Gavin MacFadyen

Foundations have become the key to funding investigative journalism in the USA

  • Similar initiatives are now underway in the UK
  • USA tax and libel laws made foundation-funded journalism a powerful force in that country, but conditions in the UK are not as favourable
  • University-based journalism projects have also created some important new models for investigative reporting

Today 75% of investigative reporting is not done by the media, but by foundations and foundation-supported NGOs.  There has been a profound shift away from newspapers and television.

That is why we started the Centre for Investigative Journalism – we were mainly former Panorama and World in Action staff.  We had realised that there was no training going on in the BBC or ITV for investigative reporters – that is why we set up the centre, as a means of training people.

We were frustrated that we couldn’t raise the funds to do the work that we wanted to do.  That has changed profoundly now.  We have raised more funds than have ever been raised before to do the things that we want to do, at least in the UK.

In the USA there are now 50 or 60 nongovernmental organisations (NGOs) that employ journalists. There are 65,000 unemployed journalists in the USA so there is no shortage of good people, and now organisations like Amnesty, Human Rights Watch and Greenpeace all have research staffs.  And those organisations all raise money from foundations.

These foundations are now moving to the UK.

In 2006, Chuck Lewis formed the Center for Public Integrity (publicintegrity.org).  Lewis decided that he needed to raise funds to research corruption in Washington – no small task.  He was able to raise $4m a year, from lawyers’ groups, free-speech groups, civil-liberties groups.  As a result, the Center produced 160 publications and four bestselling books.  It was the most successful single investigative operation undertaken.  Lewis was a genius at raising money.

Lawyers were an important element of his work.  Lewis went to the biggest, toughest law firms he could find and asked them to help the Center, on a pro bono basis, to defend the Center’s work.  That said, libel laws in the States are nowhere near as tough as they are here. Armed with these prestigious law firms on his board, the law suits started to melt away.

The only successful legal challenge mounted against the Center for Public Integrity was by an oligarch.  Four years ago, he almost succeeded in sinking the entire investigative community in Washington.  The Center only survived because of the massive influx of lawyers to support it.

In the USA, foundations are now spending between $75m – $95m a year on niche and investigative reporting.

At Berkley university, in March each year, there is a big meeting of all these funders.  The biggest is a guy called Sandler who owns about a quarter of downtown Los Angeles.  He is not a modest man, in resources or anything else.  He funded the biggest investigative unit ever assembled in the USA – called Propublica (propublica.org).  It is based in New York in swank offices in midtown Manhattan.  It employs 28 journalists, 13 researchers and 20 production staff.  Propublica’s annual budget is $20m a year. They now have enough money to operate for three years.

The interesting thing about this kind of foundation-supported approach – with the money put up by one family – is that they devised a system of control, like CBS.  There is a corporate wing, that deals with all the money, and an editorial wing.  Communication between the two is allowed only if there is a lawyer in the room to keep an independent minute.  That is intended to ensure that commercial pressures are never brought to bear on the editorial side of the organisation.

The Bureau for Investigative Journalism is our attempt to do something similar in the UK.  It has now raised £2m. It is supported by, but not controlled by, City university.  The Bureau can produce research, but it can’t publish.  We could not find a single lawyer who would recommend that we could publish under our own imprint. We have to go through media outlets with deep enough pockets and liability insurance.  This is the only place in Europe where this is the case.

Libel costs are now estimated at £1,350 an hour.  And it could take two months work from a major law firm just to survive one bad judgement.  So, we must either operate out of Honduras or publish through The Guardian, C4, or whatever.  We also have options to publish through France, Germany, Sweden, Mexico and, the USA.  Currently we arein discussions with CBS Sixty Minutes, PBS Frontline and two outlets in French tv, all of whom are more favourably disposed to publish our work than anyone in the UK.

We have looked at the crowd-sourcing model for funding. There are several operations in the USA where that has been tried.  For example, the Voice of San Diego (voiceofsandiego.org) was started by four restaurant owners and a millionaire backer.  It looks at public health issues, fraudulent accounting and so on.  It has been successful.

I wish that outlets like National Public Radio could survive without money from huge and powerful foundations, but they can’t.  Every single outlet in public radio and television in the USA is funded by three large foundations.

The Park foundation is one, for example (parkfoundation.org).  Without it, there would be no social democratic television and no drama on USA television.  Today drama in the USA is better than here.  PBS Frontline is entirely funded by foundations and has an annual income of $40m a year. It is probably the best-regarded investigative programme in the world. It has roughly the budget that Panorama and World in Action had during the 1970s.

