Miguel Castro, head of Global Media Partnerships at the Bill & Melinda Gates Foundation, shares his thoughts about partnering with large, mainstream media organisations, what the foundation looks for in their partners, the biggest challenges when working with such outlets, and how they measure the success of their projects.
The Gates Foundation is one of the largest spenders on media partnerships among philanthropies. Why is this field so important for the Foundation?
Castro: I’m not really sure whether the foundation is among the largest philanthropic investors in media anymore, the data is always very difficult to crack. We are definitely a large funder, no question about it, but in the last few years there has been an increased investment by philanthropic organisations that have not been traditionally investing in the media space, and there is very little tracking about all of that. But we do have a significant portfolio.
Ever since 2011, when the Foundation decided to centralise its work with media organisations through grantmaking in this unit called the Global Media Partnerships, there have been a couple of elements that substantiate this strategy. One of them has to do with helping media organisations who care about global health, development, and gender equality.
We feel that, in a sense, there has been a market failure of really high quality journalism on these issues. It is assumed that it does not bring in large audiences, although these assumptions have been challenged over the years, and we felt, and we still feel that the overall share of journalism that touches the social issues that are important for underserved populations is very small. So we have always wanted to address that market failure, by subsidising good quality journalism with organisations that share the same values and objectives.
While many donors focus on supporting outlets in financial need, the Gates Foundation forged partnerships also with mainstream media organisations, such as The Guardian, Der Spiegel, El Pais, Financial Times, or Al Jazeera, among others. What is the idea behind these partnerships?
Castro: Whether the organisations we work with are for profit, or not for profit – that’s not the key question. The media organisations we work with should be mission driven. Their mission cannot only be financial return. Of course, that is a legitimate quest by any media organisation, and we want them to succeed and be sustainable, but it is not our priority.
We work with organisations that are driven by a mission that has to do with the role that we believe journalism plays in societies in being a service to society by informing its citizens. How is this impacting the development of communities across the world? That’s what matters to us. And we work with the most effective partners that we find, and often they are commercial organisations that have larger audiences. They’re more sophisticated in their approaches, have a greater understanding of engagement strategies, care about impact in the same way as we do. We have done a significant amount of partnerships with mission driven commercial organisations and in many cases, the very first relationship that they ever had with philanthropy organisations was with us.
Philanthropy is not the solution for the sustainability problems of media organisations. The media sector continues to struggle financially. We, philanthropies, at our best are at the forefront of the quests for social justice, even if it is just defining conversations, informing political debates. It doesn’t matter too much what type of organisation it is, for profit, or not for profit, if there is a mission alignment on what the role of journalism is.
What is the scope of these grants for mainstream media: do they focus on certain projects, reporting about certain topics, skill-building, maybe organisational development?
Castro: We call these relationships partnerships for a reason. They are never one thing only. There is this debate about core funding versus project based support, but I think it’s never one thing or the other. You can do core support and be project led, by providing a great deal of support for the necessary infrastructure. It is more about the design of the grants and how the funding is utilized.
So even though we do have grants and relationships that focus on sustainable development goals, or global health security, or gender equality, within that, there is always support for organizational development, there is always capacity building. Many grants pay for improving the capacity of an organization to understand their impact and their engagement and their audience, sometimes even developing products. On a few occasions we have actually provided catalytic start-up funding for the creation of an organisation.
It is always a result of smart design, and it is an important factor that we have long term commitments to our partners. Since 2018. all our grants are for three years or longer. In three years, even if it is project based funding, there is a lot of organizational development that happens.
What was the biggest success story among these partnerships with mainstream media, and in general, how do you deem a project successful?
Castro: There are a lot of success stories, I could go in many directions. In terms of impact, we have a pretty high ratio of satisfaction and success, because we invest a lot of time in due diligence at the beginning of the conversation to get to know our partners and for our partners to get to know us. Then the grantees have the capacity to do what they do best: journalism.
We track impact jointly with our grantees. We have done a lot of work with a lot of people and a lot of grantees, and have piloted a lot of things to get to a pretty solid framework to understand the performance of our partners and for the partners to understand how their journalism is achieving what they want to or not. Among other tools, we work with the American Press Institute, which has a tool called Metrics for News, which we subsidise for grantees for their media analytics.
We have regular conversations about how their journalism is doing, and its impact. And we learn from them how it is impacting their editorial approaches. I think impact should be an important question for every journalism organisation: understanding how your audiences consume your content, what they do with the knowledge that they acquire seems to me quite a fundamental question. So we have helped media organisations to do that in the most sophisticated way possible for quite a long time. And at the same time, it helped us to understand if we were using our resources in the most effective way.
If you had to mention one project as a flagship one, what would it be?
Castro: I was very happy with an unusual cooperation. In 2019, The Guardian, Spiegel, El Pais and Le Monde got together for a year-long series to examine the lives of refugees arriving to Western Europe. Migration was a really hard topic, and they came together with a project that included longform, multimedia, in-depth, amazing journalism from all four of them called The New Arrivals.
They shared resources, ideas, each of them produced a different output to their audiences in their own language. That was amazing to see. We facilitated it by providing funding, because at that time there was a lot of very domestically focused, highly political coverage and very little storytelling about what is happening to the individuals.
It was amazing for two reasons: for the quality of the journalism, for the storytelling, but also because these organizations demonstrated that they could work together. I think there should be a lot more like this, and it’s a shame that it’s 2024 and we do not see tens of projects like that.
What was the biggest challenge you encountered when working with these large organizations?
Castro: These organizations never had philanthropies on their radar. In Western Europe, and in the US. philanthropies are highly regulated. You are accountable to a strong regulatory environment for your tax status, etc. You develop these partnerships with editorial teams. But then it comes to a point when someone should develop a proposal, and it stops being an editorial question. Someone in the building has to do that, to develop the administrative and accounting infrastructure. It is a struggle for media organizations because they are not used to it. So the first grant is always very hard. It is a bit of a cultural shift.
Also, if you are a journalist, you want to be fully, absolutely independent. There is always a healthy skepticism about funders. But as these partnerships evolve, you build trust, and then it becomes a normal and actually enriching relationship for everyone involved.
Do you have any advice for other funders?
Castro: One of the reasons why Journalism Funders Forum exists is to help foundations that are interested in working with journalism to do it in the most effective way. It can be incredibly effective. Stories are a commodity for both journalism and social organisations. Trust is a common currency. We want audiences and everyone to trust what we do, and we want to earn that trust by doing the right thing.
There are rules of the game, there are approaches that work, and approaches that work less. Journalism organizations that are new to philanthropy have to make an effort to understand what is at stake. And at the same time, philanthropic organisations that have been doing funding in other spaces for decades need to understand what is unique and what is different, and what are the rules of the game when working with media organizations. Ours are creative and editorial independence, the integrity of the journalism produced, and transparency from all parts involved.
And when that happens, it is beautiful. When journalism and philanthropies or civil society organisations with advocacy mandates come together, respecting the rules of the game of advocacy and philanthropy and policy and journalism, this is when everyone is most impactful and ultimately societies will benefit. So it is an invitation to organisations and the philanthropy space to consider journalism funding in the most mature and sophisticated way possible.
Patrice Schneider, the Chief Strategy Officer of the Media Development Investment Fund (MDIF), shares the lessons learned in the first two years of Pluralis, an impact investment vehicle for news companies led by MDIF. He also discusses how the investment has changed media organisations and offers advice to other funders.
In its first two years, Pluralis invested in Gremi Media, which publishes Rzeczpospolita in Poland, the publishing house Petit Press, publisher of SME in Slovakia, and the Croatian news platform Telegram. Do the three countries share any common challenges despite their different media landscapes?
Schneider: The media landscape in all these countries is indeed quite different. The similarity goes back to the challenge that Pluralis tries to address, which is media plurality. The one thing that unifies these three countries is that independent media companies are being purchased by actors that do not necessarily have an intention of providing more independent media, but rather controlling the narrative.
This is why Pluralis was created: for addressing this challenge. But we knew from the beginning that it is never a one size fits all approach, you cannot just do one transaction with Petit Press and SME and replicate it for Rzeczpospolita or for Telegram in Croatia. After doing this [work] for 28 years at MDIF, we knew there would be different things, but I think what really assembles these three markets is the problem of media plurality.
How do you cope with this challenge?
Schneider: In the world we now live in, it has become an opportunity for ill-intentioned people to buy media companies and turn the narrative in favor of their own interests or a political agenda that satisfies the new investors. So, the challenges were generally the same: finding an independent organization, assessing their capital and development needs, adjusting the capital to match their development plan, and so on.
So the modus operandi is pretty much the same as it was for MDIF for 28 years. The only difference was that we were taking positions in these companies to be able to maintain media plurality, but we were also making sure that there would be no interference.
How do we cope with this? We have the ethics to say that we do not intervene. I mean we do play a role in terms of the development of the company because we do not just do it for press freedom. The company has to survive. And that means that we have to get involved in the business development, helping them where we can. And that is very different whether you are Rzeczpospolita, SME or Telegram. They have totally different needs.
The investment in Croatia is a relatively new one, but the other two took place two years ago. How did your investments change those two organizations?
Schneider: In the case of SME, they had a majority ownership from an investment group called Penta Holding, which was involved in too many things in Slovakia, and they were starting to intervene in content, which is for us a red line. If you are an investor, you do not do this.
The moment when Pluralis bought the shares of Penta Holding, that pressure stopped immediately. I regularly see [chief editor] Beata Balogova from SME being quoted as saying that every three months she is asked about the stories she is proud of. Before that she was being asked about why they covered this story, or why they did not cover that one, and their editorial choices [were] challenged. Now she is only asked about which stories she is proud of. We talk with the business people. Business-wise, Petit Presse is a very sophisticated organization, a profitable organization. It is extraordinarily well run.
Rzeczpospolita, the number one conservative business newspaper in Poland, was going to be potentially purchased by Orlen, the state-owned oil company. That was dangerous in itself. But we also saw that even if they had made progress, they had work to be done on digital subscriptions. If you are a business newspaper in a country the size of Poland, […] they should have been the country’s leader in terms of digital subscription for the information they provide.
At Pluralis we put the capital in to preserve media plurality, but then we bring experts to help them [the organizations we invest in]. So Pluralis has been supplying massive training to Rzeczpospolita. Not on press freedom, not on editorial issues, but on how to increase digital subscriptions. And the first numbers are looking really good. Instead of sending a journalist from Western Europe to talk about press freedom, we sent [them] people from some reputable companies in Europe who have been leaders in digital subscriptions for 15 years, who know exactly how to do it, which means that, in effect, the business manager who has been doing this becomes the press freedom hero. Increasing digital subscriptions makes them more profitable. If they are more profitable, they will have more impact.
The second thing is that Pluralis managed, I think, to maintain pluralist views. Our role is to make sure that people hear different voices and then they can make their decisions.
If there was one lesson that could be considered the most important one learned from investing in these three countries and these three organizations, what would that be?
Schneider: I think that the main lesson is that Pluralis’ hypotheses work, meaning that there is a need for a new type of capital provider for independent media. Linked to that lesson is the fact that there is appetite for a new type of capital provider. And that is critical because you are asking me about the lesson [learned] from investing [in these organizations]. So, it is not solely about investing in them, but it has taught us that there is a need for a new type of capital provider that aligns with the social value of independent media. There is an appetite for patient capital to fulfill this role of capital provider.
What do you consider Pluralis’ biggest success in its first two years?
Schneider: I think what I mentioned is also our biggest success: finding patient capital that believes in the value of independent media. By now we have raised €50 million. A lot of people thought we would not raise [the targeted] €100 million, but now we are halfway ahead of time. I think there is capital and there are places to invest, and then there is an impact on society. What do you want more?
I mean, really, that is for us the biggest success. But I think I would just tone this down by saying that the real heroes here are not MDIF, it is not Pluralis, it is not even the business people in these companies. It is really the journalists who are doing that work. And all we do is to enable them to do it in the right conditions.
Knowing what you know today, is there anything that you would do differently related to the Pluralis’ investments?
Schneider: On the investment side, not really. The only thing that we would have done differently is the pipeline, to better understand that we are not an investment fund, we are a solution. An investment fund works in a way where you have money coming in and then you ensure that you have money going out. This also means that you raise capital and then already know where you are going to invest it, and it has to be driven by the investors. In the case of Pluralis, we have capital, but we are not going to invest that money anywhere. It has to be under the right conditions of media capture, a media plurality situation. They have to be profitable and so forth.
So the one thing we could have done differently is to go out there much quicker, saying that we exist, and we are here to bring you the right capital for your needs. Hungary is a beautiful example. I wish we had done this there earlier.
Based on the experience gained in the past two years, is there any advice that you would like to share with funders who consider funding media in the region?
Schneider: Pluralis has now raised €50 million [available] for independent media and media plurality. There are many types of funders in that €50 million, but there are some, like foundations, that provided a grant in the capital structure, €5 million out of the €50 [million], and they do not expect the money back. It helps you de-risk the other €45 million, but I think the problem that Pluralis and other organizations are trying to solve is that we need to reach out to other sectors, like banks. We have the Erste Stiftung and GLS Bank, but we also need to reach out to high net worth individuals, people who have never invested in independent media. They don’t know about independent media, but you have to approach them with a product which looks risk-adjusted, and safe.
I would tell the funders: consider the word “leverage”. It is not a bad word in the financial world. I think we need to bring it to the impact investment world. Five million [euros] in grants allows you to get €45 million more for the ecosystem of independent media in emerging democracies. We need grants in many places, but also a different way of using capital, which could be either an investment, or a grant [used] simply to de-risk. I think that one, grants aimed to de-risk, is a big call for action because we are going to need more money.