Why Doesn’t ELi Take Ads?

Thursday, November 30, 2017, 7:07 am
By: 
Alice Dreger, Publisher

Before I get to answering that question, allow me to pause and thank all of you ELi readers who have stepped up, with just the gentlest of nudges, to contribute to ELi’s 2018 Sustainability Campaign. Wow. With over two months to go to our January 31 deadline, we have reached over two-fifths of our goal of a $100,000 commitment from the community.

Thank you also for the lovely notes of support for this public service! Those are really wonderful to receive, as this is not easy work.

So, why doesn’t ELi take advertisements to boost our revenue?

The simple answer is that ELi has opted to exist as a 501c3 nonprofit charitable organization, and that limits what we can legally do in terms of revenue generation. Our founding Board of Directors opted to become this kind of corporation because of what it allows us to do: subsist first and foremost on community support through donations.

Not only does this approach allow us many of our supporters tax deductions, which stretches their donation capability, it also means that our primary financial supporters are our readers. That’s a financial model we want, because it makes us first and foremost feeling actively accountable (literally) to the people we are supposed to be serving with our work.

This economic model is the best possible check on our nonpartisan, public service news provision. It distributes our support base among the people we are supposed to be serving. If we don't do a good job, you take your support elsewhere. That means we pay serious attention to what our readers think about whether we are doing a good job for their community.

As a 501c3 nonprofit organization, we can accept and recognize corporate sponsorships, and we do. As you may have noticed every time you visit our front page, we have had a tremendous corporate sponsor in LightSpeed, which has steadily supported us now for a year. LightSpeed just has—we are thrilled to say—committed to the same level of support for 2018!

The Board of Directors of ELi has repeatedly discussed revenue, as you might expect, and we have decided to accept corporate sponsorships when both of the following things are true: (1) a corporate sponsor’s reputation will enhance and not detract from ours, and (2) we can pretty well guess that the sponsorship is unlikely to cause us major conflicts of interest in reporting. That’s been true with LightSpeed, which we find enhances our reputation and which has never caused us a problem with reporting. (They have never asked for special consideration and have been steadily financially supportive of this public service work.)

What other revenue options are there available to news organizations in general?

Well, for-profit outfits can and do take ads. And, as every media-tracking organization has shown, that’s inadequate for survival, particularly for small-city news organizations like us.

If ads worked for survival of news organizations, news rooms all over the nation wouldn’t be laying off reporters and editors. As it turns out, many readers (a) use ad-blockers, and (b) never click on an ad. (When was the last time you clicked on an ad at a news site?)

Also note that, as alluded to above, ads create problems with potential conflicts of interest. Some news organizations claim to have “firewalls” between the publishing arm that deals with ads and the editorial arm that deals with reporting. So, maybe it is the case that the Lansing State Journal isn’t influenced by the money Michigan State University pays it. (We FOIAed it and you can see the amount here.)

But we are a small enough organization that it would be impossible for us to pretend we can separate our reporters from the knowledge of major corporate contributions, whether those corporations are for- or non-profit.

Some news organizations also produce “native ads,” which is the term used for in-house produced “news” articles that are really ads. Some also take “sponsored content”—ads written by PR agencies and are meant to look like news. Sometimes this faux-news is well-marked as paid advertising, and sometimes not so well. Our Board of Directors decided against seeking this potential form of revenue, as it seems like the opposite of what real news reporting is.

Does it sound like we’re running a news purity campaign at ELi, to our own detriment when it comes to revenue?

Well, when we ask ourselves what is going to lead to the least biased reporting we can achieve, and what is going to make our readers trust us the most as a responsible public news service organization, the model we come up with limits us a lot in terms of revenue streams. The ELi Board has decided, again and again, we’d rather have integrity than more money, even if that means we have to do with less. What is the point of doing this hard work without maximal integrity?

The model we’re running on—donations from hundreds of readers plus a small number of corporate sponsorships (at the moment, one)—is a model we believe has the kind of integrity a local public-service news organization like ours should have.

We’d love it if you would chip in. Here’s how. If you’re already a monthly donor, we’d love it if you’d up that commitment. Here’s how. And if you know someone who really ought to be helping us out—especially if you know a corporate sponsor who would meet our criteria—please give a nudge.

Thanks again for your tremendous support of this community project. Let’s keep doing it together.

 

 

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