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Apr 20, 2023·edited Apr 20, 2023Liked by Richard J. Tofel

+1 with bells on to EVERY. SINGLE. WORD. You (kindly) chose not to lay any responsibility at the feet of nonprofit journalism funders (including me) here, so please allow me to do the honors. (I come neither to praise funders nor to bury them/us, but rather to try to share what I have learned, often the hard way, since I have started doing this work.)

Funders of nonprofit journalism have a lot to answer for when it comes to the landscape you have described: a lot of newsrooms and news organizations are in very fragile shape. In my experience, funders get dazzled by -- and often only evaluate -- editorial output and editorial aspirations; too seldom do they (we) look "under the hood" at the state of the organization itself, not only before a crisis but, inexplicably, during and after it as well. (Full disclosure: I used to be one of those kinds of funders; I didn't know any better.)

Now, let's look at how funders can do better, and in doing so, better support the field by helping to strengthen it for the long haul. As aforementioned, funders should look under that organizational hood to assess both the financial strength and stability of the news organization and -- and this is key -- the strength and stability of board governance. In situations where what's under the hood is pretty strong, funders, in my opinion, should either provide more general operating support and/or, in the case of restricted grants, provide a generous amount for indirect costs (funders should insist that this be in the grant budget, sending the message that they understand that executing successful projects isn't "free"). Over the course of the grant, funders should talk to the organization not only about the editorial, but also about financial and board capacity; stay on top of it, and, if necessary, be open to shifting the use of grant funds if an organization that is generally well managed and governed hits an unexpected rough patch.

Okay, now we move on to the more common situation, where, while not yet an existential crisis, what is under that hood doesn't look so good. The reasons can be any and all of the things you have cited as flags that an organization is vulnerable. In that situation, a funder can help by providing funds not for editorial projects alone (or at all), but for what might be called capacity-building. Part of good grant-craft is working with the organization to identify, discuss and, most important, figure out ways to solve for the weaknesses under that hood. Are the financials kind of messy? Is the board unclear about its responsibilities? Is there not a finance committee (I've seen this more than once in a nonprofit news organization)? Presuming the funder has not decided to abandon ship (which might be the right decision in any given situation), that funder can be immensely helpful by funding and suggesting, for example, a short-term consultant to help right the ship. Or, by funding a non-editorial staff position such as development director, or audience manager -- roles that build strength and stability. Such a grant can and should include specific benchmarks, mutually agreed-upon, that concretize the goals of the grant. In my experience, some organizations will initially chafe at this degree of funder "direction," but ultimately, they appreciate the results and say so. The organization is stronger, thus the field is stronger. (And, by the way, I also think it is perfectly okay to discuss this with fellow funders.)

Finally, we have the worst-case scenario: the collapse. The financial statements whose ink is red, the board that is neither giving nor raising money, the spend-down of reserve funds where the emergency is self-inflicted and most likely a long time in coming... it's usually a combo platter of problems. Funders are often asked -- pleaded with -- to step in with emergency funds. And, some do; nobody likes to see their grantees fail. And so, the crisis is averted -- for about 10 minutes -- because, in too many cases, nobody -- not the organization-in-crisis, and not the funders -- has tried to do an autopsy, to figure out and be honest about what went wrong, and then, to use the time the rescue grant has provided to do whatever is necessary to prevent the same thing from happening all over again. Any funder who steps in with rescue money and does not insist on this kind of autopsy is, in my opinion, just enabling the organization to walk itself right back up to the brink.

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you forgot to mention that the Texas Observer is a left-wing magazine

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"We" can also learn not to out-purity The Nation on not taking ads or not out-purity Counterpunch on not putting up even a partial paywall. Dick, the Observer has a laundry list of sins peculiar to itself, including alleged racial and other turmoil in the past few years. Also, IMO, it needs to work on editorial focus issues. How IS it, or should it be, distinct from the Trib, Texas Monthly, etc.? https://beloblogging.blogspot.com/2023/03/rip-texas-observer-not-right-now-but.html

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Good points, Dick. Mus confess I have never read the Texas Observer -- but I'm sure I would miss it if it disappeared!

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Thanks for this. One of my biggest issues with the American Journalism Project is their exclusive focus on non-profits. I've argued since that Project's creation that their support is as useful -- and important for democracy -- for B-corps, LLCs, and any other corporate construct as it is for not-for-profits. All of these new enterprises need sustainable business models, whether the 'equity' source is philanthropy, mission-driven capital, or traditional return-based capital. Philanthropy isn't any more interested in perpetual support than other capital sources. And incentive alignment is more natural between journalists -- who own equity with some upside -- and sustainability than it is in some non-profit contexts. Endeavors like the Baltimore Banner and the Colorado Sun (both B-corps) are as worthy of scaling support as those strictly dependent on philanthropy.

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