As 2011 began, the Center for Investigative Reporting and its robust new creation, California Watch, were in good shape. We had received a great deal of positive publicity the previous year and earned recognition within the journalism community, which helped with fundraising. In the last 18 months, the staff had quadrupled and had more than 30 projects under way.

Reinventing Journalism

Robert Rosenthal’s unexpected personal journey from journalist to publisher

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Our projected organizational budget for the year was up to $4.7 million, with $2.3 million of that for California Watch. We were not fully funded for the year, but we were cautiously optimistic we would successfully obtain the funding to move the organization into the future. But I was aware that our future was far from secure. We were not filling open positions and were closely watching our budget.

The evolution of CIR and the collaborative culture we had envisioned, both inside and outside the organization, were a reality. The multi-platform and nontraditional distribution strategies worked. And we were positioned to take advantage of changing technologies.

Strategies that would help increase revenue became our focus. We brought on a business development consultant with the goal of finalizing a business plan that would focus on three things: growing our audience, generating more revenue and increasing user engagement.

From our faltering efforts in the fall of 2009, we had become more confident about the value and possibilities of charging for content. Going into 2011, Editorial Director Mark Katches and Distribution and Online Community Manager Meghann Farnsworth led the initiative to create a membership and syndication model that would generate additional revenue. Figuring out pricing and getting a sense of what newspapers with shrinking budgets would pay was a first step. We knew that the value proposition for our stories was ridiculously cheap for our partners. Just computing salary and benefits for a reporter, as well as editing time for a story that would conservatively take three months, would cost a newsroom a minimum of $20,000.

A news organization in 2010, again based on circulation or audience size, would pay us $75 to $500 for that story. True, we could charge multiple partners for the story, but the returns were minimal for us when compared with our costs. We wanted to find a way to increase our revenue to offset at least a bit more of the expense.

Having established an appetite for our content, we knew we also had to offer other elements to the package. We developed a range of options – from five to 15 investigative or major enterprise stories. Partners could choose to buy our news posts as a monthly feed or pay a la carte prices. All of these stories would be available to partner outlets to print and post on websites. We named the service the California Watch Media Network. By spring, seven newspapers had signed on as members for a total of more than $40,000 annually. Prices were based on circulation. We maintained relationships with other newspapers and continued to offer and sell them stories.

I spent a great deal of my time on fundraising and widening our network of people who could help us financially. I would never turn down an opportunity to speak about our work or the challenge of sustaining it. Whether in front of large groups or small ones, I was nervous. My focus and energy had to be the same for five people or 500. An example is the TEDx talk I gave this spring.

While I was meeting scores of people, there were never enough door openers for me in terms of fundraising. Our chief fundraiser, Cherilyn Parsons, was overloaded with foundation fundraising. Though we had brought on a part-time development assistant, we had no one focused on individual large-gift donors. I pressed our CIR board members and others to introduce me to people who were interested in journalism and who might consider supporting our work. The board was going through its own transition with a new board chairman, Phil Bronstein, editor-at-large for Hearst Newspapers. The board members were supportive, but I felt I needed more help from them, especially in the business and fundraising areas.

Finding breathing room

But in the first quarter of 2011, I had a wonderful surprise. I had given a talk in 2008 at a San Francisco Film Society event. The late Graham Leggat, the visionary and inspirational executive director of the society at the time, introduced me to Larry and Sharon Malcolmson, a couple who had an interest in investigative reporting and documentary film. We chatted, and they came to our loft office in Berkeley. We met on a day when it was brutally hot, and our struggling nonprofit looked and felt like a struggling nonprofit. They left saying that we needed to figure out how to sustain what we were doing.

We stayed in touch. They came to hear me speak at a couple of events, and we always had animated, intense conversations. In late 2010, they told me they were going to sell their business. They would get back to me when they did. They also told me that they had been following the work of CIR and California Watch and were impressed.

In February 2011, Sharon Malcolmson called. The couple had sold their company and asked if I could meet for lunch. When we met the next week, they asked me what we needed. I mentioned several things. I also told them that we were facing a shortfall for the year.

