» Kevin Davis Covering the Business of Nonprofit and Independent News Thu, 12 Mar 2015 19:10:11 +0000 en-US hourly 1 Kevin Davis: What the ‘Lens’ story teaches news nonprofits about editorial independence Tue, 10 Feb 2015 17:56:29 +0000 “Unfortunately in today’s society, good journalism doesn’t necessarily translate to plentiful funding,” writes Paul Maassen, general manager of WWNO, in NetNewsCheck’s piece about the saga of how the Lens of New Orleans lost its office space on the Loyola University campus there.

He’s right. Today, nonprofit newsrooms around the globe have to scramble to keep the lights on, rely too heavily on too few funding sources and, as a result, are susceptible to influence exertion and retribution from funders, supporters and suppliers. 

While the case of Loyola’s decision to not renew the Lens’s lease for office space was ostensibly about resource constraints, the appearance of this move being punishment for the paper’s coverage of the university’s president, the Rev. Kevin Wildes—who then chaired the New Orleans’ Civil Service Commission—being in bed with city officials is very troubling.

Not only is this bad for the Lens (costing it more than $30,000 per year to relocate and pay for new space), it also deprives Loyola’s journalism students the opportunity to work on the forefront of civic journalism. And it negatively impacts the media environment in New Orleans, which continues to struggle with the information needs of its citizens. 

Unfortunately, this is not the only case of apparent backroom attempts to punish a nonprofit newsroom that aims to inform its community while also helping train a future generation of journalists. In June of 2013, legislation was introduced by the Wisconsin legislature that would have evicted the Wisconsin Center for Investigative Journalism from its UW-Madison offices and barred faculty from working with its reporters.

Despite these attacks, both the Lens and the Wisconsin Center are able continue to report on the type of civic stories that commercial news organizations often can’t or won’t do. (Full disclosure: both the Lens and the Wisconsin Center are members of the organization that I run, the Investigative News Network.)

This is not an issue just for university-based nonprofit news organizations. Any nonprofit that accepts grants from a philanthropist or foundation also inherits the legacy of the funder or founder. Nonprofit news organizations that accept monies from foundations or directly from well-known philanthropists such as George Soros, John Arnold or the Koch Brothers are often painted with the funder’s political brush and suffer attacks based on that presumption.

But there are concrete steps a nonprofit can take before it accepts funds, services or enters into any contract with an outside party:

Be transparent. Producing ethical journalism in the public interest isn’t easy, but it’s what the 100-plus nonprofit news organizations that are members of INN do. Helping people understand what you do, why you do it and where you’re coming from is proving to be even harder. It starts with mission-driven organizations acting in the public interest by disclosing their donors and encouraging their readers to make up their own minds about the ethics and motivations of a story or the organization behind it.

Adopt strict editorial independence and conflict of interest policies. Under the review of leading ethicists in the field of journalism, INN recently crafted and adopted an Editorial Independence Policy, specifically to provide our nonprofit newsrooms with a clear statement to provide to their funders, supporters and suppliers that states up front and center:

“Our organization retains full authority over editorial content to protect the best journalistic and business interests of our organization. We will maintain a firewall between news coverage decisions and sources of all revenue. Acceptance of financial support does not constitute implied or actual endorsement of donors or their products, services or opinions.”

By adopting, posting and providing this policy to all its funders, supporters, suppliers and readers, along with a clearly stated Conflict of Interest policy, an independent news organization can go a long way to setting expectations up front. By educating the supporter at the outset, we believe that it will prevent and rebuff future attempts to influence the organization’s editorial content. 

Tell your own story, before someone else does. While journalists and practitioners pride themselves on their ethics and ethos, the battering that our profession has taken in public opinion means that it is now easier for bad actors to attack the source of a story than to deny the facts. Now more than ever, it is incumbent on investigative reporters and mission-driven news organizations to proactively tell their own stories and educate their audience rather than let others, who may or may not have the public’s interest at heart, do it for them.

While these steps may or may not have prevented the turn of events in New Orleans and Madison, it is likely that by adopting these ahead of time, news organizations will be more effective in establishing clear boundaries up front, while at the same time increasing the level of trust with their discerning audience members.

