The following is a conversation between Richard Tofel, President of ProPublica, and Denver Frederick, Host of The Business of Giving on AM 970 The Answer in New York City.
Denver: There have been few industries that have been disrupted more in recent years than have newspapers and magazines. And as they fight to survive by cutting costs, one of the areas that many have jettisoned has been investigative reporting. And that’s not good for any of us. So what was needed was a new business model — a nonprofit one — to help carry on this work. And this is how ProPublica came into existence back in 2007. And with us this evening is the president of ProPublica, Richard Tofel.
Good evening, Dick, and welcome to The Business of Giving!
Dick: Denver, thank you so much for having me.
Denver: Tell us about ProPublica and the mission and goals of the organization.
Dick: ProPublica, as you suggested, is a nonprofit investigative journalism newsroom. We print, publish everything on our own website at propublica.org but we also work with leading journalism organizations in partnership. And as you say, we’ve been publishing now for a little bit more than nine years. We focus on investigative journalism in the hopes that it is a critical part of democratic governance in our society, revealing to people things that people in power don’t want them to know… that we hope that will make them more effective citizens.
Denver: Well, you have had a really sensational first decade of existence. How has your audience grown? And how has the organization been recognized for some of its outstanding work?
Dick: We’ve been very fortunate. We’re now reaching directly on our site somewhere between two– we’re recording somewhere between– two and three million people visiting us in an average month.
Denver: That’s impressive.
Dick: Between four and five million pages of our material is read on our own site. And then, of course, there’s the material being read when the stories are published by our partners. We’ve had 149 journalistic partners, pretty much every leading news organization in the country. And in terms of recognition, thank you for asking, we’ve been fortunate enough to win four Pulitzer prizes… I think literally, half of the Pulitzer prizes awarded to digital journalism organizations so far.
Denver: Congratulations. Well, since the presidential campaign, Dick, last year, I know more people dialed in, and I’m following the news more than I ever have in my life. What has the impact of the Trump presidency been on your operations?
Dick: It’s been very, very significant. Traffic is up 40%, 50%, 60% one or two months… over 70% this year over the previous year. Funding has been up enormously. So, without drowning people in numbers, we had 3,400 donors in total in 2015. We had 26,000 in 2016. And so far this year, although most of that kind of activity occurs, or much of it occurs, at the end of the year…
Dick: So far, in 2017, we’ve had more than 21,000 donors.
Denver: That’s fantastic. Let’s talk about trusting the media a little bit. Something that the president talks a lot about… actually, not trusting the media. It’s at an all-time low, but I would say that trust for almost all of our institutions are at an all-time low. You have said that many people very well may not trust the media, but they believe it. Share with us what you mean by that.
Dick: So, here’s what I mean about that. I certainly wouldn’t dispute the surveys about low trust in the media, and as you say, I think that extends across almost all of our institutions. My favorite example of this is the president’s approval ratings. The president’s approval ratings, as folks probably know, are the worst of any new president in our history. Already after just 200 days, the president’s low point in approval is lower than 7 of his 10 predecessors ever were across 42 years between them… of occupying the presidency.
So the question is: where are they getting the basis of the conclusion? So many people, a very substantial majority of the American people don’t approve of the president’s performance in office. And I think the answer is: they’re getting it from what’s being reported in the news media. I think frankly, that’s why the president is so frustrated. He is frustrated because he’s not getting a lot done. He’s not delivering on his promises, and the press is telling the American people that that is the case.
Denver: So, whereas people may say, “I don’t trust the media,” somehow it is having an impact in the responses to how is the president doing.
Dick: Yeah. And I think more generally, it is not obviously just about the president. There’s a little bit of a phenomenon here that is analogous to the phenomenon about the congress. You know, the old saw about the congress is that nobody likes the congress. I think the approval rating of the congress as a whole is literally about 10%. . .
Denver: That’s right.
Dick: It’s well below the media, but most people actually approve of their own member of congress.
Denver: Funny how that works.
Dick: Yeah. And the overwhelming majority of members of Congress are re-elected when they stand for re-election. So, there’s a little bit of a similar thing going on where people, I think, don’t trust the media in general, but do trust implicitly, or even explicitly, the sources they choose to get their news from themselves.
Denver: Right. I touched a little bit about this in the opening, but give us a fuller explanation as to why commercial outlet journals have cut back so dramatically on investigative reporting.
Dick: The shortest answer is because it’s very expensive. And it is very expensive, I would guess, for two, three reasons. First; it can take a great deal of time to do well. Second: a certain amount of it is like wildcatting for oil, and there are a bunch of dry holes. You see a story that you think is going to be a great investigative story, and you spend a week or sometimes a month or two months on it, and you discover that there isn’t. And then, if you are principled, you walk away. And so that is very expensive. And the third is: it is relatively… even relative to other kinds of journalism… high-skill work, so it’s not the kind of thing in general that people do at the earliest part of their career. And therefore, the people who do it tend to make somewhat more on average than the average journalistic practitioners.
