Articles

Martin Kotynek, Founding Director of the Media Forward Fund, stresses the need for sustainable business models in journalism to strengthen democracy, shares insights to their funding model focusing on user-centric independent media in Germany, Austria, and Switzerland, and highlights the growing role of pooled funds.

Why is it important for the Media Forward Fund to support journalism?

 We want to contribute to more quality journalism with strong business models. Right now, there is a big transformation crisis happening in the media, and we want to support the development of new business models that make journalism more sustainable in the long term. Through that, we want to strengthen democracies in our societies, which are also right now in a crisis.

Which outlets are eligible for funding, what are your criteria?

We have 24 selection criteria in five pillars. Number one is “transformation”: We fund media organisations that serve the common good and can both sustainably strengthen media’s role in society and create transformative benefits for the media sector. Other news organisations can learn from the experience of our grantees, to help the whole industry.

The second pillar is “user focus.” News products, which sound like a fantastic idea to the journalists who make it, but don’t really serve the needs of users, often fail. We want to make sure that there is a real user need, and that the information is trustworthy to the audience – also a necessity for commercial success.

We have “diversity” as our third pillar because there are underserved communities which have been widely neglected by journalism so far. We especially want to support media organisations that report for these communities. At best, these target groups are represented in the staff of the organisations.

Then we have “independence” as our fourth pillar. We do not see philanthropy as a business model for journalism. Media organisations need to be commercially independent from a single source of revenue to guarantee editorial independence. They will also be independent of us, we will never interfere in reporting.

And there is the fifth pillar, journalistic quality. We fund media organisations that base their work on recognised journalistic standards. At the heart of quality journalism are principles such as truthfulness, accuracy, objectivity, transparency, and independence. This is why we look at the organisation’s commitment to the principles of the press codex in its country of registration, the existence of established editorial standards, and institutionalised mechanisms to monitor compliance with those standards.

And there are geographical criteria, you have to have your headquarters in Germany, Austria, or Switzerland, and the majority of your revenues have to come from these three countries as well.

What do you think about the advantages of similar pooled funds?

 Pooled funds for journalism are becoming a global movement. There are MDIF’s Pluralis, IFPIM, and Civitates, with Press Forward in the US being the largest. More “cousins” of Press Forward are in the making right now; after Media Forward Fund began in Germany, Austria, and Switzerland, there are now similar initiatives in the UK, Canada, Brazil, and Australia. 

These philanthropic collaborations have many advantages. If several donors with a shared vision combine their funding, they have greater leverage to make change. Secondly, a pooled fund minimises the reputational risk for a funder. If you fund one single media organisation and it makes an error in reporting, or there is a mission drift, it might backfire to you. In a pooled fund it’s the fund’s responsibility; there’s a buffer. This is one of the reasons why we have a firewall between the funders and our independent jurors, who make all the funding decisions.

How do you provide support? Do you provide core or thematic funding? Do you also support outlets with training?

Smaller non-profit news organisations with up to 30 full time equivalent employees can get core funding. Everyone else – both for-profits and non-profits – can get project funding if there is at least a proof-of-concept and if the product or market fit can be shown. We want to see revenues first. We fund in the growth phase, because we have realised that there are several options for funding in the initial idea phase, but then there is a kind of “valley of death.” We want to bridge the idea phase and the phase when the media organisation is ready for an impact investment. Between these two phases, there is almost no money in the media market.

We support our grantees to grow their business model to show that it is sustainable. We bring in impact investors like Karma Capital Group, which is also a donor to Media Forward Fund. They get to know the grantees from the beginning, they see how they develop, how the teams work, and then it is much easier to make investment decisions for both sides. Journalists need to know that a potential investor doesn’t want to interfere in their reporting.

Our grantees also have access to our capacity building programme. They can get coaching, which is very individual, and they can take part in “deep dives” where we bring media organisations from all three countries together to share their experiences, work on their specific problems as a group, and learn from each other.

What is the most important lesson you have learned since the launch of the Fund?

 We learned that there is a lack of skill in media management, especially on the business side. We got 136 applications from the three countries in our first call, and we saw that there is really a need for upskilling in public value news organisations, especially on business issues. We want to contribute to that.

We are only half a year old, but up to this point, we thought that our capacity building and upskilling programme would be available only for our grantees.  But after we went through the applications, we realised that we have to play a role in upskilling potential grantees, too. So, we are going to extend our invitation to take part in our upskilling programme and in our “deep dives” to everyone who is potentially fundable.

What are the biggest challenges you have had to face so far?

We started with 4.5 million Euros, and half a year later we are at nine, but fundraising for journalism is quite complicated. Up until a few years ago, media was very profitable in general, and at least in our region, there was no need to make a philanthropic contribution to media organisations. But now, as the old print models are really under pressure, the transformation crisis in the media has accelerated. So we learned that first we need to explain what is going on in the media market right now, and how this affects our democracy, in order to bring additional donors into the fund. We have 18 partners so far; many of them haven’t funded journalism before.

What was the biggest success story?

To quote Maribel Pérez Wadsworth, President and CEO of Knight Foundation, which is a funder of Media Forward Fund: “Foundations need to act at the speed of news.” We have been trying to do this from the very beginning. A year ago, there were five foundations which initially came together, now we are 18. It took us only half a year from the initial idea to the launch of the Fund and of our first call, and only one year to welcome our first grantees. Philanthropy can act “at the speed of news,” if foundations collaborate with a shared vision.

Do you have any special advice for organisations that have not funded journalism yet but are thinking about doing so?

“Whatever your first funding topic is: Journalism should be your second” – that’s one of my favourite quotes from John Palfrey, President of John D. and Catherine T. MacArthur Foundation, which is an initiator of Media Forward Fund. Whatever you want to change in the world, you need journalism to explain it to the public, to criticise it if things go wrong, and to make sure there’s a common understanding of the facts, so that we can make informed decisions as a society.