Receiving and managing the funds
Finding a way to actually receive monetary payouts is a challenge for many collaborations.
With a number of SJN’s early grants, the partners had to come up with creative ways to accept them. “We had to jump through a couple of hoops here because, of course, when the collaboratives [first] get together, they are not a legal entity. They are just a group of organizations that say, ‘ok we’re going to work together,’ and we can’t cut a check,” said Gross. “So, what we do is we make them all sign a contract with us so that we can disburse funds individually. That means that legally, they are allowed to receive funding from us.”
For the collaborative partners of The Reentry Project, those hoops didn’t go away once the first round of funding ended. Initially, SJN supported the project from its own discretionary funds. The Knight Foundation then joined the effort, backing it with unrestricted funding. It was SJN’s first time experimenting with this model, so the terms were a bit more flexible than those of currently-supported collaboratives. When SJN decided it wasn’t in their long term plan to continue supporting large-scale place-based projects, Friedman-Rudovsky said she had to find a new way to fill the funding gap.
“I had to find a fiscal sponsor to be able to receive [future] grant money,” said Friedman-Rudovsky. “There’s an organization here called CultureWorks which does back-end financial administration and HR for small arts and humanities and journalism nonprofits, so that was a good fit because they could accept the money and administer it to us.”
Like many fiscal sponsors, CultureWorks took a percentage as payment: 12 percent from the $100,000 Lenfest grant. That cut needed to be factored into the overall budget, she said. However, the sponsorship served a critical purpose for the fledgling group. They “also were able to do all the back-end stuff, which was great, because at that point it was literally just me trying to almost be the project editor and get the new project off the ground and also try to do the fundraising and essentially play the role of the executive director of a new nonprofit,” she said. So, retaining a smaller portion of the money was worth not having to handle another set of very specific tasks. In the years since, Resolve Philly has become a nonprofit, able to accept and manage its own funds.
This is something to consider as you are figuring out your collaboration’s framework for managing grant funding. Is having a fiscal sponsor who can manage some of the financial back-end work a logical trade-off for a little less cash to you and your partners? Is your grantor willing to help you find a workaround?
Guns & America is currently in the second year of its grant from the Kendeda Fund. Soon, they’ll have to decide as a group how they want to continue in the future. Since the project began as a short-term partnership with a set time frame, they decided to use another common approach. As the lead station, WAMU took on the responsibility of being the grantee, paying out sub-grants to the other partners.
This is the same kind of structure CPB prefers when it gives out a grant. “Usually, what we ask for in these collaborations is we just want one station or one organization to be the grantee. We don’t want to have to disburse funds to half a dozen different stations all in the same collaboration,” Merritt said. “We funnel it all to one lead organization or lead station and then they have sub-agreements with all those stations and disburse the money out to them.” It’s more practical to have a single grant agreement with one lead than five or six agreements with each individual partner. “But honestly, you have to start all these collaborations with the stations, the organizations involved, being on the same page,” she said. “They’ve got to have a shared goal, a shared vision for the work they want to do together.”
SJN takes the opposite approach. “We very much encourage not to have any individual participant take on the role of being the fiscal agent or the conduit whereby the money is disbursed,” said Gross. When one collaborative partner controls the money, it may seem to other partners that they are attempting to direct the collaboration, even if they don’t try to in practice. It can be an obstacle to work flow, communication, and the sharing of ideas, if the perception of inequity is there.
There is another path open to partners who want to commit to a longer-term solution, which is to jointly become a nonprofit — or have the collaboration itself become a nonprofit. For the partner stations of CoastAlaska, they function as either individual entities or a group, depending on what works best for each specific grant. “One of our values systems is when it makes sense to be one, we are one; we’re CoastAlaska. And when it makes sense to be six, we’re six,” said Kabler. “But we never lie. So, if an agency says yes, we will accept a grant request from you, we’ll say OK, we each have a 501c3 and then we have this centralized formation, the group exemption organization of CoastAlaska.”
Depending on whether the collective nonprofit or the smaller individual nonprofits fit the bill, they’ll go either way. “We’ve written grants for the whole and then split the funds between us on some hopefully pre-agreed upon formula. Each station manager will write a grant if they’re eligible. And some stations are eligible for a grant that’s community-based, so they would write a grant within their own community that the other stations wouldn’t be eligible for,” she said. “If we aren’t clear whether we can apply as Coast or if we should apply as individuals, then we ask and explain who we are and how we work.” An interesting advantage to this approach is that it can open up more potential avenues for distributing funding or benefits where they best serve the whole.
While each of the CoastAlaska stations has its own broadcast license, their financials are merged. If partners in a collaboration are not as financially intertwined as the Coast stations, it may be more complicated negotiating how to switch back and forth between collective and individual funding, and sharing amongst the group.
