Opinion

Felix Salmon

How to support investigative journalism

By Felix Salmon
April 19, 2011

Paul Steiger is rightly proud of his latest Pulitzer — the second for ProPublica in as many years. He’s right, too, that such things don’t come cheap:

One last point: to do this, it takes money. ProPublica is a non-profit, and contributions are tax deductible. We had more than 1300 donors last year and almost 500 so far this year. The median donation is $50, but whatever you can give will be greatly appreciated, and will truly help us make a difference. I invite you to celebrate with us by making a contribution by clicking here.

Sadly, individual donations — certainly not individual donations of $50 — won’t make a difference. According to ProPublica’s Form 990, Paul Steiger and his managing editor, Stephen Engelberg, made $959,811 between them in 2009 — $585,117 for Steiger and $374,694 for Engelberg. Senior reporter Dafna Linzer made $225,876. The total wage bill for 47 people for the year came to $5,267,678, or an average of $112,000 per person, not including things like pension contributions, other benefits, freelance costs, and payroll taxes.

It’s entirely within ProPublica’s rights to pay such salaries, but Steiger’s 1,300 donors, each pitching in $50, will generate a total of $65,000 — enough to pay Steiger’s wages for almost six weeks. If they all doubled their donation, he’d raise $130,000 — enough to pay ProPublica’s total wage bill for just over one week.

The fact is that ProPublica is funded, generously, by Herb and Marion Sandler; they, and a handful of other big-name funders, are the only donors who actually make a difference. According to ProPublica’s 2010 annual report, online donations for $86,000 were rather less than 1% of ProPublica’s total fundraising haul of $9,832,000 — the bulk of which came from board members. (For which, read the Sandlers.) ProPublica is not reliant on donations from the public, and if you’re prioritizing your charitable contributions, it makes sense to target your money at organizations which really do rely on such things.

In principle, I like the idea of a non-profit news organization which is funded by its readers. But ProPublica is not that organization. If you want to make a difference by funding investigative journalism, you’ll get more bang for your buck by giving money to the Investigative Fund at the Nation Institute, which doesn’t have a highly-paid permanent staff. Instead, it gives out grants of between $500 and $10,000 to reporters working on important stories like Kai Wright’s recent examination of the payday lending industry.

As ever, giving anywhere is better than giving nowhere — so if you are impressed by the Pulitzer-winning work of Jesse Eisinger and Jake Bernstein and want to support it with a donation to ProPublica, that will do some amount of good and no harm whatsoever. But if you’re going to donate that money to the cause of investigative journalism, you might want to look at other places too. Which might need it more than ProPublica does.

Comments
5 comments so far | RSS Comments RSS

I’ve got to beg to differ here a little. The business model of a nonprofit like ProPublica, I almost guarantee, will depend on them growing their online donations quickly and sustaining more and more of their operations from that avenue.

I worked with an organization that Herb and Marion Sandler were thinking about supporting, and the Sandlers, in my experience, do not write blank checks, especially if they are on the board. They will be pushing hard for ProPublica to figure out a model that won’t always depend on a handful of rich people funding what they see as a vital project. I would not be surprised if their donations were matching donations, although I don’t know the particulars. And I don’t doubt that it makes the people who run it nervous to depend too heavily on a small number of people.

In any nonprofit, it is the early donors and the continuing donors who make up the lifeblood, and this early in their existence, I think that ProPublica rightly puts a huge emphasis on acquiring those donors, who will probably continue giving, and eventually give more. So it may not make a difference this moment, for this year, but it really will make a difference in the long term as ProPublica builds its donor base.

One last point – if ProPublica were to continually fall down on online donations, and they weren’t increasing, the board and founders will eventually get tired, and begin lowering their donations and lowering their involvement. Its happened to many nonprofits.

Posted by mbg0312 | Report as abusive
 

First quick point: you confuse “median” with “average.” You can’t multiply the median gift with the number of donors and get the total amount given, that only works with the statistic of the average amount. Steiger rightfully uses the statistic of the median rather than the average because, as you point out, there are a few very large gifts at one end of the spectrum that would skew that number.

Bigger point: you’re analysis gets to the question of “why have all these little gifts (I’m going to use the phrase “annual fund” to capture this segment of donors). You then answer the question from a perspective of meeting this year’s financial revenue needs, and decide the answer is: it’s not worth it. This is true, from that focused perspective. However, having annual funds is net-positive when viewed through two other lenses: the FUTURE year’s financial revenue needs, and the less quantifiable need of having a strong “community.”

First argument: eventually, an org’s lead donors will step down (as mbg0312 points out). Preparing for large donors to take their place is a multi-year, even multi-decade process. You start with a huge number of small donors, some of whom will have the potential to give big gifts in the future. It’s your future revenue stream.

However, this argument only appeals to an organization’s fiscal manager, not to any one donor. No one gives because down the road they might be able to give more. Instead each person gives for a broader, unmeasurable effect of being part of something, be it “community” or “passion” or something similarly un-quantifiable. It’s the same reason why you give a birthday gift: to make a feel-good connection, not because it’s financially appropriate.

So I’d say readers are not so much “funding” their news source, to use your word, as doing the broader work of “supporting” (in the same way that, say, a friend doesn’t “fund” a party but instead “hosts” it – there’s something larger there than the mere outlay of cash.) This is why Steiger rightfully uses the phrase “celebrate our success” – he is bringing donors into a community, not simply tapping their financial ability.

While a nonprofit has to keep it’s eye on the financial bottom line, the act of giving encompasses far more than mere quantifiable data.

Posted by BrigidS | Report as abusive
 

Are these the Sandlers of Golden West Financial Corporation and World Savings Bank fame?

Freedom of the press… for anybody that owns one, right?

Posted by upstater | Report as abusive
 

I’m wondering to what degree ProPublica covers its employees travel expenses, and other costs of investigating a story? I can imagine that letting employees keep expenses on their own tab may make it easier to keep what is being investigated under wraps until a story is ready to go — if reimbursed, the expenses would end up in ProPublica’s records (and in particular their tax filings) in a way that might spill the beans.

I very much like ProPublica, but I have trouble seeing how salaries into the mid six figures can be justified if there aren’t even extra expenses associated with working for them. I guess there is a certain degree of “hazard pay” involved, but still.

Posted by Auros | Report as abusive
 

How about This American Life? They also do exceptional investigative work (sometimes in co-operation with ProPublica) and I’m under the impression they rely heavily on public support.

Posted by MarkPalko | Report as abusive
 

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