This was awkward for me. The Malcolmsons, like philanthropist and previous CIR donor Warren Hellman, were unpretentious, candid people with whom I felt comfortable. But more than three years into my role, it was still hard to ask directly for money. I did not mention a dollar figure. Nor did they. Larry Malcolmson said they would make a donation to CIR after speaking with their accountant. I had no idea what they were thinking.

The next week, Sharon Malcolmson called and said her nephew would come by the next day with a check. I said thank you.

Then she said, “It will be for a million dollars.”

I was stunned.

The Malcolmsons knew that their support would give us a little breathing room. There were no strings attached.

“Use it to keep the lights on,” Mr. Malcolmson said. They believed we were capable of important work, both on stories and in our model, and they understood how tenuous our situation was. Their support has proved to be a lifeline this year – although we still have other holes in our budget that we’re attempting to fill.

The Malcolmsons were two incredibly generous and honest people. I was able to establish a relationship with them. It’s crucial to have that kind of relationship with individual donors. When it pays off, it is based on a personal chemistry as much as anything else. Individual donors can transform an organization, and the effort to find them, cultivate them and work with them is essential.

Individual donors can transform an organization, and the effort to find them, cultivate them and work with them is essential.

The Malcolmsons knew that back in 2010, I had begun internal discussions with Katches, CIR Associate Director Christa Scharfenberg and others about adding a video unit. We wanted to be able to produce video for delivery across multiple platforms, broadcast to mobile. We knew that there was an insatiable appetite for video and that there is more potential revenue from video than any other platform.

One of our goals was to produce short video pieces that could stand alone or be used as elements of longer-form documentaries. Our thinking was to create content in forms that the end users could access in their own way. Getting to that audience and seeing how to generate revenue from video was a challenge we wanted to tackle.

Sharon Tiller, who had started and overseen PBS’ “Frontline/World” for nine years, had been CIR’s executive director in the 1990s. “Frontline” was ending “Frontline/World,” and Tiller led a talented West Coast-based team that could be quickly and easily integrated into CIR. She became head of digital media, and with our team supporting her, she headed the fundraising effort. We put together a plan with a budget totaling $500,000. Half of that was secured with a challenge grant of $250,000 from the Reva and David Logan Foundation, and Tiller raised the rest from individuals and one foundation.

In April, we also secured funding from a family foundation for two crucial positions, editorial director for all of CIR, which included California Watch, and a director of technology. Katches was promoted to editorial director of the entire organization, and Chase Davis, a California Watch reporter with an entrepreneurial streak and a very strong track record of technological innovation, was promoted to the technology position.  We now were able to integrate all of our production and support operations into a more coordinated and organized structure. Katches, Davis and Tiller all report to me.

The day he joined California Watch as one of our first reporter hires, Davis brought an understanding and knowledge of the power of data and technology. But he had wanted to focus on reporting. In his new role, he could take his journalistic skills and apply them to new technologies, creating web-based “products” out of our stories, data and video. He also would have the opportunity to meet and engage the innovative thinkers and technologists who surround us in Northern California.

This new organizational structure was perfect: We want to be known as an organization that creates high-quality, unique, credible content that can be distributed and produced in alignment with evolving and proven technologies, while Davis wants to work in an open environment of innovation and experimentation and create his own “skunk works.” It was not going to be difficult to come up with ideas. The challenge would be implementing, building or funding any new ideas. Setting and understanding priorities and seeing where they fit into our goals was something we were learning to do, and still must master.

Our new guiding triad in this strategy would be “audience growth, revenue growth and engagement.”

With Tiller on board, we set out to replicate our print California Watch Media Network with television broadcasters. We signed content deals with ABC affiliates in San Francisco, Los Angles, Sacramento and San Diego. Total revenue from that was nearly $30,000. We would deliver five pieces a year to each affiliate. The affiliates also would have access to all of our content to use on their websites.

Our strategy was based on “repurposing” video stories – in other words, take a California Watch story and do a different version for broadcast in California and for a national or international partner.