‘Spot.us’ is a new technique that organisations are using in the USA.  It announces, for example, that it wants to investigate road building or sewer malphesance.  The public can then decide whether to send in money, or not.  If the appeal generates enough money, the investigation goes forward.  That would not work in the UK because journalism is competitive and everyone would go after that story.  There is a lot of collegial and cooperate working in the USA that would not work in the UK.  In South Korea there is an internet newspaper with a staff of 30 and 27,000 reporters. Each reporter has his own web cam.  They produce all this stuff, the staff work as editors.  I think that it makes money, I don’t quite know how.  No one quite knows how anything on the web makes money.

Spot.us also has a model which is being investigated for Europe.  French, Italian and funders here, wondered if you could reduce journalism to niche groups – cultural, sports – and get money just for that. Then a federation of all those could be created.

There are some other novel models for funding journalism

The university funding model: unemployed journalists go to a university and extract a commission to train students. In exchange, the university provides research, publication and technical facilities.  That allows the journalists work to get out there – on the web, tv or radio.  There are 130 programmes of this kind in the USA at the moment, three of them very large.

Chuck Lewis has a big one at the American University in Washington (investigativereportingworkshop.org).  Their stuff is very good, so students, trained by professionals are now regularly reporting for the NYT, CBS Sixty Minutes and PBS Frontline.    Part of their success is down to having no material costs. The university has liability insurance.  That model has taken off in a number of universities.  The rich mix of people at most universities also adds to the mix.

Medill Innocence Project (medillinnocenceproject.org) at Northwestern University, is run by David Protess, who had been a Sunday Times reporter.  Protess put one law student with one journalism student to create 20 or 30 teams.  Each team was assigned a person on death row, and asked to exhaustively review their case.  There were plenty of people on death row in Illinois.  At the end of one year, the students’ investigations had led to 13 prisoners being freed because of police corruption, the planting of evidence and so on, uncovered by the students. The Chicago Sun Times jumped in and launched a similar campaign.  Total cost of the project was just $3,000 and it saved all these lives and turned around the way that journalism was perceived in that area.

Three or four UK universities are investigating this model – although you will, of course, have to reintroduce the death penalty.  Conventional funding from foundations, remains the main funder of investigations, however.

Ford Foundation started it, when they became independent of the Ford Motor Co.  It moved further and further to the left as time went on.  It has $35 billion to give away.  The Park Foundation gives away $240m a year.  Its money came from local newspapers in upper New York state.  Those papers provided the family with all the money.  The family split on left-right grounds and the left got the foundation.  They don’t even ask us questions about what we do with the money, they just say, ‘more power to your elbow’.

We get money from George Soros, from the Open Society Foundation.  We have not had a word of interference from them.  They just say ‘do your worst’, and we do our best.

The Lorana Sullivan foundation, is a British foundation. She was a Wall Street Journal journalist who ended up on The Observer for many years.  She was one of the best investigative financial journalists ever.

The Foundation supports the training of young female investigative reporters here and at Columbia in NY.  Her foundation supports the Centre for Investigative Journalism and will hopefully fund the Bureau.

These foundations support organisations such as Propublica, the Centre for Investigative Reporting at Berkeley, the Fund for Investigative Reporting in Washington DC, the Investigative Reporting Workshops at American University in Washington. Lowell Bergman (who was played by Al Pacino in The Insider) does the same at Berkeley. The Logan family give him $5m a year.

The real difference between here and the USA is that, in the USA, the laws are sympathetic to giving. If you can satisfy what is known as the 501c3 provision, you get a huge tax break for giving money.  So rich people get a tax write-off, plus they get a bit of a glow about their name. And this model is moving out of investigative reporting, into arts and sports journalism.

The Huffington Post has its own investigative bureau funded by the Huffington Foundation and another foundation.

The Fund for Investigative Reporting is very different.  It gives completion money or funds travel, if a reporter needs it.  The model is a similar fund in the USA that gives grants of $3 – $5000.  It’s not much money.  But, it was funding like that which gave Seymour Hersh the money to start My Lai – so is very powerful. We could not find anyone who would do that under the current tax law in the UK, however.  So, tax law is as important as the libel law.

Gavin MacFadyen is director of the Centre for Investigative Journalism and is one of the founders of the newly formed Bureau for Investigative Journalism, both foundation-funded non-profits and based at City University. These organisations were established to provide hands-on training for independent, skeptical journalism and to provide funds and resources to encourage high standards in public-interest reporting. He was a long-serving World in Action producer-director and has produced investigative current-affairs television in all the main channels in the UK and the USA.

About the Author

www.tim-dawson.com