Crowdfunding the News

On June 25, 2013, Texas state Senator Wendy Davis spent nearly 11 hours on the chamber floor filibustering a bill that would have restricted access to abortion in her state. The speech drew the national eye to Austin, and many of the watchers followed the action live on a video hosted by The Texas Tribune. “We were one of the only ones carrying this early version of the livestream, which went viral,” says Tribune editor in chief Emily Ramshaw.

The Tribune’s stream drew nearly 200,000 viewers by the end of the evening. That virality was powerful: Davis quickly became the face of the pro-choice movement; the pink sneakers she wore during the filibuster became the bestselling shoe on Amazon for a time; and that fall, boosted by the attention, Davis launched a campaign for governor.

The Texas Tribune launched a campaign, too. The newsroom posted a project on the crowdfunding website Kickstarter seeking $60,000 to stream live video from the gubernatorial race and “to make unfiltered video the norm in politics.” Within 30 days, the campaign drew about 1,300 supporters and surpassed the goal. With the money, which totaled $65,310 ($35 of which came from me), the Tribune bought new equipment and was soon livestreaming debates, panel discussions, and interviews with candidates.

As a nonprofit, the Tribune was already adept at collecting reader contributions—as well as grants, philanthropic dollars, and money from events—to pay for operating costs. But crowdfunding presented a new way of soliciting and spending contributions. “From our major donors or our corporate underwriters or foundations, we're generally seeking broad operating support,” Ramshaw says of the Tribune’s typical revenue streams, while with crowdfunding, “We can really say, ‘Your dollars allow us to go above and beyond what we already do.’”

The Tribune isn’t the first newsroom to try crowdfunding, or the first to find this formula for success. In St. Louis, crowdfunding has spawned a unique partnership that’s kept a reporter covering Ferguson after most national media left the city. In the Netherlands, crowdfunding helped launch a newsroom that’s rethinking the daily news cycle. Crowdfunding has provided the seed money to launch an education magazine for young girls, to publish a book on Japanese video game developers, and to fact-check politicians in Argentina, among hundreds of other projects.

Journalism is just one of the many industries where crowdfunding presents an Internet solution to problems caused by the Internet. When downloads and streaming wrecked record sales, musicians went directly to fans to finance new albums and tours; likewise with filmmakers, inventors, and novelists. Now, with more advertising dollars going not to news sites but to Google and Facebook—websites that are just an algorithm change away from redirecting millions of potential news readers—journalists, too, are finding that crowdfunding can bring what Google and Facebook so often take away: the crowd and the funding.

“Journalism is struggling right now because of how efficiently the web commoditizes content and disseminates stuff that gets people’s attention,” says Adrian Sanders, cofounder of the journalism-only crowdfunding site Beacon. “Directly communicating with your readership and asking them if the work you do is valuable (by asking them to pay) is the only way to discover a viable funding mechanism for journalism.”

[pq]Journalism is just one of the many industries where crowdfunding presents an Internet solution to problems caused by the Internet[/pq]

Crowdfunding’s financial contribution to news—Kickstarter has raised more than $6 million for journalism projects since 2009, Beacon raised over $1.5 million in 2015 alone, and other platforms have brought in millions more—is still tiny compared to the more than $150 billion spent on digital advertising worldwide last year. And there's instability in crowdfunding platforms. In September, Beacon announced it was shutting down. It follows two other journalism crowdfunding sites—spot.us and Contributoria—that were also shuttered in the last five years. The company did not return a request for comment and didn’t give a reason for the closure, but Khari Johnson, the founder and editor of Through the Cracks, a site that covers journalism made possible by crowdfunding, says Beacon’s end is not likely an indicator of wider trends in crowdfunding. "Maybe it’s evidence that a [crowdfunding] platform that’s focused solely on journalism can’t survive, but I don’t believe this is evidence that crowdfunding in journalism is going anywhere,” he says. "The platform is not the sun; it’s a planet if it’s anything. The crowd is the sun,” he says. And despite Beacon, crowdfunding is growing while many news sites' advertising revenue shrinks. And as The Texas Tribune and other crowdfunders have found, crowdfunding has benefits that aren’t monetary.