This post originally appeared on NetNewsCheck and has been republished with permission.

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Kevin Davis: 5 things we’ve learned from a year of INNovation Fund grants Tue, 03 Feb 2015 18:09:01 +0000 INN CEO Kevin Davis

INN CEO Kevin Davis

This week marks the opening of the third round of the INNovation Fund, a micro-grant program managed by the Investigative News Network to help with business experimentation in nonprofit and public-media newsrooms across the country.

The program is made possible by a $1 million commitment by the John S. and James L. Knight Foundation over two-years to invest in business experiments that look to drive audience engagement or experiment with new revenue streams.

Unlike for-profit organizations, nonprofit news organizations do not have equity to leverage when seeking capital for business investment. Furthermore, most grantmaking puts limitations on the amount of overhead allowed on any given grant.

Yet nonprofit newsrooms are expected to iterate and innovate to increase the amount of engagement with their target audiences, reduce their dependence on existing funders and diversify their revenue streams to become sustainable.

In its first year the program funded 16 business experiments; applications for the third round are now available with a deadline of March 2, 2015. We will announce winners on April 15.

Here’s what we’ve learned from the experiments we have funded so far:

  1. Accept this for what it isand for what its not. We understand the need for nonprofits to secure as much funding as possible. We also understand the frustration when a nonprofit has funding needs that are more pressing than business experimentation. The INNovation Fund grants are not a good vehicle to address those pressing issues; it is designed specifically for organizations seeking diversification of funding but who do not otherwise have the wherewithal to experiment with diversification. We have received many proposals from great organizations that unfortunately are either not in a position to conduct experimentation or who look to leverage these funds into a larger fundraising drive that makes it difficult for us to determine what the experiment is, and how we can measure the impact of our investment.
  2. Do your homework. Every winning INNovation Fund grant proposal can be found at, including copies of the original proposal and budgets. In addition, the Investigative News Network publishes information about all of the other programs that we offer to support nonprofit newsrooms. When we see grant requests for projects that are materially the same as what we have previously funded or are covered under current programs we already offer (i.e. a mobile-ready, WordPress CMS and Web services), it’s unlikely that we’ll fund your proposed project.
  3. Leave the kitchen sink out of it. Paying for overhead continues to be a big challenge for nonprofits. And it is reasonable to include some level of overhead—less than 10 percent—in a budget proposal. But adding budget line items for resources or costs that are not directly related to or working on the proposed projects is a no-no.
  4. Focus on achieving one or two desired results using one or two independently verifiable metrics. Impact measurement and metrics are an important yet evolving topic. With this program, we intentionally left the definition of what metrics will be used to evaluate the effectiveness of the business experiment up to the nonprofit to avoid imposing anything arbitrary on top of the work. However, defining metrics has proven to be tricky for some nonprofits. For example, many proposals were submitted previously with upwards of 10 different proposed metrics. Instead, think about the one or two ways you personally will measure the success of your experiment. In this case, less is definitely better than more.
  5. Be open to unexpected results. As a society, we often frown upon failure or see anything less than what was expected as a sign of weakness. In business, however, organizations often pivot because the realities on the ground can be very different from expectations. We urge grantees to be transparent about the process and results, to share that knowledge and to embrace the unexpected. We do not penalize organizations that try and fail, but we cannot help organizations that are not open to learning from the process regardless of outcomes.

Kevin Davis is CEO and Executive Director of the Investigative News Network (INN), a growing consortium of over 80 nonprofit newsrooms producing non-partisan investigative and public interest journalism. Follow him on twitter, or click here to read more of his work.

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Kevin Davis: Five trends for nonprofit news in 2015 Tue, 06 Jan 2015 17:35:52 +0000 INN CEO Kevin Davis

INN CEO Kevin Davis

It was a weird year in media, 2014. Vox and Vice got billion-dollar valuations. The New Republic and First Look Media publicly imploded. Sony allowed cyber-terrorists to impact what films we get to see and how. And probably the biggest story of the year was not Net Neutrality, but rather a whodunnit podcast called Serial.