So, all of those things lead you in the same direction… which is its high cost, and so the media business has been squeezed, particularly starting in 2005. Really the state of the media business, as a business, has been downhill literally every quarter since 2005. One of the things that is being squeezed down and out in many places is investigative reporting.
Denver: Yeah. Well, with this dearth of investigative reporting, there are so many issues that you could put under a microscope and investigate… probably too many to count. So, take us inside your newsroom and share with us the process for deciding what stories to pursue and the factors that you take under consideration.
Dick: It’s a little bit easier for us, actually, to do this than many. We’re a nonprofit, so we are a mission-based organization. And our mission — very expressly in our mission statement — is to spur reform through journalistic means… to spur change in the real world. So, that is the screen through which we look at potential stories. We want to do stories that nobody else is doing because if they are all doing them, they don’t need us. And we want to do stories that can make a difference. And when we’re on stories that we think we’re beginning to make progress, or that show some potential, we pursue them. So, that is really the key analysis that our editors go through in committing the scarce resource that we have– which is our reporter’s talent– to a story.
Journalism — particularly investigative journalism — is about facts. And so, we’ll look at something like, for instance, our fourth Pulitzer earlier this year, which we won with the New York Daily News, was about the abuse of nuisance abatement orders by the New York City Police Department. And we got those practices reformed. That took less than a year.
Denver: Well, let’s talk a little bit about trying to create change, and I want to ask you that in the context of time. There was a story in the September Harvard Business Review, and it was a new report that just came out from the Bridgespan Group, and it asserted that large-scale social impact requires decades. So, what they did was they took a look at anti-apartheid, marriage equality, school lunches, tobacco control, and they found that 90% of those issues took 20 years or more with a median of about 45 years.
So, when you’re doing your investigative reporting, and want to have that kind of impact, how do you think about time and those changes that you are trying to create in the concept of this longer term, larger scale change?
Dick: Sometimes we do stories about things that are going to take about 20 years, but very frankly… frequently, we don’t. And when we do, I would say that we are more chipping away at some smaller aspect of a larger problem. So, you could frame the work that we are doing more broadly to fit into that, but we tend to deal with specifics. Journalism — particularly investigative journalism — is about facts. And so, we’ll look at something like, for instance, our fourth Pulitzer earlier this year, which we won with the New York Daily News, was about the abuse of nuisance abatement orders by the New York City Police Department. And we got those practices reformed. That took less than a year. You could frame that as part of a different kind of relationship between people and local police. You could frame it as part of a broader real estate trends or housing trends. But it is in the specifics where the real potential of investigative reporting in the shorter run comes.
I think it is also important to remember, we are doing daily journalism. We are doing digital journalism. We’re not writing books. Right? We’re not – there is very important work that’s been done like that. So, Michael Harrington’s The Other America, Rachel Carson’s Silent Spring.
Investigative journalism, as daily journalism, is very rarely like that.
Denver: Another story that you did that got my attention and others in the nonprofit sector was a story you did on the Red Cross in Haiti, which I think, you did in partnership with NPR. For those who may have missed this, tell us about that story.
Dick: The headline of that story is something like — I’m paraphrasing — the Red Cross spent millions in Haiti and built only six homes. And that is the heart of the story. Unfortunately, the Red Cross has a wonderful mission, and they have done some very distinguished things in their history. But we reported with NPR, as you say, about the management of the Red Cross for a couple of years, and we discovered a very, very disappointing and disturbing pattern of frankly poor management, poor results, waste of money, internal complaints that were not being answered, an excessively corporate approach, I think, to what is ultimately, supposed to be one of the nation’s largest charities. We didn’t frankly have as much impact there as we had hoped we would. I think, my analysis, I can’t prove this, is that part of the problem at the Red Cross is that the board is at least as entrenched as management, and that a bunch of the problems have been at the board level. But we do try to take on all sorts of power centers. This is really the broadest lesson of this.
We write about politics and government. We write about business. Those are the two usual suspects when it comes to investigative reporting in this country, and we do that. But we are also willing to look at any other power centers that we think are either abusing their power or failing to live up to the public trust. And unfortunately, I think, if you look at the American Red Cross in many ways, in many cases, it is one of them.
Denver: Well, you mentioned, you didn’t have quite have the impact there that you would hope. Give us the story that you really have had the tremendous impact on.