But it’s not a matter of opening a Kickstarter account and watching readers and dollars pour in. Like most start-up businesses, most journalism crowdfunding campaigns (more than 75 percent on Kickstarter) fail to be fully funded. Those that succeed, whether they’re in Texas, St. Louis, or the Netherlands, come from journalists who want something besides a paycheck, and who are willing to use their support and supporters to produce reporting that’s innovative, engaging, and about much more than money.

The Texas Tribune Kickstarter campaign gave the site $65,000 it didn't have before, but it also showed there was an appetite for enhanced coverage, and that people were willing to pay for that coverage. Spurred by its success, before election day, the Tribune launched a second project, partnering with Beacon to create what editors promised would be a “sweeping multimedia project on life inside the Texas shale boom.” The Beacon page previewed a few stories that examined how rural and small-town Texas were changing as the shale oil industry grew.

The Tribune didn’t offer magnets, buttons, or branded notebooks like it had on Kickstarter. Stories and the option to join a Q&A session with the Tribune’s reporters were the only rewards. In one month, the outlet raised $6,030, more than enough to finance the reporting. The resulting project—“The Shale Life”—consisted of 15 pieces either slideshows or videos with little text. The project credits list more than 20 names —reporters, developers, and designers who helped tell the stories the Tribune wouldn’t have been able to tell without crowdfunding or without taking resources away from other reporting. The series won an Edward R. Murrow Award from the Radio Television Digital News Association.

And the audience appreciated it. "These are projects that may have once been covered by newspapers or magazines, but today are falling through the cracks due to lack of funding," says Brent Boyd, a geophysicist in the oil industry and a Texas Tribune member who gave to the Shale Life campaign. "I am happy to give to stories that are being overlooked and need investigating. To me, the unsexy stories—the Boring But Important Stories—are the crowdfunding stories. They may not get the clicks or sell the papers, but they may affect us all in ways we don't yet know until we start looking into them and see."

By this point, it was clear that crowdfunding wasn’t just a source of revenue or a way to gauge public interest in stories—it was drawing in new readers to the Tribune website, and some of them helped fund more projects, or they became members of the site. In all, the Tribune’s five Beacon projects have attracted hundreds of donors—more than a third of them new to the Tribune—who have given a total of over $130,000. “It kills two birds with one stone,” Ramshaw says. “We’re always in audience development mode. We want to bring in as many new readers as possible. What’s phenomenal is we end up making money for a project and also drawing in new readers at the same time.”

The Tribune’s crowdfunding success comes from a combination of story selection, targeted messaging, and audience engagement. But it's not just financial need that inspires their crowdfunding. “You pick topics that resonate with people,” Ramshaw says, noting that the audience has to be willing to not just look at a story, but to pay for it. And how they look at it matters; Beacon encourages experimentation in presentation. "When someone gives you money to find information, understand it, and then report on it, they are expecting a format that works well in their daily lives," Sanders says. In addition to the Shale Life series, the Tribune has crowdfunded multimedia stories that look at water issues on the U.S.-Mexico border, the security of that border, the reasons why police officers use their service weapons, and they've also used crowdfunding to put money toward a political podcast. And Ramshaw says without Beacon, “I can only imagine we'll try to keep innovating in that space, on our own or with future partners.”

With a topic chosen and the budget and goals set, the campaign turns into marketing. Ramshaw says the Tribune reaches out to the readers it had in mind for the project. For instance, they might ask subscribers to the site’s healthcare newsletter to support a project that relates to public health. And the Tribune makes sure the story is still the main reason for these people to give—backers are offered behind-the-scenes looks at the editorial process rather than physical prizes, reinforcing the idea that the funding only goes to make the story possible. “I get the satisfaction that my small contribution may be helping other people who need this information or can use the story to build on bigger ideas," says Boyd, who has given to other Tribune crowdfunding projects since The Shale Life.

[pq]In all, The Texas Tribune’s five Beacon projects have attracted hundreds of donors—more than a third of them new to the Tribune—who have given a total of over $130,000[/pq]

Johnson says by not offering (or not being able to offer) the kinds of physical rewards seen in other types of crowdfunding, journalists can ensure they get backers who are giving because they want a story to exist. “An editorial board is great, but if your readers decide something as a group and then pay for, that sends a message,” Johnson says. "Crowdfunding is a form of reporting that consults the reader and it gives the reader a hand in the editorial practices of newsrooms. And that’s a pretty awesome thing.”

