Blog Insider: Why We Aren’t a Non-Profit [$2 Challenge]
Poynter reconvened us all (plus a few others) in 2010, and there was a huge shock waiting for us. WireTap Magazine had been defunded by the Tides Center, and Kristina was scrambling to keep her site afloat and locate new sources for revenue. Kristina is a fighter, and she was all about new opportunities when I saw her again. But I know how much that had to hurt.
Geoff’s story went quickly as well. When I asked him how the non-profit model worked out for him, he simply said, “It didn’t.” After struggling for a few months to break even, Geoff chucked the nonprofit model and refocused on hyperlocal news and politics in Chicago, as a supplemental section to another paper. The new for profit venture is doing well.
I realized then that non-profits had a lot of advantages, but there were a whole lot of disadvantages, particularly surrounding control. So we aren’t going to form as a non-profit for three main reasons:
1. Not enough flexibility for a changing industry
The publishing industry is currently freaking out at the decline of their advertising budgets, as advertisers want to pay less for more options and rights. Online advertising, which was undercut in its infancy by media companies who devalued the online space, simply will not be enough to support paying multiple writers anything close to a living wage. Even folks at the top of the heap, like Gawker media, are struggling against the shifting tide of the internet:
Fast-forward four years and the page view figures for Gawker Media’s network of sites have risen impressively: they attract some 17 million unique users a month in the United States and about 450 million page views. Ben reports that Gawker Media’s revenues are now “on the order of fifteen to twenty million dollars a year.” Being (like Denton) something of a skeptic, I will take the lower figure as the more accurate one and work from there. Now, in the world of online publishing, $15 million per annum isn’t exactly puny, but it isn’t exactly gonzo, either. Reuters blogger Felix Salmon says it is “lower than I would have expected,” given Gawker’s rapid growth, and the FT’s John Gapper says it “indicates the difficulty for media businesses in garnering significant revenues purely from online advertising.”
This is particularly frightening when looked at in context – the web is moving from an independent, decentralized space into a corporate controlled space. Wired explains why the web may be dying and quotes Russian investor Yuri Millner, explaining:
According to Compete, a Web analytics company, the top 10 Web sites accounted for 31 percent of US pageviews in 2001, 40 percent in 2006, and about 75 percent in 2010. “Big sucks the traffic out of small,” Milner says. “In theory you can have a few very successful individuals controlling hundreds of millions of people. You can become big fast, and that favors the domination of strong people.”
This is bad news for independent publishers and content creators, but not a death sentence. However, nonprofits have a lot of rules they want you to follow. And succeeding in digital space often means breaking some rules and doing things unconventionally. I do not want to tie Racialicious into a tax structure that requires so much administration that we can’t focus on our mission. I don’t want to pay people tiny amounts of money for huge amounts of work. I don’t want a board that has the power to hijack our mission. I need the freedom to take a look at where we are a business, and have the power to change course without being tied in red-tape.
And I won’t lie – it scared the hell out of me to see Kristina’s love, passion, and vision be snatched away from her by the whim of a few funders. My work with the PMC has taught me that serving the community, and what funders think is serving the community can be very different things. I would feel like I was putting Racialicious at risk if I were to turn over everything we had built in return for a lump infusion of cash. We’ve been broke this long – another year or two of growing slowly won’t kill us.
2. Endless cycle of asks
Initially, we weren’t going to do this $2 dollar challenge. Carmen once told me that she’d rather just have people pay for services and not deal with all the associated problems, and I agree. When you earn money, you can spend it as you will. When you are gifted money, there is a different dynamic at play.
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