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Chicago foundations say they want to fund online local news. So why did Knight leave EveryBlock to die before MSNBC came to the rescue?
Why the EveryBlock Sale Matters: Chicago Foundations Pass the Buck on Sustainability
chicagonow.com - 13 weeks ago - 490 views
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Organizations: Knight Foundation
Companies: Chicago Community Trust | EveryBlock | Holovaty and Co. | Knight | Knight Inc. | Twitter | Twitter Inc
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Hey Mike,
Not sure I follow your line of reasoning. How did the Knight Foundation abandon Everyblock? By not giving them another million dollars?
a. I don't see why they should be expected to fund grantees in perpetuity. There are lots of folks vying for funding and two years is a good stretch of time to figure out a business plan.
b. It's safe to assume the EB folks are happier having taken a payout from MSNBC rather than signing up for another grant.
Also, what's wrong with a short turnaround for the CCT funding? What a relief compared to other grant application programs!
Yes, exactly that: by not continuing to fund a project that was proving itself one of the most significant and easily scalable initiatives to hit the online sphere in a long time. Eb could have died, and Holovaty could have taken the code along with him. If the foundations are talking about how to save an entire sector of local news, walking away from efficient ideas just because they haven't discovered a financial-sustainability strategy yet is damaging:
Damaging to the online news environment, which ends up with less news than before; and
Damaging in this case to the grantor, Knight, who obviously was so out of tune with major media (totally embarrassing, given it's Knight we're talking about) that they missed the future worth of EveryBlock entirely.
I doubt it was even much of an option. When you apply for a Knight News Challenge grant, you ask for X dollars over Y years. EB could have asked for money to sustain them for 3 years or more, but they went for 2 years. It's their responsibility to figure out what happens next, which they did, not a foundation's to keep them around.
Hey Mike,
Thanks for all the blogging, first off. You're quite prolific.
You're implying in your story that the CCT knows who it wants to give its funding to. What makes you think that and if so, who do you think they're going to give it to? Are there favorites you expect to pull down some cash?
It would be a decent premise – that a Chicago foundation walked away from EveryBlock after giving it initial funding – if only Knight were a Chicago foundation. It's based in Miami.
Patrick, news for you. Topic tabs are coming to the WC quite soon...
When it partners with the Chicago Community Trust to fund Chicago local online news initiatives--as it is currently doing--that's about as Chicago as it gets.
Sure, there's a connection of sorts, but these programs are explicitly structured to not be ongoing. The applicants have to figure out a sustainable way forward on their own. If you're not able to sell something to someone, you're not going to have much of a chance of that.
What was Everyblock selling?
Brad, I think Mike's point is that the foundation-support theory of the future of journalism, which has been bandied about a bit the past couple years, has a crucial flaw because of the mindsets of many foundations. They give some money to get something started up, but they don't stick around if they site can't make money, and the only reason anyone is even proposing that foundations support online news is because of the issue of whether or not they can make money. It reminds me of the NYT Magazine article a couple weeks ago on Philedephia's failing newspapers. Some expected Pew, located in the city, would step in and create a local online news source, but they decided against is because they expected it to just loose a lot of money.
But why is this a surprise to people? Newspapers are losing money....so why would a foundation step in to fund a new newspaper?
Why should the foundations think any differently than they are? It's just common sense. People want to pick a winner.
I disagree with the foundation support theory though I think it should be explored and am glad the ChiTown Daily News is doing it. At the end of the day, people work hard to make money so they can ameliorate their situations. Products must justify their presence in the market and must earn their dollars. If a product isn't earning it's keep, I don't care what it is, we should look to a foundation to bail it out so we can maintain the status quo.
I'm all for incubators and seed funding, if founders can't make it happen once they get their push-off, then it's their fault and problem.
I think that's the question isn't it. Are we looking to foundations to basically act as VC's or to provide ongoing support? Most of the talk around foundation supported or non-profit journalism seems to assume ongoing financing is provided by foundations and such. But if foundations only want to provide seed capital, there's a conflict with the model.
I actually think Everyblock is a huge success for Knight. Knight effectively created an open-source code asset that can be used by anyone, and created what would appear to be a sustainable product thanks to MSNBC picking them up. There's an element of luck involved to be sure, because Everyblock never even attempted to build a business model (They may have intended to flip the company all along). But there's an element of luck in any new venture.
