A $5 million grant from a single philanthropist will fund the launch in the San Francisco area of the most ambitious project yet to build a non-profit news organization to fill the growing vacuum left by the contraction of the mainstream media.
San Francisco businessman Warren Hellman today pledged $5 million to kick off fund raising for a new non-profit news organization being developed in partnership with KQED, the largest public broadcasting affiliate in the market, and the Graduate School of Journalism at the University of California at Berkeley.
Hellman said the group is “fairly far along” in discussions to have its reports carried in the Bay Area print edition of the New York Times.
Hellman’s gift will far surpass the funding that has been assembled to date by each of such other notable non-profit local news projects as MinnPost, Voice of San Diego, Chi-Town Daily News and Texas Tribune. As illustrated in the table below, the average funding since inception for the four other non-profit local newsrooms is $2.4 million, according to data provided by each of them.
The San Francisco project evidently is being launched in a manner similar to the Texas Tribune, which was founded
earlier this year with an initial gift of $1 million from John Thornton, an Austin venture capitalist. Thornton said in an email this week that he has raised nearly $2.5 million of the $4 million in additional donations he hopes to accumulate to fund the statewide online news site until it can begin generating sufficient revenues to become self-sustaining.
Hellman characterized his contribution to the San Francisco news project as “seed” funding, suggesting the nascent organization will attempt to grow its resources beyond the initial donation. If Hellman’s cornerstone gift can attract follow-on donors to the same degree Thornton has been able to leverage his donation, then the organization’s resources for covering Northern California could rival or surpass the $14 million that has been raised since inception by Pro Publica, the donor-funded nationwide investigative-reporting initiative launched in 2007.
Pro Publica, which is the biggest of the non-profit journalism ventures that have emerged in recent years to fill the void created by shrinking newspaper coverage, has an annual budget of about $9 million to support 32 full-time journalists and 5 administrators, according to Richard Tofel, its general manager.
There could not be a better place than Northern California to gain public support for new ways of reporting and delivering the news, said Hellman in a prepared statement. “The Bay Area has a voracious appetite for news and is one of the most engaged and community-minded regions in the nation,” said Hellman. “We are confident that this is an ideal place to create a new economic model that will sustain original, local, quality journalism, and we believe that the Bay Area will step up to support these efforts.”
Hellman is chairman
of Hellman & Friedman
, a successful private-equity firm that says it has raised and managed more than $16 billion in the last 22 years to invest more than 50 companies in such industries as health care, software, finance, manufacturing, energy, professional services and media. Its media investments have ranged from Axel Springer to Double Click and from Getty Images to Young & Rubicam.
Hellman’s decision to fund the most ambitious non-profit local news initiative in the nation climaxed a six-month examination of the problems and prospects for local news conducted as a pro-bono project by McKinsey & Co., the international consulting giant.
The study found that “local newspapers have collectively reduced their newsrooms by nearly 50% during the last five years,” according to the press release. “The impact is seen in the number of original, professionally written stories about the Bay Area, which at one major regional newspaper has declined from 100 to 40 stories per day.”
Hellman persuaded McKinsey to conduct the study after he was asked earlier this year to consider coming to the aid of the ailing San Francisco Chronicle, which has reduced staffing in its newsroom several times in recent years in efforts to staunch losses amounting at some points to more than $1 million per week. The Chronicle news staff today numbers some 170 journalists, as compared with a peak of 560 in 2000.
The journey that resulted in Hellman’s bequest got its start in February, when Carl Hall, a reporter who left the Chronicle to join the staff of the Northern California Media Workers Guild, approached Hellman to see if the financier could help the Guild explore the potential purchase of the Chronicle.
While Hall said the initial impulse was to try to find a way to shore up the money-losing Chronicle, he said in a telephone interview that further research indicated “the business model may not be there to put a sustainable, for-profit economic foundation under quality, professional journalism.”
Attention turned to what could be accomplished by a well funded, non-profit newsroom focused on the beat coverage, investigative reporting, enterprise projects and science and cultural reporting increasingly curtailed by economically strapped daily newspapers.
Hall said the depth and scope of coverage planned by the news project is beyond what other non-profit news operations have attempted in places like Chicago, Minneapolis and San Diego. The other operations do solid interpretive, investigative and cultural reporting but do not attempt to emulate what Hall called the “meat and potatoes” coverage historically provided by metro dailies.
While the operators of non-profit newsrooms in other markets say they are functioning on budgets of some $1.2 million or less, the annual budget envisioned for the new San Francisco newsroom is intended to be significantly larger, said Hall. In part, he said, that will be because the operation will be committed to professionalism. “We don’t want volunteer labor,” he said. “The staff has to be decently paid, professional-quality journalists.”
Hall declined to disclose the details of the non-profit’s projected staffing and budget.
The new organization will be influenced, supported and complemented by the radio and television news coverage already produced by KQED and by the efforts of Berkeley journalism students who for several years have operated innovative and well respected hyperlocal websites in places like the Mission District of San Francisco and such neighboring communities as Oakland and Albany.
“I see this new effort to create a high quality, regional and local digital news site that’s sustainable, that's tied closely to very local efforts like the ones the school has launched – and that is built from the ground up,” said Paul Grabowicz, the associate dean of the Berkeley j-school.
“That's one of the main attractions for me,” said Grabowicz in an email. “We're trying to envision what the future will be and create something from scratch to take us there. And hopefully others will be able to learn from what we learn, whether they're existing news operations or brand new start-ups."
Although neither the Chronicle nor the MediaNews Group papers serving most of the rest of Northern California were named as participants in the new non-profit venture, it should not be considered an antagonist to the existing media, said Neil Henry, dean of the Berkeley journalism school.
“This is intended to provide original and meaningful journalistic content in new and engaging ways to help address the shrinkage of news due to the industry's contraction,” he said in an email. “It is certainly more friend than foe to the existing industry in that it seeks to find ways to save local journalism, which is certainly in the industry's interest, as well as the public's.”
Hall said Guild members at the mainstream dailies shouldn’t feel threatened, either. He said new competition in the market ought to encourage the existing media to hang on to the staffs they have – and perhaps consider augmenting them.
“When more people sell ice cream,” said Hall, “more ice cream will get sold and everyone will do a better job of selling it.”