Dick: Well, very close to the beginning of ProPublica, we wrote a story about the regulation of oversight of nursing in the state of California… which was a disaster. And we published it in partnership with the Los Angeles Times on a Sunday. And at that time, Schwarzenegger was the governor of California. And one of the virtues, I think, of having an action hero as a political leader is he walked into the office, as we understand it the next day, brandishing a copy of the LA Times and saying, “I want to fix this, and I want to fix it today.” And we are told he was, as the story goes, that he was told by some of his aides that he couldn’t because he had appointed most of the members of the governing nursing board. And again, being the action hero that he was, he said he really didn’t care who had appointed them, and then he fired them that afternoon.
Investigative journalism is rarely like that. That you have the revolution in one day. But we’ve had substantial impact, I’m glad to say, in a lot of areas. We report about this publicly to stakeholders three times a year, and all those reports are available on our own website. So, we’ll be putting out the second of our reports for this year in early September.
Denver: Right. January, May, and September.
Dick: Exactly. And we will be enumerating the specific results of our reporting then, as we do every four months.
Denver: You recently launched the Documenting Hate News Index. How does that work?
Dick: This is part of a larger effort that we’ve been engaged in all year. Our project on documenting hate… and it’s trying to do a number of things. It is basically a coalition of news organizations– about a hundred of them now– that are asking people to tell us their stories of hate crimes and bias incidents, trying to facilitate local reporting around the country on that subject, trying to get a better handle on the data on hate crimes… and see if we can get it, more of it, understood, reported and a better handle on the data.
The News Index, which we’ve now made public in partnership with Google News, isolates all the news about hate crimes and bias incidents; unfortunately, there is a great deal of it… and makes it easily searchable and therefore particularly available to local reporters around the country who can write about it for their own communities.
Denver: You get your stories out… aside from your website, which is growing in popularity as we discussed… through your partners and your distribution partners and, boy, do you have a lot of them!
Tell us about them and how these partnerships work.
Dick: Thank you. They work in a variety of ways. First of all: who they are. They are pretty much every leading news organization in the country: The New York Times, The Washington Post, NPR News, television, magazines, radio, online. We select our partners to the extent we can with an eye to maximizing the impact of the story, to increasing the chances that we can spur change. Sometimes, we jointly report with other news organizations as we did, for instance in the case of the Red Cross stories that you mentioned and this year, with NPR… That same partner, we’re doing a major project on maternal mortality, for which the rates are actually rising in this country, unique among the industrialized world. Sometimes, we do the reporting alone, and our partners publish it jointly with us. So, it varies quite a lot.
Denver: Yeah. And I would think, initially, that if you really want to have an impact on an issue, you want to go to those big partners like The Washington Post, The New York Times and NPR. But sometimes, you also look for those niche publications that will target a specific audience. Give us an example where that’s been the case.
Dick: So, it’s been enormously effective. A couple of examples would be the Chronicle of Higher Education in the education field, where I think we spurred real change in the Social Security disability process… where there was an enormous amount of money being wasted by the government having parallel processes in different agencies. And another area where we spurred real change was with the help of our partners; it’s Stars and Stripes, the military publication where we looked at brain injury among the troops which was a serious problem. And we had been reporting that again with NPR and ourselves, and frankly not getting very far, and when we brought Stars and Stripes into the mix, the joint chiefs of staff took action almost immediately. I think because they simply couldn’t have it widely distributed to their own forces the stories of how they were in effect leaving the wounded on the battlefield when they did not have visible injuries.
So, a niche partner with enormous power like Stars and Stripes or The Chronicle, or to some extent if you want to look at it that way, like a leading metropolitan news organization around the country, and we’ve had many partners like that, can make a very big difference.
Denver: Tell us about your funding model, your different streams of revenue for a nonprofit organization, and as you mature as an organization, how that might be changing?
Dick: I always say that the simplest way to sum up our business model is people give us money, and we spend it. We do have some earned revenue. We sell advertising. We sell data. We’ve sold the film rights to some stories where we’re obviously always looking for earned revenue. But it really does comprise a pretty small portion of what we do, of what we receive and what we need to make the place go– probably less than 2%. So really, there are three big streams of revenue. One are wealthy individuals and family foundations. The second would be institutional foundations, that is to say, staffed by people whose job it is to give away other people’s money. And the third would be small donors giving money mostly online on our website; and also in some cases, they prefer to send checks.
The largest amount of money still comes from wealthy people, but the individual donors in large numbers are catching up very quickly. I think that category will account for probably $4 million this year and will–
Denver: How big a budget?
Dick: And I think we will take in probably $24 million this year.
Denver: That’s fantastic.
Dick: And so, that’s probably become our second largest category, and I would expect it to continue to grow.
Denver: And you were very heavily reliant when you started on a single donor, but that has now spread a lot, hasn’t it?
Dick: Yes. ProPublica was started, it really was the brainchild originally of Herb and Marion Sandler and the Sandler Foundation in California, and it was founded by Paul Steiger who had been the managing editor of The Wall Street Journal, my colleague there at The Wall Street Journal, and who ran our place for its first five years.
The Sandlers were initially almost all the money. This year, they’ll be something like 12% or 13% of the money. They are still our single largest donor, but it has come way down as a proportion.
I think the most important thing is being able to cycle quickly. That’s critical in any digital business. Being informal, being flat, being open to maximizing the talents of every single person in the organization.
Denver: Let me ask you. As an old newspaper guy, are you surprised that a nonprofit business model has worked in this arena?
Dick: Well, it depends on which me you would ask.
Denver: The guy who started this.
Dick: The guy – I mean historically, which me? I was in the newspaper business in the year 2000, which isn’t actually all that long ago, and which is… you probably know… was the most successful year in the history of the newspaper business.
Dick: So, if you’d ask me in 2000 if I thought a nonprofit would succeed in investigative journalism, I would have certainly said “No.” But as we were getting into before, by about 2005, it was clear and certainly by 2007 when we started, it was clear that the newspaper model was in terminal decline. I am, unfortunately– I spent 15 years of my life at The Wall Street Journal– I am a huge fan of newspapers. I still start my day with newspapers although I read them on an iPad, but I am very bearish about the business prospects of that model. And I think all sorts of alternatives are going to need to grow up… and are growing up… to fill the gaps that they are leaving.
Denver: You know, good work, produced on a consistent basis, is a product of a healthy corporate culture. Tell us about ProPublica’s and what you and your team have done to make it a good work environment.
Dick: Well, first of all, I hope it is. The boss is always the worst person to ask if some place is a good work environment. We’ve had remarkably low turnover, so that’s some indication, and people seem happy. So maybe they’re fooling me, but that might be a good indication. I think the most important thing is being able to cycle quickly. That’s critical in any digital business. Being informal, being flat, being open to maximizing the talents of every single person in the organization. I hope we’re characterized by all of that.
I’ve worked in a number of different businesses over the years. I worked in one once where my business partner, Editor-in-Chief Steve Engelberg, and I were talking about it this morning, where they often had 4-hour meetings. We almost never have a 1-hour meeting. I do think that is very important.
I think the bottom line is: different kinds of journalism have different futures. Opinion journalism, for instance, is clearly having the greatest moment in its history, and I think the low barriers to entry of digital publishing almost guarantee that for as far as the eye can see.
Denver: It sure is. You can tell a lot about what the corporate culture of an organization is just by their meetings. It really does tell you much.
Let me close with this, Dick. And you sort of hinted at this a moment ago, but you understand this industry as well as anyone– having been the assistant publisher of The Wall Street Journal among those other posts. Taking the state of journalism in the year 2017 in America, where do you see it going? And what do you think the future of it might look like?
Dick: I think different kinds of journalism have different futures. I think business journalism, for instance, is in pretty solid shape because people are going to pay for it. It has economic value. I think breaking news probably has economic value, and you still see that in cable television, for instance.
Denver: Everything is breaking news on cable television, it seems.
Dick: I do think that there is a need for new models to arise for some of the complex and expensive kinds of journalism. So, investigative journalism, which is ours, is one. International reporting for Americans I think would be another, where the press– this is a subject for another day– but the press is in very significant retreat from reporting on the world for Americans. And state and local reporting– particularly state houses, but state and local reporting generally, particularly government reporting– I think is also under enormous pressure. So, we’re just in the process of launching ProPublica Illinois which we hope will be the first of a series of initiatives trying to help fill the gaps that I think are arising there.
So, I think the bottom line is different kinds of journalism have different futures. Opinion journalism, for instance, is clearly having the greatest moment in its history, and I think the low barriers to entry of digital publishing almost guarantee that for as far as the eye can see. So, there’s some good news. There’s some bad news. And there’s going to be a continuation of a lot of change.
Denver: Well, those are good insights. Richard Tofel, the president of ProPublica, I want to thank you so much for being here this evening. Tell us about that website of yours and how people can help support your work.
Dick: Thank you. We’re at propublica.org and there’s a red donate button at the right hand, top right-hand corner of every page, and every contribution makes a real difference, and we very much welcome people’s support.
Denver: Thanks, Dick. It was a real pleasure to have you on the program.
Dick: Thank you very much for having me.
Denver: I’ll be back with more of The Business of Giving right after this.
The Business of Giving can be heard every Sunday evening between 6:00 p.m. and 7:00 p.m. Eastern on AM 970 The Answer in New York and on iHeartRadio. You can follow us @bizofgive on Twitter, @bizofgive on Instagram and at http://www.facebook.com/BusinessOfGiving