I would be surprised if the Knight folks weren't pretty happy with how their relationship with EveryBlock turned out. They've received a lot of great press and awareness based on Everyblock's success and this acquisition.
That said:
No one's going to deploy the June 30th code in any substantial impactful way. It's out there for people to examine and poke at and draw ideas from, but the code that was released is not "Everyblock in a box." It comprises the components of EB. You still need a designer, a brand, someone skilled at getting governments to hand over their data, a developer to pull it all together into a good package and then a way to promote and market it so folks with find your site and check it out. In short, you need the Everyblock crew and MSNBC's abilty to point traffic at it. So yes, the code is out there, but if the idea was to release it in such a way that non-technical people could set up their own Everyblock's, that's not the case.
So the Knight people got their name out there and can point to a project that saw some degree of take-up from the public. They do not have an open source project that people can expand out to their communities on their own without significant investment.
I haven't looked at the code myself. Obviously it will need some work. But in theory it is a usable asset for someone. A city could use it to integrate into their own web site to publish data, for example. Especially smaller cities that might not make it onto MSNBC's radar.
Are they teaching programming in j-school now? Because if they aren't, they should. Everybody coming out with a journalism degree should be capable of at least some level of hacking today, IMO. Even if it's not required, students should make it their business.
(Makes me want to download the code and take a look right now....)
"Everyblock in a box. It comprises the components of EB. You still need a designer, a brand, someone skilled at getting governments to hand over their data, a developer to pull it all together into a good package and then a way to promote and market it so folks with find your site and check it out. In short, you need the Everyblock crew"
There are probably a dozen people at cityhall who could whip up an API and open the shit out of government data. But unfortunately they won't. Thank goodness EB did it. Shows it can be done and as long as government keeps building illogical hurdles there will always be business opportunity for entrepreneurs.
Also, I think some foundations are interested in seed funding while others are probably more interested in ongoing provision. Nothing wrong with that. I don't see why one should go after one for not doing the other or vice versa.
As far as I know, the ChiTown Daily News' Knight seed funding was not renewed. Where was the outcry there?
The Daily News does have an ongoing relationship with Knight, though the nature of the funding has changed a bit. They seeded us with a smaller, though still substantial, amount of money than EB's seed for two years. That funding ran out in our last fiscal year, and funded the beginning of our volunteer driven neighborhood reporter program (including my position). Right now, Knight, the Herb Block Foundation, the Ethics and Excellence in Journalism Foundation, and the Abra Prentice Foundation are providing most of our financial support, along with a number of individual donors and site sponsors. So while our seed funding wasn't renewed, we sought out and received continued support from Knight.
I think there are some folks in this discussion that don't have a clear idea about how foundations and non-profits work. The point of a non-profit isn't to become profitable or to make money. That's in the name. EB is unique because they were NOT a non-profit from the beginning. They weren't expecting to receive additional foundation support, nor would they be eligible for it, because they aren't a
501(c)3, a requirement for almost all foundation grants.
An organization like ours is going to rely on foundation funding indefinitely, though the goal is to minimize how much we depend on any one funding stream by cultivating a community of donors, developing relationships with businesses and institutions to sponsor the site, and seek out new foundation funders. Part of why we're doing it this way is that we think that journalism is a public good, and that sometimes pinning the production of news to a profit margin can compromise what gets published and why. I'm not saying the non-profit model is perfect, or that there aren't other ways, but that's what we're trying, and so far it seems to be working pretty well.
Looks like I am a bit late to the conversation, but I am missing any knowledge of what CCT proposes or any other local funding scenarios have been mentioned before.
Seems you are all referencing something a local foundation has proposed? Any additional info you can provide?
From my experience, there are many different funding strategies that non-profit donors groups follow, there is no single way they all do it. Some are more interested in the Seed Money stage (like an Angel investor), and others require some proof of sustainability and weening plans for longer term funding (more like VC).
As for supporting journalism in a local market through a non-profit structure, that does not REQUIRE funding from foundations, but does allow for it. You might enable funding for a particular NEW PROJECT from a foundation, but your core business could already be financially sustainable, just like any other firm.
This will answer your question:
http://www.cct.org/page10004548.cfm
Yup. The Chicago Community Trust is offering grants to non-profit and for-profit organizations that meet the main Knight News Challenge criteria, i.e. they're digital, focused on innovation, news-oriented, and aimed at a specific geographic place, in this instance, Chicago.
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