A fundraising question about Spot.us

20 April 2009

Ruth Anne Harnisch posted a comment earlier today here and pointed to Dave Cohn’s Spot.us as a model to watch for journalism.

The basic idea: reporters propose story ideas or “tips” in the hope that there will be enough “citizens” interested in making a pledge of support.

Here’s how the Spot.us site describes what this means:

“Pledges give reporters a sense of community interest in a news “tip.” It does not represent real money. Nothing is committed – although we ask you pledge only what you’d be willing to eventually donate if a reporter builds a full “pitch” inspired by this tip. Donations to pitches are tax-deductable and are a transaction. If the pitch is unsuccesful, you will receive money back in the form of Spot.Us credits. No matter what your money will go to support journalism.”

Originally, I think Dave saw Spot.us as a broker between reporter and audience, but it’s actually turned out to be more complex than this, and one of the most interesting developments was his decision to hire a community organizer to help bring communities of interest (both networks of people and institutional nodes) into connection with stories and reporters).

But the basic  fundraising model is this: the donor supports not the organization, but the project sponsored by the organization.  Right now, Spot.us as an organization lives by virtue of the Knight Foundation grant (and as a test case, that’s IMO an appropriate use of foundation money).

I agree with Ruth Anne: with the Knight grant as a backstop, Dave’s done an amazing job, not just in thinking through some of the technology needed to make crowdfunding work. Spot.us respects the work that real journalism requires, and it opens out what can be a professionally hermetic world by putting reporters in direct contact with the audience, by making the source code openly available, by encouraging others to try it, too. Now it’s true that Spot.us is carrying a heavy load of expectations (which Dave has so far done a really good job of managing), but the project has already made its mark.

But the question, I think, is whether and how folks will shift their loyalty from the project to the organization (there’s a second question, too, which is whether this deeper level of donor loyalty matters for Spot.us-like organizations – maybe I’ll have to go have a conversation with Dave about this, huh?)

Here’s the conventional fundraising wisdom: if a donor makes a donation in response to a premium (for instance, a calendar) or as the price of admission of attending an event, the “conversion” rate for these donors – that is, the proportion of donors who make a second gift  – is usually way lower (or the same thing: much more expensive) than the cost of getting a second gift from a donor who comes in through, say, direct mail that makes the case for why someone should part with their hard-earned cash without getting anything in return (except huge psychic or political or cultural rewards).

Non profit fundraisers spend a huge amount of time and effort trying to figure out how best to shape a relationship with donors that builds the strongest possible basis for long-term loyalty – and almost without exception, if an organization can make the case that its core mission – and not just a particular program or project – is worth supporting, its “conversation” with its donors is that much more advanced. That can translate into serious dollars and cents.

At Mother Jones, we have our own version of this headache: nearly all of our donors come to us as subscribers to the magazine for the “crazy price” of $10. It’s a transactional relationship: you plunk down your ten bucks, you get the magazine. A simple exchange. But it costs way more than that to actually do the reporting, and that’s why we push hard to encourage folks to become donors, too. That conversation is all about our mission – independent investigative journalism+progressive social change. Not just about a magazine sub, but about making a difference in the world. We put a ton of time and $ into making the case that our subscribers really oughta become donors too. About 12 percent of our subscribers become donors as a result.

So what I’m wondering is how to encourage Spot.us donors – enough of them with large enough gifts – to make the jump (and it could be a big one) to buy into Spot.us’ mission as a whole. Not just the particular story they want to see published.

8 Responses to “A fundraising question about Spot.us”

  1. Dear Steve,
    Another great result of Knight’s investment in Dave Cohn and spot.us is the software that’s available to anyone and everyone.
    Digidave wants to spread the model and is working with others to help them use what he’s already developed.
    Geanne Rosenberg at Baruch College is spearheading collaborative journalism projects covering local neighborhoods in the New York City area and will use spot.us software.
    I’m currently advertising for a Community Supported Journalist for http://www.coachingcommons.org (the job listing is posted there and elsewhere) and may use that software too.
    Why wouldn’t Mother Jones employ that software too, to enable subscribers who pay the “crazy” $10 to invest more in stories or reporters that pique their interest?

  2. david cohn Says:

    hey steve

    apologies for the slow and quick response. i am actually traveling and have no idea how to do punctioation on this italian keyboard.

    it is my one vacation a year – and when i return itll be back to spot.us.

    i would love to sit down and chat with you more about what we have figured out and where i think we need to improve.


  3. Digidave Says:

    I’m back now and funny enough at the last community advisory board meeting we went over this same question.

    The way we put it: Are we a platform that puts weight on the reporters to fund themselves – assuming that most donors are one-time givers.

    Or are we a community site that is going to try and create a dynamic relationship with our audience and give them more than the single project.

    More and more – we are trying to become the second. I actually see Spot.Us’ goal and MotherJones’ to be very simpatico.

    The only difference is that we allow more control and transparency over where the money goes – which in theory means people will donate more.

    I wonder: If you take the subscribers and ask them not to donate to “MotherJones” but to a specific MJ project – would that 12% increase?

    I have to suspect it would. In that situation – spot.us is a platform FOR organizations like MJ.

    I know for example at the bottom of news stories MJ has a donate button. But what if instead of having a blank donate button – you put in: “Donate to report more ON THIS TOPIC! – and you had a way to show the transparency of money so people knew that their money was going to report more on that topic… would the 12% increase?

    I think that is the fundamental question Spot.us is trying to seek. Donating to journalism isn’t new (NPR, MoJo and more) – but never before have the donations been the driving force in making specific acts of journalism happen.

    We should definitely catch up sometime. Always a pleasure to chat with you.

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  5. […] future of (biz models to support) journalism (aka FoJ). So I reached out to Dave Cohn at Spot.us here, here and here, because I think he’s doing something really interesting. And I’ll get […]

  6. […] Steve: A Fundraising Question about Spot.Us “the question, I think, is whether and how folks will shift their loyalty from the project to the organization (there’s a second question, too, which is whether this deeper level of donor loyalty matters for Spot.us-like organizations – maybe I’ll have to go have a conversation with Dave about this, huh?” […]

  7. […] conversation began when Katz asked a question about fundraising for Spot.Us, which allows readers to donate to fund individual journalism projects that they would like to see […]

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