No matter how you frame it, somebody’s gotta pay for the news
In the toxic atmosphere left by the unfortunate closure of an online media New frame we in the news media run the risk of not learning valuable lessons.
An obvious lesson from New frame the failure lies in not relying too heavily on a single funder, regardless of their commitment to your information enterprise. New frame closed when the sole source of philanthropic funds declined to continue funding. However, we should not minimize the difficulty of finding philanthropists willing to fund critical and independent news media.
Another less obvious lesson is that all news outlets should be completely transparent about their funding.
It is ironic that funding transparency has been used to attack independent media that have written about the New frame closure, while New frame itself did not disclose its funding. It would be tempting to mistakenly think that disclosure simply makes organizations vulnerable to attack. Non-disclosure of funding or ownership by a news organization creates even higher risks. Secrets make stories. What is perfectly innocent can pass for perfectly treacherous.
Why does the media even need donor money? The reason is the breakdown of an old business model. For example, when most print media in South Africa relied on advertising revenue, having many different advertisers meant independence from commercial interests and little reliance on government – although the government may use advertising to try to bring some news agencies into line.
The shift from print to the online environment has reduced revenue from commercial news outlets, which we relied on to produce a lot of news, and competition for the remaining advertising revenue has intensified. . A look at the newspapers in the local store, if you can find the newspaper you’re looking for, shows how hungry they are for publicity. As anyone who has been poor knows, having little money makes you vulnerable.
Falling revenue from commercial print organizations means that donor money can seem like a boon to independent media that want to continue doing public interest journalism, essential to our society and defined in my recent report on the State of the Media for the South. African National Editors Forum.
The growth of nonprofit news media has enriched the media ecosystem, enabling hard-hitting investigative journalism and increasing media plurality and diversity. But donor funding comes with its own set of problems.
Donors, like New frame discovered by journalists, can be inconsistent.
Equally important is how donor money shapes editorial decisions. Even when the people providing the money have a stated commitment to editorial independence, the effect can be subtle – influence rather than direct instruction. However, someone always pays for journalism. For example, taking money from advertisers entangles your publication in the capitalist system. Direct government funding, on the other hand, can produce bland news that fits the official line. We do not expect a state-owned newspaper Vuk’uzenzale doing investigative journalism.
Commercial online news outlets mainly pin their hopes on the public paying for news through subscriptions. At first glance, this might be ideal, but even here the idea of “audience capture” catches on. Your paying audience might resist major news that makes them uncomfortable by presenting facts that challenge their worldview.
The answer, as New frame discovered too late, has a multiplicity of sources of income. For donor-funded outlets, no one donor should dominate. In general, the ideological position of the publisher or distributor and that of the donors must align. But if any of them decide to interfere in editorial politics by suggesting you run anything composed by the CIA or the Chinese Communist Party, you can stop taking their money.
Mia Malan, founder of a donor-funded health journal Bhekisisapoints out that small, specialized news outlets may have no choice but to rely on a single big donor. Bhekisisa does not hide that it is funded by the Bill & Melinda Gates Foundation, although it also receives money from a series of small donors. Bhekisisa lays out on its website its policy of protecting its independence, only taking “funding from donors who assure us that they will not attempt to influence our reporting, our choice of subjects or our editorial decisions. Our contracts with donors therefore include clauses, signed by the donors, that they have no right to interfere with our editorial decisions.
Non-profit investigative organization amaBhungane and online information site GroundUp are examples of funding transparency.
amaBhungane has a detailed and ambitious funding policy that aims to “limit our exposure to any particular funder to 20% of our budget”. It does not accept government or corporate funding, limiting itself to “reputable granting organizations with a credible track record of funding media or social justice causes.” The Investigative Newsroom, as it is called, produces comprehensive annual financial statements detailing income and expenses. Notably, relatively small individual donations from supporters contributed about 24% of operating expenses in the 2020-21 financial year.
GroundUp publishes a list of donors and specific amounts given by institutional investors, including the EU, on its website. Its biggest funder in 2020-21 was Britain’s The Sigrid Rausing Trust, which contributed around 21% of the total of around R8.7 million. GroundUp founder Nathan Geffen thinks the organization can’t afford to be as “pure” as amaBhungane, although he is cautious about funding and has rejected money from what he calls “dodgy” backers. Exceptionally, the NPO publishes the salary brackets of its staff, showing that the editor earns around 4.5 times the salary of the lowest paid journalist.
Multiple sources of income are as important as diversification of funding. Faced with a failing business model of relying solely on online advertising, some media, including the Daily Maverick and The Guardian newspaper in the UK have chosen a membership model. This means using a close relationship with the public to solicit cash contributions, from small amounts to substantial amounts.
The Daily Maverick is a private company owned over 25% by the not-for-profit company Inkululeko South Africa Media. DM publishes funding information in the “About Us” section of its website, contrary to claims that it hides its funding, including the identities of its major donors. The DM States: “Daily Maverick Journalism is funded, primarily, by three sources: philanthropy, commercial activities and the support of our readers. By design, we are not overly dependent on a single source of income to reduce the impact of market shocks. It is important to note that “no individual donor contributes more than 5% of our total income”.
In South Africa, the country’s oldest news organization independent of major publishers is the Courier and Custodian, which is also privately held, but majority-owned by the non-profit Media Development Investment Fund. He receives funding for projects like The continent, his pan-African WhatsApp publication. The Courier and Custodian discloses its funding on the About Us page of its website.
Sustainability, ultimately, is as much about finding and keeping audiences as it is about funding. Media relies on having audiences that donors and/or advertisers want to reach. If you sacrifice the truth for sensationalized, unverifiable, unverifiable stories, your audience may sooner or later die out.
And if you want a subscription or hybrid model, with a good chunk of your money coming from members, you can’t risk alienating the public with shoddy or unethical journalism. Plus, having members or followers shows advertisers and donors that your audience sees some value in what you do.
The public is not empty vessels waiting to be poured out with ideas and opinions, the so-called “hypodermic injection” theory of the media. They are more likely to accept certain versions of the truth because they fit their worldview, for example that the hard-won democracy in South Africa must be defended against would-be dictators and their henchmen or that the infiltration of the state by organized crime should be exposed.
While news funding is important, it’s only one side of the equation. The audience cannot be ignored, and without an audience, publishers and broadcasters scream into the void. Viewers cannot be taken for granted – as shown by circulation figures, which are seeing surprisingly steep declines for once-dominant publications.
Reg Rumney is a research associate in the Department of Journalism and Media Studies at Rhodes University, where he founded the South African Reserve Bank Center for Economics Journalism. He is a writer and professor of economic journalism, corporate social responsibility and media management, and former economics editor of the Courier and Custodian.