By Hilke Schellmann

Moderator: Betsy West, associate professor, Columbia Journalism School
Alex Gibney, independent documentary film-maker: Financing and marketing investigative documentaries
Andrew Golis, deputy publisher, Talking Points Memo
Andrew Donohue, executive editor, VoiceofSanDiego.org
Bob Moser, investigative editor, Texas Observer
Brant Houston, Knight Chair for Investigative and Enterprise Reporting at the University of Illinois

Five panelists from print, documentary and online investigative outlets shared their insights Friday morning for developing innovative funding models for investigative reporting.

The Voice of San Diego, a four-year-old, investigative online news Web site covering the San Diego area, is a nonprofit and relies on large individual donors, grants from philanthropic organizations and reader pledge drives, said Andrew Donohue, the Web site’s executive editor.

The nonprofit news organization also relies on a growing stream of online ads. Although tax-exempt, it is required to pay taxes on the ad revenues, Donohue said. He also mentioned that the organization is incredibly efficient. “We spend $9,000 every year on production costs,“ he said.

The Voice of San Diego operates on a $1-million budget and has 13 staff members – 10 of them reporters, Donohue said.

Brant Houston, a professor for Investigative and Enterprise Reporting at the University of Illinois, who helped establish nonprofit investigative reporting centers US, was most recently involved in the opening of The Wisconsin Center for Investigative Journalism.

The surge in investigative reporting nonprofits has to do with the recent massive layoffs in the newspaper industry, Houston said.

“As people are laid off, they still have the fire to do investigative reporting,“ he said.

But, he added, while those setting up these centers  are great investigative reporters,  they have no management training and no experience in running  nonprofits.

He also emphasized the need for nonprofits to think about hybrid funding and multiple revenue streams. Collaboration with other news organizations is essential if they are to stay in business long term.

More specifically, Houston recommended syndicating stories for mainstream media outlets, attracting advertisement, collaborating with universities, establishing membership subscriptions, reaching out with online newsletters and finding creative ways to attract funding. The Wisconsin Center for Investigative Journalism, for example, is offering to “rent a reporter“ to other news outlets.

He also stressed the need to produce a wide array of stories frequently. It is not enough to do four or five big investigations a year, he said. These new centers must rely on communities for their survival, and they have to keep them interested.

Community involvement is essential to TPM’s business model. TPM is a for-profit investigative blog/online news outlet. Andrew Golis, the deputy publisher, stressed that the low cost of producing the site makes it easier to run  than a traditional newspaper. TPM relies on free software and until recently worked out of a small apartment in Chelsea.

TPM is basically an investigative blogging site and relies as much on its reporters as on tips from its readers.  It has put up large amounts of data on its site and asked readers to help analyze them.  The  site has also been able to attract many small donations from readers, many of whom support TPM because they are kept up-to-date about investigative projects. Posting regularly on the progress of investigations also helps keep eyeballs on the site, thus generating additional revenues.

Bob Moser of the Texas Observer talked about his magazine’s mix of traditional and innovative ways of funding. After nearly 40 years in investigative journalism, the magazine struggled financially in the early 1990’s and transformed itself into a nonprofit run by the Texas Democracy Foundation.

“During the last 15 years, we have been somewhat of a success story,“ Moser said. The magazine got funding from individual donors but also has a  small, but loyal subscription base. It gets foundation support as well. All these combined allowed the magazine  to add more staff positions and to publish more stories online, Moser said.

The formula for Texas Observer’s success: 1) find filthy rich donors; 2) have a loyal subscriber base; 3) have a board that commits to raise money; 4) get grants for special reporting and long-term development; and 5) hold fund-raisers — the Observer has two every year.

It is also thinking about setting up a for-pay  specialty blog and getting micro-funding for investigative projects (i.e. readers contribute small amounts of money to pay for an investigation).

Alex Gibney, runs the documentary production company Jigsaw Productions and won an Academy Award for his documentary “Taxi to the Dark Side.“

For his first Academy Award-nominated documentary “Enron – the Smartest Guys in the Room,“ Alex Gibney was able to get Mark Cubin, the owner of the Dallas Mavericks, interested in funding his film. Luckily for him, the film did well at the box office, made money and was nominated for an Oscar. After that success he was able to get funding through equity markets. They make revenues from theatrical showings as well as sales to TV networks. But the projects have  had varying levels of success.

“Each documentary is like a political campaign, you have to tailor it accordingly.” Gibney said.

He often teams up with an investigative print journalists. And he acknowledged the pitfalls of this model.

“My model is not particularly efficient,” he said. “It is rather inefficient.”

He is competing against fictional films at the box office and his highly produced and entertaining documentaries are pretty expensive to make.

What is the relationship of new media outlets to “old media”?

Andrew Donohue of The Voice of San Diego and Andrew Golis of TPM emphasized that they are not trying to be a daily newspaper that covers everything from movies, styles and local politics.

Andrew Golis also acknowledged TPM’s dependence on reporting by other news outlets. TPM reporters link to other media’s content and drive traffic to these sites.

The Voice of San Diego goes a step further and has collaborations with two local radio and two TV stations. But in order to avoid duplication of stories the Voice of San Diego will only cover a story if the editors and reporters know that they can do it better than any other news outlet and if they know that they are the only one covering it, Donohue said.

Alex Gibney confessed that he is a little pessimistic about journalism. He pointed out that with the shrinkage of newspapers there are less enterprise reporters on the ground,.

Reporting Standards and Ad Revenue

New media outlets are well aware of the struggle between the independence of the editorial side of the news organization and their dependence on ad revenue or support from outside donors.

Donohue said that the Voice of San Diego sets very clear guidelines for donors: “You are not getting any special treatment.”

He emphasized that these lines have never been crossed. The Voice of San Diego calls for transparency and publishes all its donors’ names on its Web site. Donors can fund a special reporter or a special subject area, such as health reporting, but they don’t get to pick the content, according to Donohue.

Moser emphasized that the Texas Observer makes it very clear to their philanthropic donors that they cannot influence the editorial side of the magazine. Donors cannot contact reporters.

Golis said TPM Muckracker has the same reporting standards as any regular newsroom; tips via the comments section which are not fact-checked, because they are comments, but as soon as TPM incorporates the tips into their reporting, the information gets fact-checked.

Journalists from the Voice of San Diego also make their reporting transparent on the Web site. The reporters blog about struggles to get their Freedom of Information Act requests processed. Readers have called up governmental agencies to demand that the documents are made public. It’s less costly than filing a lawsuit, he says.

The conclusion on innovative ways of funding?

Investigative journalism is far from dying. According to the panelists it just needs many creative ways of funding.