclature, to clarify that the Knight Foundation’s $20 million grant is being paid over five years and to clarify that Civil uses blockchain token purchases, not bitcoin. 

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Rick Edmonds is media business analyst for the Poynter Institute where he has done research and writing for the last fifteen years. His commentary on…
Rick Edmonds

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