Implosion at The Devil Strip Is an Opportunity for Action
Posting: Friday, October 22, 2021
The announcement October 15 to the staff of Akron’s “community owned magazine” The Devil Strip was stark and unexpected. Remaining board members said that there no longer were sufficient funds to operate, and that everyone was laid off as of Oct. 18 unless they could raise $75,000 in a GoFundMe to pay staff through the end of the year.
This came after two years of The Devil Strip being vaunted for its business model – it became a co-op in 2019, where community members could become “vested co-owners” if they had donated $330 or more and would be able to “vote on important issues” about the magazine. But the 94 “co-owners” weren’t told in advance of the publication’s financial woes – or that the majority of the board had resigned.
The news publication also drew attention from major funders. These included the John S. and James L. Knight Foundation, which gave a total of $225,000 as of the end of 2020, and the Lenfest Foundation on behalf of the Facebook Journalism Project, which gave $100,000 to grow the publication’s membership model.
At the ground level, this is tragic for the journalists and the community they served – and wish to continue to serve.
For the broader ecosystem of philanthropically funded local news, the lessons of The Devil Strip (and others) should snap everyone in that ecosystem to attention – and action.
While the history of philanthropically funded news is not novel – public radio newsrooms have a 50-year history of this, and even some of the once-newfangled nonprofit news organizations belonging to the Institute for Nonprofit News are in their second decade.
But funding local news is enjoying an acceleration in both nonprofit and for-profit newsrooms as more funders – national, community and family foundations, as well as individual givers – lean into the reality that having an informed community is as important as clean air, clean water, healthcare, education and other pillars that make our communities livable.
Consider that the Knight Foundation, Google News Initiative and the Facebook Journalism Project all, within the past three years, pledged $300 million each to support local news. (In disclosure, JFP received a two-year, $185,000 grant from the Knight Foundation to support its mission.) Earlier this week, the American Journalism Project announced it had received a $5 million gift from the Kathryn and James Murdoch Foundation to support local journalism. And associations such as the Local Media Association, along with its accompanying Local Media Foundation, have many laudable programs to support journalism funded by philanthropy.
And this has led to terrific work at the local level – thousands of news articles and multimedia that simply would not have existed without these funds. That should be celebrated and expanded. This is at the core of JFP’s mission – building and shepherding relationships between funders and local news organizations to increase the depth, diversity and sustainability of local news.
But if we are to take anything away from the unfolding news about The Devil Strip, it is that the journalism is but one of the considerations when evaluating the potential for success. Business practices, transparency and financial accountability matter.
Three weeks ago, I began reviewing and strengthening JFP’s Fiscal Sponsor agreements with our attorneys. While hindsight may make this seem prescient, it is, to me, simple hygiene. JFP was founded in 2019. We are still very much a startup. And the mantra of all startups is: Review, Iterate, Improve, Repeat.
We focused on shoring up four key areas of these agreements with news organizations:
Expectations of reporting: How often and in what specific format news organizations will report on key performance indicators such as number of stories, user engagement, social media activity, etc.
Control of grant funds: Maintaining control of funds to be spent according to the funder’s desired impact and, since JFP is not a passthrough organization, retaining unilateral power to redirect funds if the news organization is not fulfilling the purposes of the grant or project.
Inspection of records and activities: Reports of who is involved with the work at the news organization – and who is involved with the work at JFP, as well as granting JFP full access to all content produced through the grant beyond paywalls or membership gates.
Withholding and return of grant funds: JFP’s right to discontinue, withhold or modify funds to the news organization if it is not complying with conditions of the agreement, to comply with any new regulations and to protect the purposes of the grant.
In addition, I budget two hours per day to review work being done under JFP’s banner – and to treat myself to a daily dose of great journalism. This supports JFP’s role in keeping everyone honest – and not learning something devastating after the fact.
Lastly, radical Transparency, particularly with the JFP Board of Directors. We review JFP’s finances every month together, and JFP’s Finance Committee, chaired by our Treasurer Gary Strong, meets quarterly for deeper dives.
These areas are particularly important for providing comfort to funders that their money will be spent to achieve the impact they seek. They also provide comfort for the news organization in knowing exactly what these funds are for - and, as importantly, what they are NOT for.
They also stand as safeguards against what we’re learning happened at The Devil Strip. Vendors were not paid, sometimes for several months. The board was not fully aware of the organization’s financial peril until late last week. There now is the question of accountability to the “vested co-owners,” and whether any of these parties will come after The Devil Strip and its board for recompense.
Any one of these is a fiscal sponsor’s nightmare. And that’s why reviewing, iterating and improving the rigor that supports this work is so important.
If you’re a funder, newsroom, fiscal sponsor or otherwise involved in this important work, now is the time for internal strength training. Because the intent and spirit of the work won’t get done if the wheels come off the car.
About JFP: The mission of Journalism Funding Partners is to strengthen the depth, diversity and sustainability of local news by building and shepherding relationships between funders and local news organizations. JFP is a recognized nonprofit that acts as fiscal sponsor, allowing foundations and individual funders to contribute directly to local news, regardless of the news organization’s business model. JFP manages the funds feeding numerous news initiatives, including more than a dozen Climate reporters in the Southeast, an Equity Desk at The Sacramento Bee, an Education and Economic Mobility Desk in California’s Central Valley, the Investigative Fund of The Miami Herald and for Inclusivity and Investigative funds at the Associated Press.
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Media Contact: Rusty Coats, Executive Director | rusty@jfp-local.org | (813) 277-8959