"The audience needs to be at the center of what you're doing because you’re not pitching an idea to an editor, you're pitching a concept to an audience,” says Ethan Mollick, an assistant professor of management at the Wharton School of the University of Pennsylvania who has studied crowdfunding in all industries in an independent analysis using Kickstarter's data and network. "I don't think [crowdfunding] drowns out other forms of journalism, but hopefully it leaves an opening for public-facing new work.”

Crowdfunding may never replace advertising, but crowdfunded work has become a “segment of journalism that's driven in large part by public interest and motivation,” says Amy Mitchell, director of journalism research at the Pew Research Center. “It adds yet another way for the public to engage and potentially bring voice and visibility to certain kinds of projects and issue areas that may go unnoticed or not get produced.”

One issue that long went unnoticed in the national media was race and class inequality in cities like St. Louis, Missouri. The August 2014 shooting of the unarmed black teenager Michael Brown in the suburb of Ferguson changed that. Within days, reporters from around the country swarmed the city. And what they found—apart from protests and a militarized police response—was a long-simmering discord that few people outside of the city knew about. When the Department of Justice issued a report alleging unlawful bias against African Americans in Ferguson, the Gateway Journalism Review asked, "How did so many news organizations fail for so many years to uncover deeply unconstitutional police and court practices?"

“It was extremely beneficial that so much national media came,” says Mariah Stewart, a St. Louis-based journalist who covered the protests for The Huffington Post. “They helped expose what was going on in the region, which I guess some local outlets did cover, but not to the extent national media brought attention.” But, Stewart notes, “media parachuted in.” And once the large, daily protests faded, so did the national press. Stewart remained. She stuck around because there was more to say, and because hundreds of readers were paying her to say it.

Stewart was working at a mall near St. Louis when Michael Brown was killed. A recent graduate from nearby Lindenwood University with a degree in journalism, she felt compelled to go to Ferguson, even though she didn’t have a newsroom to write for. “I just began live-tweeting” she says. After a few days, a professor told Stewart about Beacon: The site had raised about $4,000 to keep reporters covering Ferguson, and Stewart was soon writing pieces that Beacon published on its own site, using the publishing tools it made available for anyone who posts a project there. Later that month, The Huffington Post sought to continue the coverage and launched a campaign to hire Stewart full-time as the Post’s Ferguson Fellow. Driven by readers’ concerns that Ferguson would soon be abandoned by the national press, the project drew nearly 700 supporters and raised $44,626 to pay Stewart’s salary.

As a crowdfunded reporter, Stewart has covered problems with municipal courts, she’s told the stories of protestors who were arrested, and her reporting on the effects of the Black Lives Matter movement was nominated for an award from the National Association of Black Journalists. “The way in which Mariah embedded herself and that she embedded herself in lots of different situations brought a new lens to a lot of the landscape," says Nicole Hudson, a former journalist who works with Forward Through Ferguson, a group founded to continue the work of the state-founded Ferguson Commission. Stewart's supporters, she says, motivated all of her work. “I feel extremely obligated to do my job well and thoroughly because these people who raised this money, clearly they care about the issue as much as I did,” she says.

Stewart maintains an email newsletter to let supporters know what she's up to, and she occasionally gets tips in response. This kind of back and forth with financial backers would be startling if Stewart were supported by a foundation or by advertisers. But she says the backers don't dictate what she covers. "When I know that people donated money, I do want to hear them out, but I’m not obligated to do what they want," she says. "I’m not going to step out of bounds just to please someone who donated to me." She adds that this hasn't been an issue she's needed to address, either. "No one has ever come at me like that. And if they were to say, ‘I donated X amount to your salary and you should do this story’… No, no, I’m not going to do that to fulfill them."

Crowdfunding isn't a guarantee against bad actors, but if such issues did arise, Sanders says Beacon's structure kept the journalist from feeling the financial pressure. "Backers can’t pull their funding once the project is funded, so there isn’t really a need for a safeguard. As long as you’re true to what you proposed in the project, and people supported it, it’s pretty hard to push for more influence," he says.