Harnessing innovative ideas

Our seismic safety project, “On Shaky Ground,” in April 2011 best exhibited the new multi-platform model. The project, led by reporters Corey G. Johnson and Erica Perez, was the result of a 19-month-long investigation into regulatory failures in construction of California schools.

The multi-part story ran over several days and was broadcast by all the affiliates over two or three days. We also produced a version of the story for “PBS NewsHour” and a 30-minute special for KQED television that was rebroadcast on 13 PBS affiliates in the state. KQED radio did three lengthy stories, and 10 newspapers published various versions. Nearly 130 of AOL’s Patch.com sites across the state also ran it. New America Media helped distribute the story to ethnic outlets.

Public Engagement Manager Ashley Alvarado was involved in every planning and editorial meeting. At one meeting, Alvarado asked about a target audience we had not considered: the schoolchildren. No one else thought of getting the story to an 8-year-old. How would this story reach them, she asked. Her answer: a coloring book.

We had fostered a wide-open culture in which new and different ideas were encouraged. And this was new and different. Alvarado explained that most kids don’t know what to do when an earthquake hits, whether in a school or at home.

She got the go-ahead to produce a coloring book. Alvarado collaborated with the American Red Cross and elementary school teachers to create a useful guide. She thought there might be interest in 1,000 books. We eventually had requests for nearly 40,000. We made calls and got underwriters. The book was published in Spanish, Chinese and Vietnamese. Entire school districts ordered them, and the books reached children in nearly 100 schools statewide. Not high-tech, but certainly innovative. Alvarado even blogged about the experience. With the help of intern Ariane Wu, Alvarado also provided an “Inside the Newsroom” video on the subject.

Over three days, “On Shaky Ground” reached 7 million people. This conservative estimate is based on newspaper circulation and television and radio audience numbers. But the stories appeared on every partner’s website as well, and they were pushed out through social media and picked up elsewhere. We did not have the ability to capture those numbers.

One reason we need to develop a better method of knowing the full extent of our audiences is so we can build a revenue-sharing model with publishers that use our stories. We worked with the Associated Press and AP News Registry, a tracking tool that would allow us to embed code in our print and data stories so that we could gather the analytics on our audience on external sites, like The Huffington Post or Yahoo.

Through the AP News Registry dashboard, we now are able to track page view and traffic data for our stories on other publishers’ sites. This was launched in August 2011.

At the end of July 2011, we signed a contract with Ooyala, a video distribution and tracking platform with its own advertising network. This will make it possible to embed our video on partners’ websites with our brand. It will broaden our distribution capabilities and generate revenue, though just how much is unclear.

We also are beginning to work under a grant from Google to use its AdWords network. The grant, which totals $10,000 a year, offers the opportunity to drive more readers to our sites with the goal of increasing and “monetizing” our traffic. We have to learn how to manage that consistently and well. The better we show that we can drive traffic, the more free advertising is available on Google’s search network.

This spring, we redesigned the California Watch website. There are advertisements on the site, and we are projecting $10,000 in revenue this year. We are in the process of redesigning the CIR site to reflect all the capabilities of the California Watch site, which now includes enhanced engagement features.

Responding to opportunities

Two years after the launch of California Watch, there is one certainty: The market and our clients bring us surprising ideas and opportunities.

Late last year, an editor at one of the largest California newspapers told us that he and other editors with whom he was in contact were frustrated by the downsizing of reporting staffs in Sacramento. He said that the one-person bureaus many newspapers maintained couldn’t do much more than scramble every day and were not doing much work of consequence. Other news organizations no longer had anyone in Sacramento.

Two years after the launch of California Watch, there is one certainty: The market and our clients bring us surprising ideas and opportunities.

His suggestion was that California Watch and CIR take over the management of his Sacramento reporter, and other newspaper’s reporters, on one subject – the state budget – with the goal of creating a team of journalists with a mandate of doing strong enterprise and investigative stories. His suggestion was that we manage and distribute the stories to all the newspapers that became involved. He had planned to talk to other editors who he believed would support the idea.

We were surprised. An editor was offering to give up his reporter to us. He reasoned that, through collaboration, better stories would get done. We agree with him and realize we could manage this process, but, to do it right, we would need editing resources we do not have now. It’s an idea we would like to revisit at some point.

