The soap opera that has become Ozy Media — replete with allegations of fake audience metrics and outright fraud — offers many lessons for philanthropists, especially those who want to support media organizations that aim to reach diverse audiences.
For those who haven’t tuned in, here’s a brief plot summary: Ozy, a digital media company co-founded by former MSNBC anchor Carlos Watson, has been embroiled in scandal since the New York Times reported that a top Ozy official impersonated a YouTube executive during a conference call to try to secure an investment from Goldman Sachs. Watson is now battling a lawsuit from at least one investor and fending off claims that he’s been inflating Ozy’s audience size, among other questionable business practices.
Hard questions might have prevented the loss of nearly $83 million, which was the amount pumped into Ozy Media by investors and philanthropic organizations such as the Emerson Collective and the Ford Foundation before it imploded last month. With more preparation and a better understanding of the media environment, they could have instead used those funds to support credible, life-saving news and information in communities that need it most — especially those serving Black, Indigenous, and other people of color.
As the founding manager of the Racial Equity in Journalism Fund, I learned that all too often journalism donors fail to ask the tough questions or acknowledge what they don’t know. They need to do more than check a box, especially when it comes to investing in news organizations that claim to reach underserved people.
That starts with recognizing the challenges inherent in the news business. Media entrepreneurs are much better at producing journalism than understanding how to run businesses. In nonprofit newsrooms, which are increasingly common in the journalism world, clear and succinct conversations about an outlet’s long-term funding strategies are rare. This can result in what writers for the Stanford Social Innovation Review call “a poverty of understanding and clear thinking” about goals and intended outcomes.
Such fuzziness is one of the reasons Ozy Media was able to pull off its scheme for so long. Unlike the for-profit world, journalism business models rely on revenue streams that are increasingly cobbled together to cover the costs of producing news and information. But this fuzziness has consequences. When news outlets and donors are not well matched, money doesn’t flow where it’s needed most. Too often this means that journalism efforts that could have the greatest impact on a community remain underresourced or are never launched in the first place.
I recently founded a journalism initiative, the Pivot Fund, to support community news outlets aimed at Black, Indigenous, and people of color. We match donors with news outlets in their own backyards that many have never heard of and ensure that donors and grantees share similar values and objectives.
This approach has resulted in highly successful investments — first through the Racial Equity in Journalism Fund and now through Pivot — in dozens of struggling independent news outlets at a fraction of what investors gave Ozy. Here are a few examples:
- Epicenter-NYC, a community journalism project based in Queens, combined its coverage of the pandemic with its own campaign to register thousands of people for Covid-19 vaccinations.
- MLK50: Justice Through Journalism conducted an investigation that led to the erasure of $11.9 million in debt for poor and working-class people in Memphis, Tenn.
- Documented, which covers New York’s immigrants, created a WhatsApp product to answer questions from immigrants about topics such as landlord-tenant laws and how to navigate immigration courts during the pandemic.
- The Atlanta Voice transformed its old printing-press building into a modern TV studio that will soon incorporate podcast bays that people can use to share stories and information.
I’m often asked by philanthropists how to measure impact or choose which news organizations to invest in. The process should start by clearly determining what goals donors hope to achieve by funding journalism, especially when it comes to investing in news media aimed at communities of color.
Next, donors should make sure their values and desired outcomes closely match those of the media organization they plan to fund. This may not be as obvious as it sounds.
Philanthropists interested in investing in a news outlet that produces credible news and information for underserved communities shouldn’t assume the news organization actually shares that goal. And just because a media organization is led by a Black or brown person doesn’t mean it is actually serving Black and brown people. Ozy Media was led by two men, one Black and one Asian American, but the organization itself is majority white, and the content it produced, while occasionally about people of color, wasn’t aimed at that audience.
Seek Evidence
Finally, if donors believe they’ve found a good match, they should seek out evidence that the goals touted by the news organization leaders are achievable. For instance, to determine whether a news outlet actually serves people of color, take a close look at who is represented in the organization’s leadership ranks, staff, and board of directors as well as the news content it produces.
Community engagement, both online and offline, will also help determine whether a news organization is really reaching its intended audience. Getting an accurate read on engagement requires connecting with those who live and work in the target communities. If donors lack those connections, they may need to work with another organization that understands the community and can help verify the organization’s claims.
It’s fine to talk to other investors or donors to get information about the news outlet, but it’s also important to look beyond those personal and professional networks. The people donors already know are likely to have the same information and rely on the same people they do. They are also likely to make the same faulty assumptions.
To a large degree, that’s why so many people were fooled by Ozy Media. Ben Smith of the New York Times wrote convincingly about Carlos Watson’s magnetic personality. I’ve met and interviewed Watson and have to agree. Watson is a charismatic, charming guy with the right Harvard-Stanford pedigree. But just because a founder is impressive and cool doesn’t mean donors should invest in him.
Watson is an easy, readily available foil in this drama. But those who invested in him and his organization also need to take a hard look at the role they played. As philanthropy increasingly seeks to protect our democracy by supporting journalism, honest conversations about what works and what doesn’t are critical. Without them, donors will continue to make the wrong choices and news outlets that need and deserve help most will miss out.
