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Why the EveryBlock Sale Matters: Chicago Foundations Pass the Buck on Sustainability

This content originally appeared on my former Chicagosphere online-media blog, hosted on the Chicago Tribune‘s ChicagoNow network.

As widely reported this week, Chicago-based hyperlocal newsfeed aggregator was bought out by MSNBC for an undisclosed sum likely in the millions. At a time when Windy City foundations are posturing to be the nonprofit saviors of online local news, the surprise sale may point to a different future for popular sites. Is there money to be made in the online local news sphere after all?

EveryBlock founder Adrian Holovaty originally funded the site through a two-year, $1 million grant from the Knight Foundation that ran out on June 30 of this year. The money allowed Holovaty and Co. to build the first successful aggregator of news and data feeds keyed to individual street addresses. Visit the EveryBlock site and enter an address, ZIP code, or neighborhood in any one of 15 cities including Chicago, and you’re presented with map-keyed links to relevant breaking news, crime statistics, flickr feeds, municipal data, blog entries, and any other geographically coded web content with a feed attached to it.

Holovaty told Crain’s Chicago Business today he’s relieved to be off the foundation and potential venture-capital roller coaster, saying:

“I’ve just heard too many horror stories about VC [venture capital] funding. I talked with several VCs, including some particularly nice ones whom I would now count as friends, but I also talked with several startups about the ups and downs of their funding experiences.

[Ed. Note: Tthe article notes Holovaty’s stress at knowing his Knight grant was about to expire, but Holovaty doesn’t specifically express relief at leaving grant funding behind. –mtd]

He vows life will go on as usual at the company he no longer heads, and that MSNBC’s intention to keep the feeling of a startup culture intact makes it a good fit.

What you should glean from the above is not EveryBlock’s success, however. It it the fact that Knight let its funding of the obviously highly useful and scalable site run dry. That’s emblematic of the traditional (read: outdated) thinking of Chicago’s foundation community in general: fund a project to see if it can grow, then abandon it to its own resources to sink or swim.

Foundations walk away because they try to spread their money around communities to widen the scope of the financial impact of their grant monies. They crow about their grantees when they’re funding them, but rarely discuss the disasters that happen when they choose to walk away.

A wiser approach might be to lern from the well-known City Year “Starfish Story”. A man asks a young girl walking along the beach why she’s picking up stranded starfish and throwing them back in the water. “You can’t save them all,” he tells her. “No,” she replies. “But I saved that one.”

Knight can surely take credit for helping EveryBlock grow. But if they distribute a release claiming to have brought Holovaty’s site to the verge of the MSNBC sale, read it with a grain of salt. Random good fortune like that is rarely the result of financial abandonment.

In fact, on the Knight Foundation Blog, Journalism Program director Gary Kebbel says of the sale, “We always hope that innovations Knight Foundation funds are supported by the marketplace.” Translation: We’re glad someone else saved you, because we weren’t going to.

Now the Windy City’s foundation community wants to ride in and save local news in general. As I noted here and here on Chicagosphere, this year’s foundation-sponsored Making Media Connections and grassroots Chicago Media Future conferences both underscored the declining print space given to Chicago local news and the need for community-based online sites to take up the slack. With that in mind, this month, the Chicago Community Trust in partnership with the Knight Foundation announced a grant program for online news initiatives.

It’s called Community News Matters (with no kudos due to Trust/Knight for stating the obvious), and calls for web-based ideas that “increase the flow of truthful, accurate and insightful local news and information in the region” that can be sustainable in the future. In the release announcing the grant program, Trust president and CEO Terry Mazany said:

“Now, with traditional news media struggling, we seek to ensure that citizens in the Chicago metropolitan area have a robust flow of high-quality, relevant information available to them.”

Bu given Knight’s track record with EveryBlock, for how long is anybody’s guess. Until a magic funding formula arises or a national media empire with deep pockets swoops down from the sky, checkbook in hand?

Moreover, the grant program–announced in August–has a proposal deadline of September 15th.  Not much more than a month for potential grantees to come up with ideas to save the future of online local news. Anyone else think Trust/Knight already had their winning grantees well in mind before they announced such a ludicrous time frame?

Chicago foundations, for all the good they do in other domains, are simply out of their element in the online sphere. I appreciate Trust/Knight saying they want to fund the next best scalable idea. But they obviously have no clue what that idea might be on their own, and worse, no awareness that their own track record doesn’t suggest they know how to foster online sustainability.

Well-meaning community news sites written by foundation technocrats, run by insiders, with meager means of community engagement (I’ve already written about two of these: Community Beat and Pilsen Portal) aren’t going to save local news. Yet they’re the initiatives currently funded by Chicago foundations. Meanwhile, truly successful, engaging, and scalable local and niche news sites like Gapers Block, Beachwood Reporter, Windy Citizen, and (once its grants also run dry) Chitown Daily News are left to wave in the wind.

If Chicago foundations want to be of any use in the online sphere, they’d do better to understand how it works in the first place–and who’s already at work there. If any potential grantees had a silver bullet for sustainability, they’d already be using it. For Trust/Knight to be placing the entire sustainability onus on grantees, themselves, at this point is no help at all.

The real moral of the EveryBlock sale? There’s still money to be made–and sustainable futures to be had–in the telling of online local news. But as far as Chicago foundations are concerned, at the moment, you’re still on your own to find them.

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Michael Thaddeus Doyle

I'm a NYC-native, Latino, Jew-by-choice, hardcore WDW fan in Chicago with an Irish last name. I believe in social justice, big cities, and public transit. I do nonprofit development. I've written this blog since 2005. Believe in the world you want to live in.

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