"I don’t think there’s any more concern in crowdfunding from influencers than traditional funded journalism setups like advertising or large donor-backed nonprofits," Sanders says. "In some ways, having people pay up front and making a clear statement about what you are going to deliver is a lot more transparent and ethical." Johnson asserts this relationship is what makes crowdfunding unique, because it “consults the reader and it gives the reader a hand in the editorial practices of newsrooms," he says. "And that’s a pretty awesome thing."

Stewart's work is vetted by an editor at The Huffington Post. And, occasionally, it gets a local review, too, since the crowdfunding has also affected a St. Louis-area newsroom. After a few months of ducking into coffee shops or libraries to work, Stewart’s editor at The Huffington Post arranged for her to work out of the offices of The St. Louis American, an African-American weekly newspaper. This gave her a desk and reliable Internet access, and also a larger audience, as her byline began appearing in the American, which is distributed free across the metro area.

American managing editor Chris King says the partnership and the crowdfunding have been “super-valuable” for the paper, both because he didn’t have the budget for another reporter and because the audience likes Stewart’s work. “Many of her stories are among the best-read on our website,” King says. “At any time, there’s at least one story that Mariah reported that’s in our top 10. She’s doing things our readers absolutely want to know about.” When we talked, King says the top story on the American site was one Stewart wrote about Philando Castile, an African-American man killed by police in Minnesota, who had ties to St. Louis.

After the first year of Stewart’s crowdfunded reporting, she and her editors “felt that there was more coverage that needed to happen,” she says. So the Post and the American sought another $40,000 on Beacon for a second year of reporting. This time, with other stories of African-Americans killed by police dominating the news, Ferguson no longer seemed so isolated, and support was slow coming in. But King, who says he dislikes asking for money, helped expand the donor base by sending a personal appeal to about 100 friends, followers, fans, and contacts, outlining why the project was valuable and why he was breaking character to ask for support. Many of those recipients made donations and pushed the project to its goal. On the project page, The Huffington Post said Stewart’s focus—not her career—was the only thing on the line, promising to pay her salary even if the crowdfunding didn’t come through, but it also celebrated the benefits of a successful campaign. “Crowdfunding also creates a community of active, engaged readers—backers of journalism crowdfunding campaigns are often the most helpful when it comes time to share important stories and communicate their impact,” the page states.

This has come true. In addition to clicks, Stewart’s reporting gets reactions. “When I’m out and about, people are like, ‘Hey, I read your work. I know you,’” she says. “It’s a service to them and the community to make sure I continue this coverage as well as possible.”

With Beacon closing and with the crowdfunding money running out later this year, the Post and the American haven't decided whether to try for a third year of the Ferguson Fellowship. King says he's certain crowdfunding would pay for another year. And Ryan Grim, the Post's Washington Bureau Chief who works with Stewart, says it's possible they may seek more reader support, perhaps even through a subscription-like service such as Patreon. "I think the way to do it today is to do it in monthly or weekly installments to get people who want to be regular donors rather than look for the one-time hit," he says. Even if it doesn't continue as a crowdfunded beat, the Ferguson Fellowship helped prove that there is a community interest in issues of inequality in the area. Hudson says she's seen coverage increase beyond Stewart's work. "There are a number of reporters who now have the support and infrastructure to dig more deeply into [these issues]," she says.

It seems clear why the Ferguson Fellowship found the backers for two successful campaigns. In addition to picking the right topic and asking the right people, the reporting came from trusted outlets. “That’s a relatively easy case where there’s two built-in audiences, there’s national interest in the story, there’s local interest, and there’s credibility,” Mollick says.

Because crowdfunding supporters are “backing the person as much as backing the project,” Mollick says, “credibility in the space is key.” People have to know who you are if you’re going to ask for their money, and they have to trust you to spend it wisely if they’re going to give it to you. The Texas Tribune may not have been able to market itself as a site for live video had it not proven itself with the stream of the Wendy Davis filibuster. And had Stewart not quickly established herself as a reporter in Ferguson, The Huffington Post wouldn’t have been able to make her the face of its reporting. And both the Tribune and the Ferguson collaborators were able to communicate with the audience that trusted them, which is another key to successful crowdfunding.