While I cannot begin to predict what comes next in the spin cycle, there continues to be good news coming out of one of the fastest-growing sectors in the American media landscape: nonprofit news organizations. In fact, I am so bullish on the nonprofit news model that I am predicting that 2015 will be the year of nonprofit news.

Here’s why:

1. There is a much brighter light at the end of the tunnel: Five years ago, when the organization that I run, the Investigative News Network, was formed, the need for nonprofit public interest journalism was acute, but the funding and business models were far from clear.

There are now enough examples of long-term success in revenue diversification and generation that we have a good sense of what can and will support mission-driven organizations.

We know that there is no “revenue black box” that is yet to be discovered. We know that sustainability — or at least the ability to have sufficient resources not just to do the journalism, but maintain a healthy business — is comprised of multiple revenue streams that primarily draw their value from the communities and people served (not third-party advertisers).

2. Low cost/Ease of use: It has never been easier or faster to establish a nonprofit news organization.

Today, start-up nonprofit newsrooms have the ability to get a free mobile-ready website, training on how to run and grow a successful nonprofit business and gain direct and practical knowledge of leading-edge techniques on business development.

Most importantly, there is no longer the need to reinvent the wheel. There are now literally hundreds of nonprofit and mission-driven organizations in the U.S. and even across the globe that have spent years in the trenches clawing their way forward.

3. Money attracts more money: What we have also learned from the past few years is that organizations that start underfunded often stay underfunded, while organizations that were able to secure sufficient funding for both the editorial and business side of the house tend to do much better in the near and long-term.

One only need to take a look at the most successful organizations in the nonprofit public interest media space to see this trend. ProPublica, Texas Tribune, Voice of San Diego and, most recently, The Marshall Project not only were able to secure funding from angel investors, but also were able to parlay that base into additional funding from foundations as well.

And is it any wonder? Foundations, like other types of investors, are looking for organizations to invest in that have the wherewithal to succeed and who are not wholly dependent on their investments to keep the lights on. I predict that this trend will continue into 2015, but, as a result, there will be further decline in foundation funding for start-up nonprofit newsrooms.

4. More mergers and acquisitions: In 2013, two leading members of the Investigative News Network, the St. Louis Beacon and the Rocky Mountain Investigative News organization, pioneered a way forward by merging with local public media organizations. We see the trend of independent and public media nonprofit news organizations coming together to jointly meet the needs of the communities that they serve continuing and accelerating in 2015.

The reasons are both being driven by market realities and the need for greater reach and scale. From a market perspective, there are only so many nonprofit newsrooms that a particular market can sustain. Instead of competing against each other, nonprofit newsrooms (which are inherently predisposed to collaboration) are often better-off working together on fund raising.

Likewise, by reducing fragmentation, these organizations have a better shot of cultivating a dedicated audience — and a membership revenue stream as a result — by combining forces and working across multiple media platforms including radio, broadcast and digital.

5. Becoming a hits-driven business: While there was much discussion in media circles in 2014 about the need to come up with metrics to quantify the impact of journalism, no verifiable metric came close to the 40 million downloads and unprecedented success of Serial, a podcast by the team that produces This American Life.

The implications of this success go far beyond the resurrection of the podcast as a medium and business model. What Serial proves is that people will go out of their way for good stories that they can discover and share.

While there are many good stories being produced on an ongoing basis by many nonprofit and for-profit newsrooms, it is the discovery and sharing parts that are essential in breaking-out in today’s media maelstrom.

Successful commercial producers of entertainment and news know that in media marketing, nothing is left up to chance and that a lot of planning, resources and work go into the process.

Just as money begets money, so do hits beget hits. Would Serial have been as popular if it hadn’t been produced by the This American Life team? Maybe so. But I do believe that Serial most definitely got noticed, written-about and promoted because of its pedigree.

I predict that the implications of this move — focusing on hits for nonprofit newsrooms — will be profound. Attention, and therefore funding, will most certainly go to those organizations that can break through, rather than organizations covering beats regardless of how socially important the topic.

In my opinion, nonprofit organizations that ramp up, break through and get their content noticed will continue to lead the way into what promises to be a very important year for nonprofit news.


This column originally appeared on NetNewsCheck and has been republished with permission.