That conversation led to one our editorial director, Katches, had this spring with Betsy Lumbye, editor of The Fresno Bee. She was interested in working with us to cover the high-speed rail issue in the state. Katches liked the idea and helped coordinate team coverage with other members of our media network – the San Francisco Chronicle, The Sacramento Bee, The Orange County Register, the Bakersfield Californian, the San Diego Union Tribune and The Press-Enterprise in Riverside.

Reporting on the rail project, which to date has focused on skyrocketing costs along the proposed route, is now coordinated among editors at all the newspapers and has involved more than 20 reporters and editors. The collaboration team holds regularly scheduled conference calls, and the stories produced can be used by any of the newspapers and other news outlets.

When we started, we viewed our organization as a content creator. But now, something is happening that we had never imagined. We also are becoming a central hub for coordinating the work of multiple news organizations that share a common goal of doing high-quality investigative reporting.

A child born, not reared

As we look ahead, and look back, I see the last two years in many ways as a gestational period, rather than a birth. Yes, we have been successful, grown rapidly and continually innovated. We have learned many lessons.

We have learned we can do better and there is no room for complacency.

We have learned that even with all we have done well, there is no guarantee of our future viability. We have learned that with many different funders, we must balance their needs with ours and work diligently to continue to tell our story and show what we have accomplished.

We have learned we can do better and there is no room for complacency.

I have learned that my ability to communicate our accomplishments and our vision to the outside is as important as communicating it to our staff on the inside. And while it is important for others to lead with confidence, I must balance that with keeping us focused on what we do best – even as we continue to change. Flexibility and change remain central to my message to the staff. And in this adaptive culture, there is also a consistent message that even with all the change, our work must be rooted in journalistic values that are the foundation of our credibility.

Another lesson, perhaps obvious to others, but not me, was how to act in my role as the leader. Leading in an evolving culture involves many challenges. One is staying as calm as possible in the workplace and frequently listening and listening and listening. Sometimes, decisions have to be made quickly, but at other times, problems that seem so urgent will dissipate and fade after an initial burst of anxiety.

As the publisher, albeit one who embodies an editor’s values, my focus has to be on what will support the entire institution, what is best for the organization within the evolving matrix of innovation. This is not a period of stability. It is one of rapid change. In our own small way, we are part of the unprecedented torrent of change in technology and information.

What I have also come to realize is that, as a reporter and editor, I was at my best when things were most chaotic. I have tended to see things more clearly in those urgent and frantic moments as deadlines approached. What I found most exhilarating in my newspaper days was that, on any given day, the newsroom could be turned into a madhouse of creativity and fun by unexpected events in the real world.

Perfect training for a startup.

With its two-year gestation period, California Watch now needs to shore up its weaknesses. We have not had the infrastructure to support the journalism as strongly as we would have liked. We need more of the basics – editing, copy editing, web production, distribution help and more reporting beats. We need to figure out a better branding and marketing campaign around all of our content. We need more fundraising staff. And we need to have more skills on staff to find additional revenue from our work so that we can help fund the full potential of this new model for investigative journalism.

This does not mean we have wasted time. We have largely done the best we could with the resources we had. But it will be increasingly important going forward to manage our time better and to set priorities that are central to and supportive of our mission.

In the past six months, a great deal of our internal learning has come while working on our business plan. It has not been an easy process. A lesson I knew from the past was that we had to reach agreement on our shared goals and accept and commit to them as a team.

One of these goals is to reduce our dependency on foundations by generating more revenue from content. In meetings with business people and technology entrepreneurs, I talk about producing stories and explain how each one has been distributed on multiple platforms. Many of these people believe in journalism and investigative reporting, and they generally are impressed by what we do, how we do it and how we distribute our work. But when I talk about our efforts to raise revenue from our media partners, almost every one of them is a bit confused. That’s because they see that philanthropy appears to be working for us, and they wonder why we don’t focus solely on philanthropic support. But what we realize is that foundation support can disappear.