“There’s evidence to suggest that the amount of reach that you have online is going to have an impact on how much you’re going to be able to raise,” Johnson says. Mollick’s research—which surveyed thousands of Kickstarter projects—concludes that most of the support for a given project comes from the host’s community. Sanders says that’s the case on Beacon, too. This community can be people who know the work a journalist does, like the Tribune’s newsletter subscribers who are pitched on a new series idea, or it can be a personal network,like the one King reached out to for the second year of the Ferguson Fellowship.

[pq]Increasingly, more traditional newsrooms are finding that opening the editorial process to followers can help build an engaged, paying audience[/pq]

Finally, Mollick says he’s found that most successful pitches address a need the target community already has, rather than try to create a need among a broader audience. But with journalism, there’s no way to tell what the story will be until the reporting is done. So a strong pitch for journalism needs to make it clear why the project has to exist. The Texas Tribune’s pitch for livestreaming the governor’s race offered a never-before-seen view into the political process. The Huffington Post promised to stay in Ferguson while other outlets left. The pitches were specific, they put the audience’s needs ahead of the newsroom’s, and they avoided an all-too-common complaint in the news industry. “Do not focus on ‘Journalism is dying. Help us,’” Johnson says to anyone looking for advice in crafting a pitch. “People do not care enough.”

This need for specificity doesn’t mean crowdfunding can only be used for one-off projects or enhanced coverage. And it doesn’t mean it’s only open to existing newsrooms. One of the most successful crowdfunded journalism projects of all time was a start-up with no prior reporting to show its potential. But it embodied many of Johnson’s and Mollick’s principles for crowdfunding, and it put the crowd first.

From the beginning, De Correspondent was about the audience. Co-founders Ernst-Jan Pfauth and Rob Wijnberg had worked together at leading Dutch newspaper NRC Handelsblad, but they felt much of the paper’s work was done to please advertisers and investors, not readers. So they partnered with a local creative agency and decided to design and build their own news site, where they could “only think about the needs of our readers, our members,” according to Pfauth. They wanted to make a newsroom that wouldn’t rush to liveblog the aftermath of a terrorist attack, but instead look at “the bigger developments behind such an attack, such as social inequality.”

The newsroom he and his cofounders had in mind would not take money from venture capitalists or subsidize its reporting with advertising, which didn’t leave many options for paying the start-up costs. So they turned to crowdfunding.

Pfauth and his colleagues determined they needed 900,000 euro (about $1 million) to start the project. If they could get 15,000 people to pay the one-year subscription price of 60 euro (about $67), that would be enough. When they imagined who these 15,000 people might be—the community that Mollick and others say is so crucial to crowdfunding—Pfauth says they “didn’t aim for 20-year-olds with a good income who live in cities; that seems like something advertisers depend on.” Instead, they targeted a community of people linked by taste and interest, people “who have one wish—an antidote to the daily news grind.”

With a community and a need identified, the founders next had to find a few doses of the antidote. At the time of the pitch, there was no De Correspondent website, there were no employees, and even though Pfauth and Wijnberg were established journalists, they weren’t necessarily household names. So to sell their targeted community the concept, Wijnberg wrote a manifesto—10 points that would define De Correspondent’s approach to news.

“[De] Correspondent prioritizes relevance over recentness, looks for alternative ways of doing journalism, is transparent about its journalistic choices and dilemmas, values thorough fact-checking, and takes into account in its own reporting the ways in which the wider news media shape our perceptions of the world,” the manifesto reads.

And, the document promises something more than articles to subscribers. “[De] Correspondent wants to establish a lasting and meaningful relationship with its readers. Seen as members of a community rather than simply consumers of content, readers will be asked to weigh in on the investment of new funds and encouraged to contribute their expertise on specific topics.”

De Correspondent’s crowdfunding campaign went live in March 2013. It hit the goal in eight days. About 5,000 more supporters signed up in the following months before the site went live. At the time, it was the biggest journalism crowdfunding project ever launched. What came next, Pfauth says, was the most stressful part of the project—they had to deliver on the promise they’d made to 20,000 paying subscribers, and create a new, audience-focused newsroom.

One of the early stories Pfauth praises is a piece on the dangers of public WiFi networks, in which a reporter and a hacker accessed the private information of people who were using wi-fi in coffee shops. WiFi isn't a hot enough topic to warrant daily news coverage, but it is a part of people's daily lives, and Pfauth says that's the type of reporting that proves his newsroom values "relevance over recentness."