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Kevin Davis: Public interest focus beats commoditization Tue, 04 Nov 2014 17:36:01 +0000 INN CEO Kevin Davis

INN CEO Kevin Davis

Like many people in the news business, I still subscribe to my local paper. And like most consumers today, I rarely read it.

Why? Because, frankly, I know that I’ve more than likely read most every national, sports, business and entertainment story online, elsewhere before the ink is dry and the paper hits my driveway, newsletter hits my inbox or even before it’s up on their home page.

And it’s not just print. According to the FCC Report “Information Needs of Communities ,” the average local television station produces less than 20 percent or about one-and-a-half minutes of civic news in every 30-minute local television broadcast.

One can find information about the latest Kardashian to begin a modeling career anywhere and everywhere. Information about the salaries and perks the local city council just voted for themselves is increasingly difficult to find. Just ask the citizens of Bell, California how long it took for a beat reporter from the Los Angeles Times to uncover the corruption in their city.

So why do I still subscribe? Besides a vague sense of allegiance to the news economy, I read the newspaper for the occasional information that I can’t get anywhere else. Mostly, that’s confined to information about local and regional issues tucked inside the B-section that helps me better understand the problems my community is facing and what the elected and unelected are doing about it.

And there’s strong indication that I’m not alone.

All one has to do is look at the growing news businesses of folks like Texas TribuneVoice of San DiegoChalkBeatMinnPost and other public interest-focused nonprofits that see the gaping hole left by commercial media not just as a problem, but an opportunity.

These nontraditional, noncommercial news organizations not only look to provide the type of information that commercial media — both print and broadcast — produce less and less, but they also look to monetize those efforts.

Case in point, the Texas Tribune produces TribFest, a three-day event that “brings together some of the biggest names in politics to explore the state’s and nation’s most pressing issues: public and higher ed, immigration, health care, transportation, energy, the environment, criminal justice and government transparency.”  With attendance around 3,000 people range, the Knight Foundation reports that Texas Tribune nets over $400,000 annually from the event.

Voice of San Diego and MinnPost are embarking together on membership programs that are explicitly focused on providing citizens greater access to civic information and the people that provide it. With a historical average of $150 in donations per annum per member, Voice of San Diego’s Scott Lewis is looking to grow membership for his organization from approximately 1,500 in 2012 to 5,000-10,000 members per year. That’s a realistic goal of $1.5 million in annual revenue directly from a population significantly smaller than the subscribers to a small to midsize newspaper.

Unlike the commercial news organizations in the same markets, these small, nimble news organizations are not looking for more efficient and cost-effective means of producing and distributing the typical news stories (world, national, business and sports); they are not producing that type of content at all.

These organizations aren’t competing with the Yahoos, Bleacher Reports and social networks for highly commoditized, non-differentiated content. Rather, they are focusing on the time and expertise-intensive, yet highly prized and differentiated content that is most valued by the communities (not advertisers) they serve.

If the leaders of these nonprofit news organizations are figuring out how to sustain their operations with civic and accountability news products and services, why haven’t local news organizations (presumably with greater resources and reach) followed suit? It’s good for the people, it’s good for democracy and it’s good for business.

This column originally appeared in NetNewsCheck and has been republished with permission.

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Kevin Davis: News neglects marketing at its peril Fri, 19 Sep 2014 20:43:24 +0000 My first job in media was way back in 1989, when I became a lowly sales and marketing coordinator for a movie studio’s then biggest cash cow, the home video department.

INN CEO Kevin Davis

INN CEO Kevin Davis

There I learned the fundamental principles of media marketing: never, ever just throw product out into the marketplace and hope for the best.

Sure we had some big movie stars and big budgets, but more often than not we spent significant time and effort on marketing titles that we affectionately referred to as “straight to home video.” These were the dogs, the copy cats, the no-namers and “B” movies. More often than not, we made money on every release.

Marketing wasn’t an afterthought. It was a science budgeted as a standard cost of doing business. According to the Hollywood Reporter, “for every dollar spent on producing a major film, the studios have been spending 51-58 cents to release and market it.”

So if every media business — movies, TV, PPV, video games, music and books included — understands the value of marketing, why do journalists and news producers still have such a hard time with it?

