Thursday, December 03, 2009

The man who may supersize non-profit news

First of two parts. Part two is here.

David S. Bennahum may be able to do for non-profit journalism what Ray Kroc did for hamburgers, making him well worth watching as the hunt continues for ways to fill the journalistic void left by the meltdown of the traditional media.

A former Wired Magazine writer, turned Internet ad man, turned non-profit news maven, Bennahum is the founder and chief executive of the Center for Independent Media in Washington, DC, a philanthropic organization that is building a network of statewide news sites by pursuing some of the same principles employed by the founder of McDonald’s to put his dining establishments all over the map.

Bennahum quietly has raised more than $11 million since 2006 to launch award-winning operations employing 35 individuals to cover news and politics in five states adn the nation's capital. He started with the Colorado Independent and moved on to found Independent-branded sites in Iowa, Michigan, Minnesota, New Mexico and Washington, DC. He is crisscrossing the country nowadays to try to gather the necessary donor support to expand next year to California, Florida and Texas.

Bennahum’s accomplishments as a fundraiser are significant. The support he has raised over the life of his young organization surpasses every non-profit news organization but Pro Publica, which benefits from a $30 million pledge from the single, wealthy family that founded it. Bennahum has built his organization through dozens of four-, five- and six-figure donations, the largest of which he says was $150,000.

Unlike other news non-profits, which tend to be one-off labors of love cobbled together by trial and error, there is a distinct discipline to the systematic way the 41-year-old Bennahum (left) is building his organization, donor-by-donor and state-by-state.

His ability to cookie-cut news sites brings to mind some of the concepts that that helped McDonald’s grow from a single Southern California hamburger stand into a global fast-food empire. (The empire, as you may recall, generated sufficient wealth that Kroc’s widow in 2003 bequeathed a tidy $200 million to National Public Radio, by far the largest gift in its history.)

Kroc built McDonald’s by developing dozens of replicable systems and procedures, while scrupulously tracking costs to assure the consistency of his burgers and the predictability of his profits. McDonald’s pickle-to-bun ratio, for example, made it possible to instantly tell if an operator had deprived customers of their rightful pickle ration or, worse, if the operator was giving away too many, thus nibbling into profit margins.

Bennahum bristled at being compared to Ray Kroc when we skipped the $14 pancakes and stuck to the coffee at the elegant Clift Hotel in San Francisco, where he had been staying the week before Thanksgiving on a fund-raising swing. “Unlike McDonald’s,” he said in an interview at the pretentious Asian-Cuban fusion eatery off the lobby of his $165-per-night hotel, “there’s a lot of customization that takes place to fit the needs of local communities.”

Fair enough. But his apparent determination to master the metrics and activities of his growing enterprise suggests he is turning the creation and operation non-profit news sites into an increasingly refined art, if not a science. To see what I mean, take a look at the slick dashboard Bennahum has developed to monitor the pickle-to-bun ratios at his sites.

Each of Bennahum’s sites bears the Independent name, each operates on an identical technical platform, each was organized and launched in the same fashion and each is operated in substantially the same way with budgets ranging from $350,000 to $400,000 per year. A site in California probably would require an annual budget of $500,000, presumably because of the high cost of a cup of joe at a place like the Asian-Cuban joint at the Clift.

Bennahum said each of his sites is run by an editor who makes about $50,000 a year and are populated by four to six reporters, who start at $36,000 a year, plus some freelancers. Bennahum, who made some money in digital advertising during the Internet bubble, said he pays himself $200,000 annually and, owing to the depressed state of the economy, hasn’t had a raise in two years.

Local variances aside, the Independent sites are organized and operated with as much consistency as possible, each learning from the experiences of the others.

In something akin to the training afforded promising line cooks at McDonald’s Hamburger University, Bennahum conducts a boot camp before launching a new site for his new hires, as well as community volunteers who hope to become future volunteer contributors, paid freelancers or staffers.

Except for the DC site, which has a national flavor, the other sites stick mostly to government and politics in their states. No sports, no celebs and not much science or cultural coverage, except as it relates to state government and politics.

The state sites endeavor to work with local public broadcasters to provide them with enriched coverage in exchange for heightened exposure. The Independent sites so far have not collaborated with any local newspapers, because it would be “tricky,” said Bennahum. But the organization tracks – and carefully reports to donors – every reference in print to any of its reporting.

