Monetizing AND non-profit

Posted: February 25, 2012 in Biz, Incubator

The ongoing debate is For-Profit or Non-Profit and the pros & cons of each on the future of journalism.

Jeff Jarvis is all against non-profit considering it as ‘dangerous’ to journalism (see his argument).

I disagree.

I was in this dilemma nearly 8 months ago. I was on the same side with Jeff, but for a different reason. Since my team and I (the Founder) are young journalists and programmers, we couldn’t afford putting our life savings into the ‘un-known’. Another thing is: we strongly believed in what we’re doing and the message we want to send to the community and Egypt. Our project is a local media portal for Upper Egypt, called Mandara.

You can call me the “good intentions” founder.  I was never seeking money out of it. In fact, I am not till now. All what i want is to use my skills and connections to secure enough cash to turn my dream into reality. Not for me.. but for the people i’m doing this for.. they really need it.

Giving back to our community :) …. Call me naive?

And so, I was not looking for investments, big enterprises or venture capitals unless it was under CSR umbrella (Corporate social responsibility). I, and so my team, did not want Mandara to become business-driven in the sense that money alone will make decisions. We as independent journalists wanted our baby project to be free and not controlled by the bad capitalists (you’re right on that, Jeff).

What’s another model of funding? Foundations. A whole world out there called: philanthropy.

Our only problem with registering a non-profit in Egypt was that it takes a hell lot of time whereas a for-profit, you enter a building with the requested documents and get out with your company’s official registration. Non-profits in Egypt are mostly affected by the government when it comes to foreign grants as the Ministry for Social Cohesion has to approve the grant before the organization accepts it or else ….. (!)

Despite its restrictions, we went for that option. More safe in the time-being. There was also a third option; a non profit that is registered as a company and at the end of the year, you submit your papers showing you did not make any revenue and so you escape taxes (forged documents). A complex status that some people prefer to go for to escape the restrictions of a non-profit legal status and also have the freedom when it comes to international grants. This is not legal but it is some ‘innovative’ option to get around the law. It is risky, no doubt. Those were the same people on the target list in the latest crackdown on civil society in Egypt. The main issue there (for the Egyptian organizations) is: You took foreign grants without our approval and this is against the law.

Some donors are out there for their own interests, told me Mark from New Jersey. Mark is of a Syrian background and he’s starting an ambitious worldwide news portal. No one gives a penny without a reason, he believed, and so the grants are given to be reaped ‘somehow’. Maybe this is one component of Jeff’s argument that he didn’t elaborate about?

Well, it’s part of the game. But, in the end, it’s YOUR decision. There is no right decision, it’s always a matter of pros and cons, that’s what i learned in class. And Jeff acknowledges this too saying: It’s not just not-for-profit thinking that’s dangerous to journalism. It’s the unprofitable thinking of for-profit news companies.

I remember my Skype interview with Jeremy after i was notified i’m shortlisted for this class. One question he asked me was how do you plan to make use of the program for your non-profit when all what we’re teaching is about business and for-profit? I said: I don’t want to always depend on grants. I need sustainability and i have to generate my own revenue. And that’s what i’m planning for.. to run Mandara Media Foundation (MMF) with a business mind that will not set aside the ‘good intentions’. If i did not include the business component, i may end up where Chicago News Cooperative is today ..

I was reading Jeff’s blog coming across the failures of the Bay Citizen and Chicago News Cooperative. The same two examples that inspired me and triggered my start-up (how depressing this can be, huh!) are now replicated in Texas through Texas Tribune which i’m hearing it’s making huge success. Learning from the failures of predecessors is a bonus and i believe TT will do this. But, that’s another post ..

And the debate continues..

H

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Comments
  1. That is an amazing picture.

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