Marketing is not just for entertainment products. Documentaries, non-fiction publishers, museums and exhibitions all leverage both tried-and-true traditional as well as digital marketing strategies to maximize the impact and return on their works.

Certainly there are ethical issues that have made reporters and editors uncomfortable with the notion for decades. In the old news models, there were such things as publishers, marketing and circulation departments that were responsible for this function and could keep these seemingly corrupting and time-consuming tasks at arm’s reach.

Today’s independent and digital news producers rarely have that luxury. Moreover, the lines between journalism, distribution and marketing have become inextricably intertwined.

In her excellent blog post “How to Become a Forbes Blogger,” Susannah Breslin writes:

“I am familiar with how to drive traffic to a blog or site. This is what it means to be an online writer today. If you think that is sad, corrupting or indicates the demise of journalism, I suppose you are a more moral person than I am.

“These days, it’s not enough to be a good writer online. You have to be a smart marketer, your own content factory, your own publicist. If you can do it all, you are golden. If you cannot, you are screwed.”

If your mission, core function and purpose in your work is to inform the public, how could there be any better use of your time — besides in writing the ethically-driven journalism itself — than making sure it gets seen by the very people who need it?

At the 50th annual conference for the Society of American Business Editors & Writers in April 2013, AOL Editorial Director Fara Warner stated that journalists need to view social media as today’s circulation department. With new means to circulate content, journalists must develop new ways to present not only their content, but also themselves.

Sarah Szalavitz of 7 Robot, a boutique marketing company, also said, “While content creation once ended with delivery, today, it is only the beginning.”

While in the long-term we at the Investigative News Network advocate for independent and nonprofit publishers to budget for marketing and social content activation as part of the cost of doing business, there are still specific tasks independent journalists (and those who work for less business-minded organizations) can do.

The following pointers have been updated but are based on tips given in an excellent article by Daniel Vahab and Lisa Chau, entitled How to Promote Your Article Online:

  • Figure out who should be reading this piece of content, where they are online and what they are saying about the subject.
  • Share your piece on all the social media platforms where your target audience frequents.
  • Actually interact with your target network and connections. Don’t just talk at them.
  • Proactively curate a team of social media “ambassadors” – socially connected experts and aficionados — for the topic you are writing about who can help you promote and distribute your piece.
  • Tweet, tweet and then tweet again. Vary your language, don’t just retweet or ICYMI. Vary the time of day, and count retweets and favorites to determine best times for future tweets.
  • Add your article’s link to your email signature and away message and send your piece to any lists of which you’re a part (a recommendation by The Huffington Post to all of its bloggers).

As Poynter states in its Principles of Journalism, “[Journalism] must strive to make the significant interesting and relevant. The effectiveness of a piece of journalism is measured both by how much a work engages its audience and enlightens it.”

If we are to accept this statement as self-evident, then it is the ethical obligation of every journalist, editor and publisher today to not just commit him or herself to promoting content, but also to become as well versed and practiced in the art of content activation as in the craft of journalism.

This column originally appeared in NetNewsCheck and has been republished with permission.

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What you need to know about the $1 million INNovation Fund Tue, 28 Jan 2014 22:58:35 +0000 Nonprofit news publishers are true believers, committed to informing the public and strengthening democracy. But they are also business owners who have to meet the same economic reality facing for-profit media and technology organizations.

At Knight Foundation and the Investigative News Network, we believe that innovation is key to sustainability in the nonprofit news and public media space. So together, we have launched the Knight-funded INNovation Fund to help online news providers diversify their revenues, invest in their businesses and experiment with technology innovations to help increase their prospects for long-term viability.

We hope that this fund will encourage experimentation, collaboration, lesson sharing and above all increase the ability for these organizations to have long-term, positive impacts on the communities that they serve.

The fund totals $1 million over two years. Below is a Q&A to help you decide if the INNovation Fund is right for you.

Q: Who can apply?
A: Nonprofit, online news organizations in the United States and public media organizations. Organizations that don’t have their own 501(c)(3) exemption but operate under the fiscal sponsorship of a 501(c)(3) can also apply.

Q: What about projects that are not in the US?
A: Projects must be part of a US 501(c)(3) nonprofit or be a fiscally sponsored project of a US 501(c)(3) project.

