Business start

In May 2009, InvestigateWest formally incorporated as a 501(c)(3) nonprofit, exempt from federal taxes and able to accept charitable donations or seek grants. [3] The group had already dwindled to six from the original dozen. Needing to formalize the organization for administrative purposes, they appointed Hibbard executive director, although roles remained fluid.

There was ample precedent for a news nonprofit, although newsgathering was not among the tax exempt purposes listed in 501(c)(3) of the Internal Revenue Code. Journalism stalwarts like the Associated Press , Consumer Reports , the St. Petersburg Times , Harper’s and Mother Jones were nonprofits. Further, a host of news nonprofits had sprung up in the wake of the most recent industry bloodletting. These included ProPublica on the national level, and local and regional startups like the St. Louis Beacon , MinnPost in Minneapolis, the Wisconsin Center for Investigative Journalism, the New England Center for Investigative Reporting, Voice of San Diego , and , a Seattle online news site.

At first, the IW founders funded the enterprise themselves: they worked without compensation and dipped into savings. In addition, some found paid writing assignments on the side. In March 2009, McClure refinanced his house, withdrawing $20,000 in equity to cover living expenses and some reporting trips as IW got off the ground. He recalls:

We did the closing on a Friday. If they called any later than that, a couple of days later, I wouldn’t have had a job, and I wouldn’t have gotten the refinancing, and I couldn’t have done this. [4]

They had rented a small office in the Fremont neighborhood, meeting at least weekly to hash out details.Fundraising was a priority—the journalists couldn’t afford to carry IW long.

Foundations . One obvious funding source to explore was foundations. Hibbard began researching foundation mission statements, looking for those who wanted to encourage the development of new business models for journalism, and also those which supported the causes IW had identified as its niche: the environment, public health and social justice. McClure also networked, tapping connections made over his decades as an environmental journalist. For example, he met with Denis Hayes, CEO of the family-run Bullitt Foundation that supported environmental protection in the Pacific Northwest. [5] The meeting led to InvestigateWest's first grant application, and the journalists' first brush with nonprofit fundraising. Smith recalls: “How much work it is to get the grants was the biggest eye opener for me.” [6]

In May, IW took a moment to celebrate. It had won its first grant: $3,000 from the Fund for Investigative Journalism tounderwrite a story Kamb had proposed on the expropriation of public parkland for private uses. But the award was largely symbolic; to succeed, IW needed significant and sustainable funding. It had already started work on a strategy to do just that.

Pro bono plan. In April, the Seattle-based Point B management consulting firm had agreed to work with IW—at no charge—to create a business plan. McCumber had made the connection with Point B as part of a deliberate effort to look outside the news business for help. For two months, some 10 IW and Point B staff worked on the plan, which among other research drew on a comparative analysis of regional news organizations like the commercial website New West , the nonprofit High Country News and national nonprofits like the Center for Public Integrity (CPI).

Carol Smith at InvestigateWest .

The plan, which was finished by June, called for a West Coast news operation spanning California, Oregon, Washington and beyond. [7] As an early mission statement projected, IW would uncover society's failings and provide a road map for changes to public policy and practice. It would undertake varied activities, including fully-produced, multimedia, in-depth investigative stories, with a specialty in the environment, public health and justice. In addition, IW would organize public events that could double as fundraiser and civic gathering. It would recruit members, along the lines of public radio stations.

Funding would come from foundation grants, plus public support via membership drives and fundraising campaigns. It also hoped for income from custom research, consulting and other nontraditional ways of capitalizing on investigative journalism skills. But the big revenue driver would be syndication: IW would operate as a small, topically focused news service covering a broad swath of the West. The plan called for 40 percent of revenue to come from selling the same piece of reporting to a variety of news outlets. It also outlined joint distribution with other news services, and direct salesof multimedia packages to print and broadcast outlets.The ambitious first-year budget goal was $1.35 million. IW expected to raise $850,000 from foundations and $500,000 from memberships and content sales.

Training . The staff also took early measures to improve their own skills on both the editorial and business fronts. In summer and fall 2009 respectively, Young and Smith arranged internships at KUOW, one of Seattle’s local NPR stations, to work on broadcast skills. As Smith recalls:

For me, radio was a hugely natural fit because it’s a narrative medium. I remember my first editor there said you have one sentence for a thought, one sentence for a paragraph and you’ve got 10 lines for your story. Then you have your actualities mixed in there. It was like writing haiku… I really enjoyed it.

On the business side, Hibbard in May attended a News Entrepreneur Boot Camp at the University of Southern California. [8] Hibbard had been a business editor, so she had a degree of literacy, but the seminars and late-night networking sessions helped her translate the Point B plan into concrete steps and to refine her business pitch. While there, she discussed fundraising and management with Robert Rosenthal, executive director of the Berkeley, CA-based Center for Investigative Reporting (CIR). CIR was about to launch California Watch, an investigative reporting venture with a staff of dozens and a multimillion-dollar budget, which would distribute its reporting through a wide range of print, online and broadcast outlets. The contrast to InvestigateWest was humbling.

Pocantico . But IW was not alone. At the end of June, staff member Lathrop represented InvestigateWest at a conference of 20 nonprofit investigative news organizations in Pocantico, NY. The group issued the so-called Pocantico Declaration , establishing what its authors claimed was the first US trade group for nonprofit investigative news organizations—the Investigative News Network (INN). [9] The declaration stressed the importance of investigative journalism in a democratic society and the need to "nourish and sustain the emerging investigative journalism ecosystem to better serve the public." It also proposed pooling resources for fundraising, collaborating on editorial projects and services, and sharing administrative functions.

[3] The IRS officially granted 501(c)3 status on October 30, 2009, effective May 1, 2009.

[4] Author’s interview with Robert McClure on August 2-3, 2012 in Seattle. All further quotes from McClure, unless otherwise attributed, are from this interview.

[5] Hayes had organized the first Earth Day in 1972, and had worked in solar energy for the Carter Administration.

[6] Author’s interview with Carol Smith on August 2, 2012 in Seattle. All further quotes from Smith, unless otherwise attributed, are from this interview.

[7] The original intent was to report on New Mexico, Arizona, California, Nevada, Utah, Colorado, Wyoming, Montana, Idaho, Oregon, Washington, and in Canada: British Columbia and Alberta.

[8] The week-long event was organized by the Knight Digital Media Center, USC Annenberg School for Communication, the Center for Communication Leadership and the Online Journalism Review. See:

[9] The Pocantico Declaration, Creating a Nonprofit Investigative News Network , Investigative News Network, July 1, 2009 See: