Despite an abundance of narratives pushing for green and just transitions, many fail to engage those capable of instigating real change. Laudes Foundation aims to disrupt this status quo by determining and disseminating compelling narratives grounded in solutions, tailored to spark meaningful action among key decision-makers across business, finance and government. Megan McGill, Senior Programme Manager explains how supporting journalism contributes to these goals, and what the most important lessons they have learned so far are.
Why did the Laudes Foundation start supporting media?
McGill: The Laudes Foundation is focused on inspiring and challenging industry to deliver a green, fair and inclusive transition. We apply system change principles in how we work, which means we also work at the level of mindset shift. In other words, if the stakeholders we are trying to influence don’t hold the right mindsets about what needs to change, why and how, then there is an intrinsic motivation entirely missing to move on the solutions we have at hand.
With this in mind, we designed a grant programme called “Narrative” of which journalism plays an important role. Journalism is a field with the reach to hold decision-makers accountable and highlight through evidence-based arguments where industry needs to and can move with more urgency and more ambition on a green, fair and inclusive transition. What this looks like in practice in our grant-making is helping newsrooms and staff (either directly or indirectly via capacity-building programmes) increase coverage of climate reporting across all beats of the newsroom – more evidence-based stories highlighting greenwashing or green-delay to hold laggards accountable, more solutions-driven stories to inspire other decision-makers to act, and more stories from workers and communities illustrating the intersection of climate and labour to show why industry action on climate must be just and how it can be. And media is an industry itself with investors and business leaders making decisions about media companies. So, in that respect, journalism is certainly an actor, not just a channel.
It was in early 2023 where we intentionally decided to increase our focus on this aspect of our Narrative grant programme. This was in some part due to what we saw as an increase in polarised reporting on climate, where progress is being undermined through mis- and disinformation, and also through headlines climate-related creating a sense of paralysis on what to do about the crisis. This means fact-based journalism is losing out, making it harder for progressive players to see that momentum is on their side or getting the laggards to feel like they need to start moving.
What is the most important lesson you have learned from this programme?
McGill: It is difficult to know if the news media grants are getting cut through with a broad swath of decision-makers. I think that the field of narrative shift relies significantly on metrics related to reach or even sometimes just a belief that the more a story is told, the more people who read it, it’s just going to change someone’s way of thinking. We can definitely agree that if something is not being talked about, then for sure it won’t be acted upon. But we are taking for granted that when something is talked about that it will get acted on.
I think my biggest learning is we’ve got a lot more work to do as a field, both the funders and the organisations that we fund to show the impact of narrative work. For sure with journalism, you can find cases where a reporting project has led to a policy change. That kind of pathway of impact is easy to explain, but I think the mindset shift, where you really start to get people to internalise a problem and to feel responsible for acting on it, which is what we need for wide scale action on the climate crisis, we haven’t started yet to systematically measure that kind of mindset shift. To get more effective at funding this kind of work, we have got to get better at measuring impact.
What kind of other challenges did you encounter?
McGill: The main challenge is that stories catalysed by Laudes-funded grants on just transition most often are not specific to the industries Laudes is trying to shift: built environment, finance, fashion and food. There are some, but not that many, and often they are not explaining what to do about just transitions. I think to motivate the private sector to move on just transition, we need more solutions-driven storytelling, because, in the absence of strong legislation to bring up the laggards, we will rely heavily on inspiration and a sense of a race to the top to move more progressive actors.
So, it has been a challenge to show that an increase in reporting on just transition more broadly will support the transition of industries Laudes is focused on.
What was the biggest success story? In general, how do you assess the success of your programs?
McGill: One of the things we can highlight as progress is that our partners have contributed to just transition entering mainstream news coverage. Evidence we are using is still focused on reach, but it’s certainly acting as a strong complement to the advocacy of other organisations on just transition.
Three years ago, when Laudes made its first grants in the space, just transition did not feature in mainstream news. I think it’s great progress to build, but again, there is still a push needed on measuring the real influence of this reporting on the mindsets of people with influence to act on the political, finance and business solutions to a just transition.
In which regions are you supporting media, and what kind of media do you work with?
McGill: We haven’t had a specific geographical scope in our grant making. We share with our partners the geographies of importance to Laudes Foundation, but it’s not a requirement to focus on these regions.
The media organisations that we work with and want to continue working with are nonprofit media organisations. Those who write and publish themselves, but we also work with organisations that are trying to enable the news industry to increase reporting on climate and just transitions like the Oxford Climate Journalism Network, Arena for Journalism in Europe and most recently, Solutions Journalism Network.
Do you have any special advice for organisations that have not funded journalism yet, but are thinking about doing so? How should they prepare for such a programme?
McGill: What we quickly learned is that it was smart to focus on news media rather than any media. Given we are trying to reach decision-makers more directly with compelling narratives on just transitions, news is a good place to start rather than trying to also work on, for example, social media, film and entertainment. Where we could create more clarity is whether we as a funder should also start to address the more structural issues of the news industry rather than simply building the capacity of the industry to report more on climate and just transition. Can we do the latter without doing the former?
So my advice would be to create a clear scope boundary for working in journalism, to learn, and then grow from there.
Robert Brestan, Editor-in-Chief of HlidaciPes.org explains why independent news organisations need donor funding, and shares insights about how grantees think about such projects.
Let’s not kid ourselves. Quality, responsible and independent journalism cannot be done without money. The fact that a journalist is well (i.e. adequately) paid also determines the degree of his or her self-confidence, assertiveness and control vis-à-vis the powerful and often the rich.
This is just to begin with, to clarify our positions. Money is simply crucial, and it is impossible not to see that the crisis of media funding is being addressed practically all over the world. Advertising is declining, readers have gotten used to not paying for content, they often make do with just “information” from social media, or they don’t really want to bother with news anymore.
But what to do about it then? In our project HlidaciPes.org, a Czech independent analytical-investigative website, we decided that we don’t want to go the way of the paywall. Although for some media it is a legitimate and functional way, we feel that writing for a narrow circle of subscribers only, persuading the already convinced and addressing only like-minded people is not the right journalistic approach.
Nevertheless, internet advertising generates only a small income for a medium of our size, just like direct support, such as voluntary donations, from readers, however much we appreciate it. That leaves only two relevant sources of income: the first is a generous and enlightened donor and philanthropist who ideally supports the medium selflessly and asks for nothing in return, let alone has any say in its content. Fortunately, such an endangered species still exists, even if it is on the verge of extinction. I am pleased to say that our project has one such supporter, covering about a third of our annual budget.
And then there are various grants. I dare to say that their importance is growing, and without them many media would have disappeared. I am therefore pleased to be able to describe and explain one thought here: many grants to support journalism actually make practical life in newsrooms quite complicated. It may sound strange, but it is true. Topics just for grants are invented, editorial offices guess whether the evaluator will be interested in this or that story, they try to fit within the boundaries of the grant, and often end up spending time on something they didn’t really want to write about.
And then there are all those beautiful, and certainly well-intentioned, ideas of grant providers that the best thing about journalism is sharing experiences, organising various conferences, talks, and cross-border cooperation – it sounds quite nice, but believe me, it has little to do with real journalism. It takes away human, mental, and financial capacities and time from real work. It may be fine, but it’s just something extra – after the basic needs have been met.
What journalists of independent media really and acutely need is simply money to operate. In our case, for example, that means only one thing – money dedicated to a regular income for our writers and contributors to do what they do best: come up with original topics and write about important issues.
So if the grants are really to be precisely targeted and to support journalists and journalism, they should be grants for the day-to-day journalistic work: researching topics, verifying information, meeting the actors of important events, investigating and then writing articles, interviews, reports, analyses, etc.
If you want to support journalism – and if you do, we appreciate it immensely – you can help it most by simplifying things along the lines of the following:
- We (the donors) see/we know/we’ve verified that you’re doing honest and responsible journalistic work, and you meet the other conditions.
- Tell us which topics you cover/want to cover, maybe even through international cooperation.
- If you meet our criteria, we will send you money – not for sandwiches and coffee, not for conferences, not for sharing experiences, but for work.
If all grants looked like this, life would be much better. But not just for journalists. Everyone who understands the importance of independent media in a democratic and free society would be better off.
Recognising the challenges faced by news media, Civitates offers core funding with flexibility for two years in an attempt to address the funding gap that many media outlets in Europe are grappling with. Prioritising organisational development and sustainability, Civitates’ support has been thus far deployed to media outlets across eight European countries.
Democracy is under attack in various European countries as the space for civil society diminishes, with governments imposing barriers, vilifying groups, and impeding access to crucial funding. The digital public sphere, essential for democracy, is threatened by disinformation and a decline in media trust, fuelled by technological changes.
Enter Civitates, a pooled fund comprising 18 foundations, aimed at beefing up the civil society sector. Initially concentrating on countries witnessing democratic erosion, the initiative swiftly recognised the main role of media capture in this phenomenon, which included frequent attacks against civic space, democracy and the rule of law.
Independent journalism faces a triple threat of diminishing public trust, receding media freedom, and financial instability due to disrupted business models. “Our overarching objective is a healthy, pluralistic, and democratic Europe,” says Eszter Szűcs, Senior Programme Manager at Civitates, adding that they focus on supporting independent public interest media, predominantly non-profit organisations.
Civitates does not solely focus on the state of democracy but considers an array of factors in its selection process. Among them, the availability and quality of funding in a country play an important role. Questions about the presence of local funding sources or reliance on international donors become key considerations in how Civitates shapes its support strategy.
Currently, Civitates supports 11 organisations across eight countries: Hungary, Italy, the Netherlands, Poland, Romania, Portugal, Slovenia, and Spain. Szűcs explains their approach as “thinking in cohorts,” emphasising their goal to strengthen connections between grantees, which allows organisations to learn from each other’s experiences, fostering a collaborative environment. Szűcs cites successful implementations of paywalls as an example of shared knowledge among grantees.
It is crucial, she added, that Civitates provides core funding, typically spanning two years, with a notable degree of flexibility. This addresses a significant gap in the funding landscape, as long-term core funding is rarely provided by donors, even though strong, sustainable independent public interest media need stability to flourish.
“It is very important to pay attention to fund the organisational development of the grantees,” Szűcs argues. While it may be easier for media outlets to fundraise for specific projects, this can divert their focus towards initiatives they may not necessarily want to pursue but that they will in any case undertake due to financial necessity.
News organisations require a robust structure and functional operations, elements often overlooked in the chase for project-specific funds. Civitates has identified this gap and tries to address it, a rather uphill battle as many journalists may lack expertise in organisational development.
“The core funding provided by Civitates (…) means that the organisations are not pressed to deliver certain stories within a predetermined time window or to follow predetermined financial strategies,” said Diogo Cardoso, journalist and member of the governing body at Divergente, a Civitates-funded organisation from Portugal. “This creates the base for both a truly free independent media and the room for experimenting in the field of alternative sources of revenue, with the financial sustainability in mind.”
Furthermore, funding from Civitates is not just financial aid; it comes bundled with capacity-building support and a focus on networking. This includes facilitating conference participation and exchanges among organisations funded as part of the programme. “We share a lot of the same challenges and doubts while consolidating our projects, so being able to benefit from others’ experience while analysing our own challenges helped us to make wiser decisions,” Cardoso said. “We benefited from visiting and hosting different organisations, and thus acquiring knowledge in specific areas that helped to cover gaps that we had in our organisation.”
Supporting business model development, editorial growth, audience engagement and outreach, and capacity to achieve impact on the public debates is expected, and hoped, to contribute to the long-term sustainability of news organisations, Szűcs argued.
“Before we won the grant from Civitates, Átlátszó Erdély was a small investigative journalism outlet run by journalists, with me, the editor-in-chief constantly juggling, and often overwhelmed by, editorial, admin, fundraising and outreach tasks,” explains Zoltán Sipos, chief editor and manager of Átlátszó Erdély, an investigative journalism project focusing on the Hungarian community in Romania. He adds: “The Civitates grant allowed us to hire an administrative assistant, and later to add a marketing person to the team. This freed up my schedule so I could focus more on the content, and also on the longer-term projects that are essential for our growth of Átlátszó Erdély. Thanks to the Civitates grant, Átlátszó Erdély became a bigger, and considerably more resilient organisation.”
“The Civitates core grant was a game-changer as it allowed to put in motion a long term plan that transformed our organisation from a small journalism project into one of the most awarded independent newsrooms in Europe, with presence at international journalism networks and multiple cross-border cooperation with other organisations,” Cardoso argued.
By providing funding to cover the needs of media outlets in those areas, Civitates hopes that it contributes to the sustainability of independent media, and thus, to the fabric of a thriving democratic Europe.
Over the course of three decades, USAID has distributed funds in more than 40 countries. It spent US $130 million in 2022 to strengthen independent media. Olesia Gardner, USAID’s Civil Society and Media Advisor discusses challenges and partnerships, and highlights success stories, emphasising the need for dedication and local engagement in media development, as well as the vital role of media pluralism in upholding democratic values.
Why is it important for USAID to support the media?
Gardner: Media pluralism serves as a crucial tool for maintaining a robust media landscape and upholding democratic values. For over three decades, USAID has helped to fuel the growth of an independent media ecosystem across Europe and Eurasia. However, today the sector is facing unprecedented challenges to both a free press and to broader democratic progress: financial insecurity, technological change, eroding public trust, and threats from powerful political and business interests.
USAID support strengthens the competitiveness, credibility, capacity, and innovation of content creators, and equips journalists and media outlets, including investigative journalists, with the tools they need to confront these challenges. USAID programmes also foster demand for high-quality news and information and improve critical thinking skills among news consumers.
What kind of news organisations are eligible for support? In which countries does USAID fund media?
Gardner: USAID has been one of the world’s leading supporters of independent media for over three decades in over 40 countries. In the 2022 financial year alone, USAID spent approximately US$130 million to support media and the free flow of information. USAID’s comprehensive approach to supporting media systems globally focuses on supporting both the supply side, so content producers and distributors, and the demand side, audiences and the legal enabling environment.
Our programmes help support journalists to develop and grow their audiences, establish more sustainable sources of revenue, leverage digital tools and technology to broaden their audiences and strengthen engagement with them, and protect themselves from increasing digital, legal, psycho-social, and physical threats to their lives and livelihoods. USAID’s support seeks to strengthen journalistic professionalism, establish media management skills, and promote free and independent media. Among our partners are news publishers, investigative journalists, and media organisations.
Do you implement the programmes yourself, or do you involve other organisations? What is the advantage of your approach?
Gardner: At USAID, we achieve our mission by partnering with individuals and organisations around the world. Working together, we find innovative and cost-effective solutions to pressing global challenges. We have been experimenting and encouraging partnerships as these bring together various expertise, personalities, and resources to achieve the most impact. For example, the Central Europe Media programme is a partnership between Zinc Network and IREX. The Media Trends conference in Budapest [in December 2023] was a success due to partnership with the Center for Sustainable Media. In Bulgaria, we have organised two workshops for journalists in partnership with the Association of European Journalists (AEJ).
Thinking of media support programmes in Europe, what are the biggest challenges you have to face?
Gardner: The economic sustainability of media outlets continues to be a major challenge. The question arises how traditional and emerging media can maintain relevance and financial viability in this ever-evolving landscape where entertainment and information consumption patterns are rapidly changing. We operate in an environment where holding the powerful to account is increasingly difficult, and where state actors routinely interfere with the advertising market, starving independent media to favour those willing to toe the government line.
Through our media support programmes we aim to create space and opportunities for news organisations to access different experiences, tools and thinking. In Central Europe, for example, we conducted an audience research, which was presented broadly to independent media in five countries. The feedback we received showed that the research helped better understand the audiences and also the importance of data-driven technologies in reaching outside the audience bubble. The overwhelming response to the research also showed a big appetite among the journalism community to introduce surveys in their work.
What was the biggest success story among your projects?
Gardner: USAID has lots of success stories to share, but I will focus on the ones achieved by the Balkan Media Assistance programme (BMAP). USAID launched the first iteration of BMAP in September 2017 with the objective of enhancing the professionalism and sustainability of media in the Balkan region by working with renowned and promising news media outlets to improve their digital content quality, business processes, and collaboration. The success of BMAP, which closed in July 2022, led to the launch of a second iteration of the programme, entitled Balkan Media Assistance Programme to Foster Organisation Readiness While Advancing Resilient Development (BMAP Forward), which unfolded in February 2022.
BMAP was designed and implemented by 10 media outlets spanning Bosnia and Herzegovina, Kosovo, Montenegro, North Macedonia, and Serbia. The successes of the BMAP programmes have been multi-faceted and far-reaching. All of its key partners have seen marked increases in their programmatic advertising revenue, significantly boosting their financial sustainability. For example, Bosnia-based media outlet Oslobođenje saw an increase in monthly programmatic advertising revenue of 206 percent, going from $2,770 at the start of the programme to $5,680 by the end of the programme. Meanwhile, Vijesti, an outlet based in Montenegro, increased its advertising revenue by 1,300 percent going from US$1,100 in revenue per month to US$10,200. Media partners participating in BMAP also emerged with a more robust network and stronger relations with other media outlets.
Do you have any special advice for organisations that have not funded journalism yet, but are thinking about doing so?
Gardner: Media development is a fascinating area, but it also requires dedication, patience and financial commitment. Sound analysis of the media and its environment in a country is needed before planning a new media development intervention to map the media outlets and the operational environment, donors and what type of assistance they provide, to identify the gaps in technical assistance and funding.
Our experience has proven that local consultants are in most demand […] as they already understand the local context, speak the language, and most importantly because of trust. Finally, the media development programmes tend to be the most successful when guided by the principles of locally-led development where partners are involved in defining their own vision for success; whereas the donors remain flexible and attentive to the needs for the partners.
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.