Unlike the founders of most non-profit news sites, who are fixated on the journalism they aim to provide, Bennahum recognizes that his job is building, running and financing his organization. While he is clearly proud of the work produced by his editors and reporters, he leaves the journalism to the people running his news sites.

He knows his primary job is to cultivate philanthropic support and, he hopes, find a way some day to sustain his organization by generating revenues from the traffic his sites attract. Right now, howevere, raising money is Job One. And he’s pretty good at it, too.

Next: Bennahum’s fund-raising secrets


Anonymous Anonymous said...

Don't you worry about the pressure he might face to influence coverage based on his donor desires?

I realize he's taking a hands-off approach here, but it does sound a bit like campaigning.

I'm not sure how many people trust our politicians, who survive on fundraising, to not sway to donor desires. In a clandestine way.

I do appreciate, though, that having site architecture ready to roll out is a huge advantage and offers economies of scale!

And the pay levels at least sound reasonable.

10:12 AM  
Anonymous Anonymous said...

Having visited the Center for Independent Media wabsite, I notice that it prides itself on "diversity of ideas" which it links to its reporting staff.

Reading the staff bios, I see that they are almost all left-wing activists or conventional journalists -- which is pretty much the same thing really.

As with McDonalds, I expect the product will be identical across the range -- bland, unchallenging "progressive" political pap in place of nutritious news.

1:08 PM  
Anonymous Anonymous said...

xxxUnlike the founders of most non-profit news sites, who are fixated on the journalism they aim to provide, Bennahum recognizes that his job is building, running and financing his organization.xxxx
Now that indicates a savvy and successful executive. Unfortunately, we have a generation of publishers elsewhere who not only push their (generally very right wing) viewpoints on the newsroom, but are now insisting on linking up reporters with sales staff.

3:14 PM  
Anonymous Anonymous said...

Center for Independent Media is no more a news organization than is the Liberty Lobby. It's the evil counterpart of the evil Fox News network - another partizan mouthpiece that serves no useful purpose other than to distract the public and to inure readers to superficial, error-riddled double-speak. The organization actually boasts that it hires professional political advocates as journalists, and makes a mockery of SPJ code of ethics.

Real independent journalism will need a source of funding other than partisan Got-Bucks foundations. Readers should systematically attack CIJ at the roots, telling those of it's funders who believe their funding an actual news service to please put their resources somewhere else.

5:43 PM  
Anonymous Anonymous said...

Bennahum should be praised for this great work.
Thanks for the tip Alan.

8:53 PM  
Anonymous Anonymous said...

Re: Don't you worry about the pressure he might face to influence coverage based on his donor desires?

All for-profit media take into account their advertisers in their reporting. Piss off an advertiser and they'll pull their funding. No difference.

9:50 PM  
Anonymous Steve Sherron said...

I'm curious as to what happens when the donor funds go away? I went to a couple of their sites and all I could see was Google Adsense as far as monetization. With the type of traffic they claim to be generating, why no adverts?

4:43 AM  
Anonymous Anonymous said...

It's interesting how these sites are all located in swing states. It's also interesting to learn that The Colorado Independent radically downsized after the 2008 elections. I am in the camp that says these aren't news sites. They are operated by political activists who masquerade as journalists. In this sense, the donations given to them are campaign-, and not journalism-, oriented.

12:14 PM  
Anonymous Anonymous said...

A smart businessman--which is exactly what journalism needs. The head-in-the-sand traditional news publishers either can't or won't embrace new content and revenue models.

I say "Bravo" and I wish him all the luck.

1:02 PM  
Anonymous Anonymous said...

The Colorado Independent is a terrific news source Coloradans. Recently, it has hired some more reporters and provides content that is unmatched in the state, especially on important natural resource issues. For anyone to say that the people who work there aren't reporters simply don't know what they are talking about. The Colorado Independent smokes Colorado's newspaper and television reporters on a daily basis.

9:05 AM  
Anonymous Raj Mehta said...

If good politics results in steady profits, don't see anything wrong with that. Nothing different from the other camp.

Afterall David is a good businessman, right?

4:32 PM  

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