Q: How much are the grants?
A: We will accept grant proposals for around $35,000 but expect grants to average about $25,000.

Q: Will you fund content projects?
A: Grants will be limited to investments in sustainability and initiatives that show how audience engagement can translate into revenue. We’re open to all ideas, but proposals must stipulate how the innovation will help the organization increase and diversify revenue, or increase audience size and engagement.

Q: What are the deadlines?
A: Applications for Round 3 are due at midnight (pacific time) on Monday, March 2.

Q: How should the projects measure success?

A: In each case it will be up to the project to determine what metrics make sense.  The metrics must be quantifiable, verifiable and sharable for future guidance on similar initiatives. For instance, if a project aims to increase audience engagement, it could track the number of people who sign up for newsletters or attend events, not just general Web traffic.

Q: How can a recipient spend grant money?
A: The grants can be used to help an organization cover hard costs for any “shovel-ready” project that they believe may help them diversify their revenues either in the short or long term.  In this case “shovel-ready” means projects that have already sourced necessary resources and secured firm estimates of costs.

The types of projects we expect to fund include but are not limited to:

  • Events: e.g. money to hire an event coordinator, to secure space, for marketing and to cover costs of selling tickets
  • Technology: e.g. money to build a mobile app, as well as market it
  • Sales Development: e.g. money to hire a sales consultant to develop a corporate sponsorship or local advertising sales offerings and materials
  • Services development: e.g. money to develop and create a data or news application or development services for third-party paying customers
  • Membership development: e.g. money to hire a street team to go to local civic events to garner sign-ups for a newsletter or membership product
  • Operations development: e.g. money to hire a business consultant to review internal costs or to develop a plan to reduce overhead and third-party expenditures

Q: Who will decide the winners?
A: INN’s management team will review the applications and make recommendations to the INN board to pick winners.

Q: Will my project be made public?
A: If you are selected as a winner of an INNovation Fund grant, INN will document on its website and possibly on other platforms a public profile of your project, and update it at the end with “lessons learned” and results. You will be expected to share your experiences and results, the good, the bad and the ugly. We learn a lot even when we fail.

Q: What about the intellectual property created by the INNovation Fund projects?
A: All intellectual property  for any work, including technology or systems developed under this fund will be shared with INN and open sourced for use by the sector.  Example: if a new piece of software or mobile app is developed, the source code for them would be posted publicly and available for use under an open source license.

Q: What questions should my application answer?
A:  Applications will only be accepted via the online form.  The application includes such questions as:

  • What are you proposing and how does it fit with your organization’s sustainability plan?
  • What do you hope to learn from this experiment?
  • How will you know if the initiative is successful?  And how will you measure success (please provide specific objective metrics)?  Where have you seen this idea work before or is this new?
  • What resources (internal and external) do you need to conduct the initiative?  Have these resources done this type of work before?  Do you need assistance in locating resources to make this a reality?
  • Please provide a line-item budget (you may provide a standard profit and loss template for this)

Q: How can I apply?
A: Complete the online form at INNovation Application Form. Round 3 application period will open in February 2, 2015. Be sure to complete the budget form to upload with your application.  Keep in mind that we will need as much detail as possible. Should INN need more detail a representative will contact you.

Q: How can I talk further with the INN and Knight teams about the INNovation Fund?

Please submit questions online or via Twitter using the hashtag #INNFund.


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Types of Revenue for Nonprofit Newsrooms Thu, 23 May 2013 14:45:27 +0000 0 Fiscally-Sponsored Projects Must File Their Own 990s Sun, 24 Mar 2013 14:36:34 +0000 INN has been focused on how nonprofit newsrooms acquire 501(c)(3) status from the IRS ever since I arrived at INN back in July 2010. Our involvement was born out of necessity: INN itself struggled for 19 months to win a favorable determination letter.