There are inherent conflicts and challenges for the nonprofit looking for new revenue for its work. We have multiple funders – each with its own core interests. Some funders care about a specific issue. Others care about a particular region. Some want us to measure impact by audience and want to “inform the public.” Others care deeply about engagement and impact. And some funders may simply believe in journalism and the value of investigative reporting. It’s nearly impossible to please everyone.

We also quickly learned that bringing in people with business skills is costly, but necessary. We have come to know what we didn’t know, and working on the business plan really made that clear: We are journalists, not MBAs. As we worked on the plan, we defined what would help sustain our attempt to build a hybrid nonprofit with a part of its brain driven by revenue.

This led to an understanding that there are a wide variety of ideas that could help sustain us: Important, unique stories that make a difference may do more than anything else to sustain us. Creating a product from our data content that could take off as a mobile app might help sustain us. Figuring out the tools and knowledge to master audience engagement can help sustain us. Choosing and executing the stories that make an impact can help sustain us. Adding staff to cultivate individual donors could help sustain us. Having the staff or skills to master online and social media marketing and fundraising could help sustain us. Curated and audience-targeted data could help sustain us. Co-production and syndication of our stories could help sustain us.

It will be multiple and varied streams, large and small, that could create a river of revenue.

Our plan is not perfect, and our hope is that other investors and innovators will help us sharpen it as we move forward. We realize we need people and organizations with complementary skills to work, collaborate and meld with us.

In two years, CIR and California Watch have morphed and changed. As a group, our leadership team has agreed to focus on our three pillars of sustainability – audience growth, new revenue and engagement.

We know we can do the investigative reporting. But our sustainability and support staff is stretched thin or nonexistent. The bulk of our resources have been focused on content. If we obtain funds going forward, our priority will be on positions that create a stronger infrastructure for sustainability. We have opportunities around the customization and access to data, especially “sticky” interactive databases that engage people. We need to do more of that. We also will make a greater commitment to use animation as a tool for storytelling. There is clearly an audience for that medium. An example was the recent success of CIR’s “The Price of Gas” animated video.

We know we must do better with branding and marketing. It is important that the public understand the social currency of the work of investigative reporters, whether at CIR or the other investigative reporting nonprofits. It makes sense for us to work closely with our partners at the Investigative News Network on a national marketing and branding campaign around the value of journalism and investigative reporting.

Poised on a chasm

On a personal level, this has been a challenging and, at times, difficult journey. I am fortunate to have had the opportunity to be part of building something unique. The torrent of my personal as well as professional ups and down over the course of my career has informed much of what we have done here at CIR and with California Watch.

But as I have made clear, there are things we can, and will, do better.

I need to help focus our priorities, stabilize our efforts, and get consistent data on our metrics and distribution. We have added editorial work without adding support staff this year, except in the digital area. This is a dilemma in all startups. You can see the opportunity, but it is a lengthy process to convince funders of the need and then secure funding.

I need to work more closely with the board and manage up, as well as down and sideways. We need to add new people to the board, with skills in technology and business and networks of contacts who can help us energetically sustain the organization.

As publisher, I have overseen tremendous growth, but in a staggered, inconsistent way. We are operating on literally dozens of different funding cycles, which makes for disjointed planning. For example, we are securing funds for a distribution manager, even as funds for reporters are becoming depleted. We are relatively confident we can keep the funds coming in this way, but think about what this way of operating would mean if you were running a newspaper.

Imagine a scenario in which your reporting resources and the costs of publishing the newspaper were set until the end of the year. But in October, the board of the group that has funded the gasoline for your delivery trucks decides it has a new priority. Your funds for content creation are restricted, and you can’t find another gasoline funder, meaning you can’t get your newspapers out to your home-delivery subscribers. Your entire organization has been disrupted as you scramble to find a new source of revenue to pay for the gasoline.

Siloed grants mean you are managing in a fairly rigid environment. General support funding can lead to more flexibility in managing, but these types of grants can be especially difficult to secure, given a foundation’s desire for outcomes that meet their specific goals.

