Also by: Jonathan Peters
Crowdfunding primer
We practice journalism in changing times. In 2008, David Cohn received a grant from the Knight News Challenge to build Spot.Us, a site to pioneer “communityfunded reporting,” or the crowdfunding of journalism. We define crowdfunding as “the collective cooperation, attention and trust of people who network and pool their money and resources, usually via the Internet, to support efforts initiated by other people or organizations.” Then we define crowdsourcing as “the act of delegating tasks, traditionally performed by an employee or contractor, to an undefined, large group of people (the crowd), through an open call.” Basically, crowdfunding is a type of crowdsourcing.
The crowdsourced task in crowdfunding is to gather money for a specific project. Generally, this is done by using online social networks, like Twitter and Facebook, and the people who donate can participate to an extent in decisions related to the project. Crowdfunding has spread to music, film, software and even brewing with projects such as IndieGoGo, Blender Foundation and BeerBankroll.
Spot.Us is an online platform to crowdfund journalism. Freelancers pitch their story ideas and community members donate to support specific stories. “In this sense, the legitimacy [of] a story on Spot.Us is based on pure market success,”5 says researcher Tanja Aitamurto. This is different from donating to public media, such as NPR and PBS, because donors can pick the content, not just support the overall organization. “In the era of the unraveling of traditional business models in journalism,” says Aitamurto, it provides an alternative revenue source, a new opportunity for reporters and editors to distribute the cost of journalism across many different people.
Spot.Us is a success as an experiment in new revenue sources to finance journalism. Going forward, two issues are worth developing. How do we turn the open-source experiment into a sustainable business? Secondly, how do we evangelize the concept to the larger journalism industry? Importantly, the concept of crowdfunding is larger than any single organization. In the first Web revolution of the late ‘90's, companies like PayPal, eBay and Amazon revolutionized how we purchased items online. In Web 2.0 we are seeing social principles applied to our purchasing habits, creating companies like Groupon and Kickstarter. Spot.Us is an application of those principles to journalism.
Answering those two questions motivated us to create this handbook.
We focus on the workings of Spot.Us and hope this case study will help others tackle freelance reporting projects or give news organizations ideas about new revenue streams to support important investigations.
To the best of our knowledge, Spot.Us is the only successful venture that has used crowdfunding to support local civic reporting. And we believe it can spread throughout the news industry. Consider this: the gift economy (philantrhopy) in the United States is roughly 300 billion dollars every year, with 80 percent of that coming from individuals. If journalism can tap one percent of that, it would add $2.4 billion dollars to the news industry. We do not want to see another opportunity missed to garner new revenues because of ignorance or fear.
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