After that, INN began to assist individual member projects that also found themselves in IRS limbo, in some cases waiting up to 31 months for a determination. In order to focus on a solution to help the IRS better handle applications from mission-driven nonprofit newsrooms, I also worked with the Council on Foundations Nonprofit Media Working Group on its recent report, “The IRS and Nonprofit Media – Toward Creating a More Informed Public.“

With our own freshly-minted determination letter in hand, INN recently began to offer fiscal sponsorships to start-up member projects that operate within the rules of 501(c)(3), are consistent with our mission to inform the citizenry with investigative and public-service journalism, and which are only just now beginning the time-consuming, expensive and confusing process of applying for a 501(c)(3).

Offering back-office and financial oversight as a fiscal sponsor has its own risks and challenges. Our research has found that there are ways to do fiscal sponsorship right, and there are ways to do it wrong. INN has gone to great lengths to offer the appropriate services to our fiscally sponsored projects, including the intention to handle all the necessary tax filings for those projects. But on this important detail we were wrong.

Tax attorney and former IRS agent Kevin Shortill Esq., of the law firm Covington & Burling LLP, said: “All nonprofit organizations are required to file an annual tax return with the IRS: Form 990, Form 990-EZ or Form 990-N. This annual filing obligation includes organizations that have not yet received a determination letter from the IRS that they are tax-exempt, and it also includes organizations that are fiscally sponsored by INN or other fiscal sponsor.”

(Disclosure: Shortill and Covington & Burling LLP represented INN in its successful bid to get its IRS determination letter and has generously continued to give us Pro Bono advice in support of our mission.)

In conversations with Shortill, I further learned that while this is a relatively recent development — a requirement since 2006 — the IRS expects that revenues that are accepted by a fiscal sponsor on behalf of a fiscally-sponsored project need to also be included in its 990 filing and that monies distributed to a fiscally-sponsored project by a fiscal sponsor must be recorded as either grants or expenses therein. This means that grants, donations and monies received on behalf of a fiscally-sponsored project are effectively double filed: first by the fiscal sponsor, and then by the sponsored project.

“Failure to file a [990, 990-EZ or 990-N] return for three consecutive years automatically revokes an organization’s tax exemption and, if that happens, a new application for exemption must be made with the IRS,” said Shortill.

Additional information on the annual filing requirements is available from the IRS FAQ on annual reporting requirements for exempt organizations..

The IRS states: “Section 6033(j) of the Internal Revenue Code automatically revokes the exemption of any organization that fails to satisfy its filing requirement for three consecutive years. The automatic revocation of exemption is effective as of the due date of the third required annual filing or notice.“

It is the responsibility of all executive directors and project managers of fiscally sponsored projects that have an Employee Identification Number (EIN) and are registered as nonprofits in their State to familiarize themselves with the code, engage the services of an experienced tax attorney, and file a 990, 990-EZ or 990-N every year.

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The Elevator Pitch For Mission-Driven News Nonprofits Mon, 20 Aug 2012 21:51:21 +0000 You’ve heard this premise before: You’re standing in front of an elevator and, as the doors open, in front of you is the key individual that you’ve tried for months to get on the phone.

Once you’re in the elevator you realize you have only 30 to 60 seconds to make the right impression and get him or her to take note.

While this scenario may not play itself out quite as dramatically in the real world, as nonprofit news executives we often find ourselves in situations where we have to articulate what we do, why we do it, and why anyone else should care – and we have to do it quickly.

There are many articles available to business executives, entrepreneurs and sales professionals with tips on how to deliver the perfect elevator pitch (read herehere and here for a few examples).

However, a nonprofit leader has the added complexity of having to articulate the unique qualities and value of his or her mission-driven organization to a wider range of constituents including foundations, corporate underwriters, advertisers and, of course, members of the audience that you serve.

In “The Art of the Elevator Pitch: 10 Great Tips,” Audrey Watters succinctly lays out the attributes of a successful elevator pitch for business professionals. Here’s my modified version for nonprofit news executives:

  • Brevity – While we all love to talk about how we got here, that’s not the purpose of the pitch. Keep your focus on what your organization is doing.
  • The Headline – In order to entice someone to want to dig in further, you must grab his or her attention (hint: it isn’t, “Do you know how many journalists have been laid off?”). Instead, focus on the need for your organization and how you are uniquely positioned to meet that need.
  • Pitch your organization, not yourself – You are running an organization with a mission bigger than yourself, make sure the person standing across the elevator understands this.
  • Don’t forget the “ask” – You want something. They know that. Be as articulate in what you want from someone as you are in articulating the need.
  • Don’t get bogged down in the details – We all have a tendency to pile on and share everything. People don’t have the attention span or the will to sift through multiple data points to understand what you are asking and whether it really is important to them.
  • Practice – If this is not natural to you, you are not alone. What separates good communicators from the rest is the apparent ease of delivery. Make sure you are well practiced in your pitch for all your potential types of targets.
  • Follow-up consistently – Once you’ve made a good impression, you’ll want to follow up with an email. Make sure the two communications are consistent.
  • Pivot – We’ll be talking a lot about this in the upcoming Community Journalism Executive Training program in October, but remember to evolve your thinking and your presentation as your organization matures.
  • Get your voice out there – There are lots of opportunities from INN and other like-minded organizations to share your knowledge and display your thought leadership. Individuals who receive your pitch will likely Google you and your organization. Make sure that they can find you and validate the newly-minted impression of you as a leader in your field.
  • Listen – Ultimately, the only way to know if you’re being successful in your pitch is to hear feedback. Having been delivered your pitch, your target individual is likely to say things that will help you.

For more info on elevator pitches:

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Terms & Conditions: Staying on Top of Your Legal Obligations Tue, 07 Aug 2012 21:31:31 +0000 We’ve all signed up for some new technology – something that is going to make things easier, faster, better, less expensive – and then when the message pops up, saying “I have read and accept the terms and conditions,” we click to accept without a second thought. No lawyers are involved, there are no hours spent pouring over dense legalese.

However, as executives and publishers we have an obligation, not only to read the legalese and the fine print, but to stay atop of it all. Every legally binding contract involves rights and obligations that must be met in order to avoid a significant risk to your organization, and even to you individually.

I’m not an attorney, and so this is not legal guidance, but I have included here a few pointers for keeping track of contracts.

1. Print Everything – For those of you trying to save the world one piece of paper at a time, this is hard advice to take. However, it’s vital to keep copies of all agreements in a file. Also back up a digital copy (like a PDF) of any executed contract.

2. Read carefully– When I worked at a large media organization, it was expected that I had read every contract and agreement cover to cover, and would not sign without legal review. And, in a perfect world, that’s good advice. However, not all of us have ready access to legal professionals in a timely manner. If you choose not to have a lawyer read a contract but instead review it yourself, pay particular attention to these kinds of sections which are common in media-centric contracts:

  • Definitions – These may seem obvious, but being clear on what is what up front is very important.
  • Contract clauses/obligations – These sections are specific to the types of deals that the contract covers. For example, advertising contracts have clauses that deal with inventory availability, ad placement and positioning; content licenses have clauses that deal with licenses, exclusivity, revenues and delivery costs.
  • Term & Termination – Understanding this section is critical. It spells out not only how long the agreement lasts, but how and when it can be renewed or cancelled.
  • Representations & Warranties – This section usually spells out the basis of the agreement stating that each party has the right to enter and what happens if there’s a problem.
  • Confidentiality – Understanding who can say what and how about the deal is critical to understand up front.
  • Governing law – This is critical in two areas: 1. Having to assert your rights or defend them in a state that you do not work or reside in can be costly, and 2. There are tremendous differences in state law as it relates to contracts. Some states are business friendly, others are not. Taking the time to research and understand this, particularly in non-standard contracts that you are entering into on behalf of your company, can be critical.

3. Calendar deadlines – Keeping track of when you enter into a contract, when you can cancel a contract and when it may renew (especially automatic renewals without written notification) is key in staying on top of your agreements. Too often, organizations enter into agreements and then down the road assume that the contract is no longer in force. But that’s not how it works, and it’s important to understand how long you and your partners are on the hook.

4. When in doubt, get a lawyer – Given all the hard work our organizations put into creating their content, seeking legal assistance to insure that you are safeguarding your organization is always a good idea. Having a lawyer on staff or on your board is best. For those who do not however, INN recommends the Digital Media Law Project at the Berkman Center for Internet & Society at Harvard when seeking Pro Bono or near-Pro Bono legal resources that specialize in media and news.

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