Just as foundations encourage nonprofits to collaborate rather than compete in certain instances, it would be helpful if foundations collaborated more with one another to fund projects in which they share an interest. Such pooled funding could ease the precarious fiscal straits many nonprofits continually encounter. California Watch was lucky to have three key seed funders that worked together. Now we are working to renew that collaborative approach.

Even when wearing my publisher’s robes, underneath I am still a journalist. My own work is no longer focused on telling other people’s stories, but on telling the story of the organization. We are constantly evolving that story to the changes and opportunities that swirl around us.

Ours is an important, fragile mission. I am not doing this simply because I love journalism and all the adventure and romance of what that conjured up when I was a young man. What we are doing has social value. It is not without risks. Oakland Post Editor Chauncey Bailey was murdered because he was a journalist. There are few professions in which people are killed because of their line of work or because of who they stand up to. In this country, the killing of a journalist is rare. That is not the case globally.

Even when wearing my publisher’s robes, underneath I am still a journalist. My own work is no longer focused on telling other people’s stories, but on telling the story of the organization.

Totalitarian states use and manipulate information to create environments of fear, and they use the fear to exercise control. Those who take a stand are considered mortal enemies of the state. Those enemies are targeted and eliminated, and they are often journalists. That is still the reality today, even with the revolution in technology that has opened up the world to information and communication.

In the months ahead, I will be working to secure the future of California Watch and CIR. The future means securing bites of two to three years of funding – if we are fortunate. When I look back at the last few years, I am satisfied by what we have achieved. Looking ahead, I can see what more we can accomplish. In a reverie, I might see a secure future.

As a journalist-turned-publisher, I can see clearly that I have to deal with reality. My job is to secure the funding, protect what we have done, bring in the supporting staff to sustain it, and continue to evolve and innovate.

What we have done in the last two years has exceeded many expectations. But we’re poised on a chasm. We may fall or keep our balance or leap it.

When I started this job, I had never been great at asking for help. But I’m over that now. I have had the opportunity to give some talks to some wonderfully successful people, including from the tech world. In one talk I gave at a News Foo event, I had five intense minutes to state my case using pictures or slides, and they switched every 30 seconds. Among my slides were a guillotine, symbolizing getting fired, and at the end, a picture of a futuristic train flying into space with the earth shining like a gem below. It symbolized an unknown future.

I ended that talk, pointing at an audience of very smart Silicon Valley stars, and told them there is a solution to this challenge of sustaining journalism. But it’s going to take people like me working together with people like them. It was a challenge, but also a call for help.

For all of us, a relatively small group of innovative, entrepreneurial journalists, the mission is to forge a model that ensures that journalism and investigative reporting survive, fulfilling their role in informing the people and protecting democracy. For me, the most rewarding and exciting journeys have involved risk and the unknown. So far in this job, I haven’t been shot at or thrown in a dungeon – or even fired. But it’s still been the most challenging and rewarding experience of my career. And the journey continues.

Robert J. Rosenthal

Robert J. Rosenthal is a board member at The Center for Investigative Reporting. An award-winning journalist, Rosenthal has worked for some of the most respected newspapers in the country, including The New York Times, Boston Globe, Philadelphia Inquirer and the San Francisco Chronicle. Rosenthal worked for 22 years at the Inquirer, starting as a reporter and eventually becoming its executive editor in 1998. He became managing editor of the San Francisco Chronicle in late 2002, and joined CIR as executive director in 2008. Before joining the Inquirer in 1979, Rosenthal worked as a reporter for six years at The Boston Globe and three-and-a-half years at The New York Times, where he was a news assistant on the foreign desk and an editorial assistant on the Pulitzer Prize-winning Pentagon Papers project. As a reporter, Rosenthal won numerous awards, including the Overseas Press Club Award for magazine writing, the Sigma Delta Chi Award for distinguished foreign correspondence, and the National Association of Black Journalists Award for Third World Reporting. He was a Pulitzer Prize finalist in international reporting. Rosenthal was a Pulitzer Prize judge four times. He has been an adjunct professor at Columbia University Graduate School of Journalism and the University of California at Berkeley Graduate School of Journalism.