And Pfauth points to a story on bureaucracy in healthcare as an example of how the site incorporates the audience into its reporting. Before beginning the story, the reporter asked readers for their suggestions on where to start reporting. These kinds of requests are standard at De Correspondent, where subscribers who wish to comment must identify themselves as experts in a certain area. This expertise is consulted again after a story is published, when the comments section turns into a discussion between readers and the journalist. Sometimes these discussions lead to further reporting, and sometimes that reporting is done by the audience.

After getting into a discussion on the comments section of a legal story, subscriber Marlies van Eck, who has a background in law, wrote a piece for De Correspondent on how to understand the language of judicial opinions. Van Eck was an original backer of the site. She says she signed up at first because she was interested in a news site that would break away from the daily coverage she already read, as Pfauth and his colleagues promised. And once the site launched, she enjoyed being able to interact with journalists and engaged readers on the stories she was paying for. That involvement—even if she’s not writing full articles for the site—is a big reason she keeps supporting De Correspondent. “It feels like building something. All together, you build on a story, or on a story line,” she says “The stories they write, most of the time, it’s not just an isolated story, it’s part of a kind of development.”

Soon, Pfauth plans to roll out a new feature for the site in which the audience will be able to suggest stories. The site also asks readers to test out new features, and they’ve held hackathons in which the audience can help provide or build datasets that can inform reporting. Pfauth says one of these sessions led to a report about which companies own various adult websites.

After a year, De Correspondent faced a question: Would this kind of reporting and involvement be enough to get the initial backers to renew their memberships and keep the site funded? Subscriber numbers had been rising steadily all year, approaching 40,000. And when renewal time came, 60 percent of the original supporters signed up again, keeping the site alive. Mollick’s research has shown that the most successful crowdfunding projects later become successful businesses, and that projects can be repeated, as long as the hosts are able to “build a community of people who trust you and want to work with you,” he says. “They feel like they’re partners in what you’re doing. You’re not getting passive money. This is a community of supporters who feel like they’re co-creating with you.”

De Correspondent’s growth continues. The staff has expanded from 13 to 44, and there were 48,000 subscribers as of fall 2016.

Strictly speaking, this business model isn’t new. It borrows some from public radio and some from ad-free subscriber-supported publications. What sets the way De Correspondent has evolved apart from these predecessors is how the audience was turned from a test market into a part of the newsroom, and how the spirit of crowdfunding remains in daily operations.

[pq]Successful projects don’t treat crowdfunding like a revolutionary new business model that will save journalism...it’s part of a philosophy[/pq]

Increasingly, more traditional newsrooms are finding that opening the editorial process to followers can help build an engaged, paying audience. The startup Hearken gives newsrooms the tools to let readers suggest and vote on stories to cover, and has caught on with public radio stations. In her exhaustive look at the public radio membership model, “Putting the public into public media membership,” Melody Kramer, a veteran of public radio who now is in charge of audience development for Wikimedia, argues that supporting a newsroom should be thought of as much more than just a business transaction. She adds that “non-financial forms of involvement should be valued as much as financial ones, particularly if they’re viewed as opportunities that could lead to further or deeper engagement with a station.”

Kramer's report notes complaints from several people at public radio stations who say this kind of audience interaction is "time-consuming." Mollick's research concludes it takes 30 hours or so a week to manage a crowdfunding campaign, and Ramshaw and Johnson both say keeping up with crowdfunding is a full-time job. De Correspondent has addressed this by partially redefining a journalist's job to no longer be just reporting and writing a story. Instead, many stories begin with a pitch for audience input and end with either a discussion of the piece, or more reporting that follows up the discussion.

Crowdfunding strategies differ from enterprise to enterprise, but most journalists who’ve used the technique agree on the essentials: Promise to make something unique and specific, make it for an audience you know and who knows you, and never focus only on the money.

Ultimately, these successful projects don’t treat crowdfunding like a revolutionary new business model that will save journalism. For them, it’s part of a philosophy. De Correspondent, The Texas Tribune’s projects, the Ferguson Fellowship, and the hundreds of short-lived series and one-off projects funded every year don’t exist because Kickstarter, Beacon, or the other platforms tapped a new source of funding online. These projects are made possible by the spirit that lets those platforms exist in the first place—a spirit that lets people get involved and make something new.