Allocating the funds
Figuring out how funds are allocated within a collaboration can be one of the trickiest parts of working together. This is where many of the questions about equity, equality, fairness, and practicality can come into play. It’s crucial that all partners in a collaboration are on the same page as to how these decisions are made, what options they have to participate, and how they can disagree with the process or suggest changes.
To ensure that their partners are starting off on the same foot, SJN takes an interesting approach with their regionally-based collaborations. “All the organizations operate within the same local media ecosystem and so what we encourage them to do is [agree that] everybody is equal here. Everybody brings something to the table,” Gross said. For example, under SJN’s Local Media Project, partners get a pot of money and make joint decisions about how to spend it. In some cases, the pot is as much as $100,000 per year for two years.
Partners can spend it on reporting, database creation, audience engagement events, and more, but all decisions must be made jointly. It’s “pretty much like a board in a corporation in a simplified fashion,” she said. “Everybody votes.” If somebody wants to take a reporting trip, they typically bring a proposal to the group and tell them how much they think they’ll need for it. Collectively, the partners decide if it’s a worthwhile expense. They also discuss how much to set aside for group activities, like engagement events. “Everybody has access” to the communal funds, Gross said.
For Guns & America, the agreement between WAMU and the Kendeda Fund outlines a payment schedule..
“So, it’s not an as-needed thing,” said Bernfeld. “There’s an official schedule laid out in the terms of the grant.”
The money went to American University, which is the licensee, and the chief content officer of the station serves as the primary investigator on the grant. “The American University grants office and the business administration office at WAMU work together to administer the grant,” he said.
The MOU among the partners lays out the payment schedule for each of the other stations. “So, these stations send the WAMU business office an invoice and they’re paid according to that schedule,” Bernfeld said. “The partners can each decide how they use their own chunk of the money.
One of the challenges the Guns & America partners faced was figuring out which partners should get which pieces of the grant pie. The newsrooms range from east coast urban to mountain west rural and by necessity, have different costs. “We do have newsrooms, say, in Washington, D.C. [in which] the salary costs are higher than in many of our partner station newsrooms. The cost of living is higher,” he said. “But what’s also interesting is our reporter in Boise, where the cost of living is much lower, has to have a much larger travel budget because they cover a much larger physical area, the physical area is a lot harder to travel in, and he’s having to travel a lot more and a lot further and a lot more often than our reporter in DC. So, none of those things completely even out, but I think if we had to account for every single detail like that, we might have run into some problems.” They decided that each station would receive the same amount of grant money, to use as they saw fit, under the project guidelines.
That means each station can use the money to hire one reporting fellow and provide funding for their professional development, equipment and travel. Once those expenses are covered, the stations can use the money to advance Guns & America in other ways. For example, some have used it to pay for additional editorial support, or to cover the cost of a large reporting project.
“It is a sensitive question,” he said. “That was a difficult decision for us to make. We made it at the beginning of the project due to a number of factors that included just the ease of budget and grant administration. We made the decision that we would provide every station with enough funding to do this project really, really well, even if that meant perhaps some stations could do more with the funding — in order that we didn’t waste so many resources tracking the funding, figuring out sliding scales, going back and forth on invoices and payments and so forth as the need arose.” While the columns may not add up in exactly the same ways, Bernfeld said he hopes overall, they’ve managed to achieve a fair distribution.
CoastAlaska faced a unique set of challenges when they first joined together as a single nonprofit. They had to make some serious changes to how finances were managed at each station and the conversations weren’t always easy. “At the beginning, we didn’t have that many shared services and we just had to figure out a way that everybody paid fairly for shared services and then as time went on, we scaled up,” said Kabler. “The other thing that happened was the stations each had a wide range of reserves. So, some had significant reserves and some had almost no reserves, and in early conversation, that was a big point of contention, this turning over your reserves for the good of the group.” The stations had to come to the understanding that individual survival depended on ensuring the collective was solvent. They pooled their reserves and moved many services — like engineering, financial work, and administration — to the regional level. Staff were cut at the smaller stations, which was painful for the partners, Kabler said.
Now, years later, the system has proven to be effective. “At this point in time, the only funding that is not considered to be Coast funding is a bequest or a donation that has donor restriction on it, for example, to be used by a certain station,” she said. “Then the station gets to designate that funding is for them. Otherwise, all revenue comes to CoastAlaska, but stations get credit for it. The cost of regional services are a line item in each station’s budget.” Stations pay for regional services based on a percentage of their contributions. So, the smaller stations pay less money, but they pay the same percentage of their total as the larger stations. Every partner carries the same weight, if not the same amount.
Things to think about: