InvestigateWest —like other news nonprofits—had discovered that accepting funding from foundations raised some thorny questions. For example, grants frequently stipulated a particular topic. That meant a reporter could not necessarily write the story he uncovered, but had to stick to the agreed-upon subject area. Smith explains:

We realized quickly that when you get foundation money to do reporting on sustainable issues or life issues, you can’t just suddenly turn around and decide to report on the zebra population somewhere else. I had had the luxury for a long time of just doing the story because it was a good story.

They also came to realize that their editorial track record had an effect on their ability to attract grant money—another factor to consider when deciding what stories to pursue. IW wanted to build a reputation for excellence in its chosen subjects; it had to learn to be discriminating in what it chose to cover. As Smith recalls: “We became extra mindful of asking ourselves what does this fit? Why should we do this story and how will it further our mission?” IW was also alert to the possibility that a foundation might want particular treatment of a topic—an uncomfortable requirement for a news organization. Even if that expectation was not explicit, grant-funded reporters might be tempted to self-censor rather than publish what might offend a foundation or its allies.

Other challenges were practical. Foundations tracked their money and its impact, which meant stringent reporting requirements. “Even general support grants have requirements [such as a report] that you must complete in order to fulfill the contract,” notes McClure. Producing such reports, which often meant measuring progress through specified metrics, could be time-consuming and difficult for journalism projects to fulfill. Adds Smith:

Journalists believe in the power of information, which has many intangible effects in our society. Funders understandably want something more concrete than that. That’s why [there exists] this kind of formalizing of language around choosing stories that have potential for social change.

Foundations also preferred to fund pilots or defined tasks rather than ongoing operational expenses. IW learned that it was preferable to seek grants for a one-time effort or, for an ongoing project, to understand clearly that seed money might be all that was on offer. Recalls Hibbard: “When we first got some of that funding, the feeling was that three years might be the extent of the experimental period, and then we’d see.” Meeting the annual grant cycle also complicated editorial planning, since reporting projects might not line up with foundations’ fiscal calendars.

In general, however, InvestigateWest’ s experience with foundations was positive. In February 2010, for example, it secured its largest grant yet: $100,000 from the Ethics and Excellence in Journalism Foundation (EEJF). The grant was broad and uncomplicated by most measures, specifying “production and distribution of watchdog journalism on state and regional issues through the creation of a strong, self-sustaining Pacific Northwest network of media partners.” ^[15] The team used the money to cover administrative and operating costs.

Only once did IW hesitate. In March, the Russell Family Foundation approached it to produce a report on the political, physical, and environmental geography of Puget Sound. IW had earlier envisioned doing some commissioned research, but discussion arose because this report, for which Russell would pay $10,000, would be for private consumption. Among other concerns, the journalism “studio,” as it had come to think of itself, did not want to acquire a reputation as writers for hire.

Smith, McClure and Hibbard eventually accepted the grant. They justified the Russell project because much of the information would ultimately be made public, and because IW could use the information it uncovered in other ways. Recalls Smith: “[The foundation] owned the report that came out of it, but not the knowledge and the sourcing. So we were able to parlay the work we did into reporting.” But the hesitation highlighted the tension that could arise between funders’ directives and the imperatives of a news organization.

Guidelines. Other than subscribing to the Society of Professional Journalists code of ethics, the IW team had not adopted a set of formal guidelines for handling relationships with backers and partners, preferring to follow their instincts. ^[16] However, IW had gained some insights from board member Houston. In January 2010, he co-hosted a roundtable discussion at the University of Wisconsin-Madison on ethical issues confronting nonprofit investigative news organizations. Participants included Charles Lewis, founder of the Center for Public Integrity; Margaret Wolf Freivogel, editor and co-founder of the St. Louis Beacon; and Alden Loury, publisher of the Chicago Reporter . Funding was high on the list of issues.

The panelists stressed the need to vet donors and craft policies to maintain editorial control. They noted a strong consensus among nonprofit news outlets on the need for transparency and editorial independence, but wide variation in disclosing funding sources, and whether to accept funding with strings attached. They warned that conflicts of interest and funding ambiguities could pose a liability, especially as nonprofits came to compete with for-profit news outfits. They also cautioned that investigative nonprofits should avoid promising specific outcomes—the traditional yardstick for a foundation’s investment. ^[17]

For the time being, IW was grateful for its foundation support and had encountered no serious problems. Although some grants restricted the use of funds to specific topics or areas of coverage, the largest grants were fairly open-ended, and permitted spending on general reporting or business planning. IW was careful to make clear to funders that it could not guarantee what its reporting would find. McClure explains:

This is open-minded inquiry into a complex topic, where the person’s actually taking the time to go open the can of worms and pull them out.  The whole thing early on was, just be transparent about where you’re getting your money. What we try to do here is find funders whose interests coincide with what we want to do.

McClure explains how funding relates to reporting.