The Discourse missed its fundraising campaign goal. Here’s what the Canadian news startup learned.

This spring, the Canadian news startup The Discourse launched a fundraising campaign. It was looking to grow its base of monthly donors to support its reporting in three communities. 

The site called the campaign a do-or-die moment. 

The Discourse, however, did not meet its goal. It couldn’t convince enough readers to make monthly contributions. As a result, it decided to close two of its pilot sites and double down on its most successful pilot covering the Cowichan Valley in rural British Columbia. 

This week in Solution Set we’re going to study The Discourse’s campaign and approach to funding, share what it learned from the membership push, and discuss how it’s planning to move forward. (I’d also like to mention how Editor in Chief and CEO Erin Millar graciously put up with my questions earlier this week on Canadian Thanksgiving when I forgot it was a holiday there. 😬)

Solution Set is a weekly report from The Lenfest Institute for Journalism. Every Thursday, we take an in-depth look at one riveting thing in journalism, share lessons, and point you toward other useful resources.


 

Here’s the TLDR:

TLDR

• The Challenge: The Discourse needed an influx of cash from the fundraising campaign to support its three pilot communities. The campaign fell short. 

• The Strategy: Discourse Editor in Chief and CEO Erin Millar and her team spent the summer assessing the Campaign and plotting their next steps. They decided to focus on just one community. 

• The Numbers: The Discourse’s goal was to attract 1,000 contributors. Just over 500 people donated. 

• The Lessons: Transparency has been one of the hallmarks of The Discourse and one of the keys to retaining its subscribers. It focused on its next steps thinking about the audience engagement funnel.

• The Future: The Discourse is launching a number of projects to work toward sustainability. 

• Want to know more?: Scroll down to learn more about The Discourse’s business and the broader Canadian ecosystem. 

• Anything to add?: Keep scrolling to learn more about our next #NewsBookClub read. 

The Challenge

Over the past year or so, The Discourse was hit by a “perfect storm” of funding challenges,  CEO and Editor-in-Chief Erin Millar told me. 

Launched in 2014 as Discourse Media, a nationally focused investigative site and broader journalism platform, the company was primarily bootstrapped for its first five years. But in late 2017 and early 2018 it decided to shift its focus to build a platform for audience-driven local news that can help fill the gaps in news coverage left by the decimation of local newspapers. 

It rebranded as The Discourse and decided to focus its initial coverage on serving three communities in a pilot of sorts: The Cowichan Valley, a rural community south of Vancouver; Urban Nation, serving the indigenous population in the Vancouver area; and Scarborough, a diverse area of Toronto. It planned to use these three communities as pilots, with the ultimate goal of growing the model to communities across Canada. 

Each Discourse site would ask readers what topics they wanted covered. This created a structured data set that is regularly updated so Discourse reporters can then identify the five topics that people want deeper coverage on. 

Reporters turn those topics into more fleshed out story ideas, which they then present back to the community, which votes on the stories they want reported. 

For example, last year, the Urban Nation readership voted to back an investigation into fake indigenous art that was being sold to tourists in Vancouver. It won over proposed stories on police racism and a murder trial, among others. 

“What my traditional newspaper and magazine feature writer said — go for the racism in the police force, but that’s not what the community wanted,” Millar said. “They already knew about that problem.” 

This is a fairly radical rethinking of what journalism looks like, and to complete the transition, it set out to raise additional funding.

But raising money is hard. Really hard.

“Starting something is crazy. It’s so crazy,” Millar said. “Had I known how crazy this was going to be, I might have had second thoughts. We’re still going, but there’s just a million things that can happen and about four of them happened at the same time for us, which made it really really tricky.” 

In 2017, it set out to raise an additional $1 million from a crowdfunded equity campaign and additional investment from angel investors and values-aligned funds. (A note: These monetary figures are all in Canadian dollars, which has an exchange rate of $1 CAD to $0.76 USD.) 

Nearly 300 individual investors contributed about $350,000. It received $250,000 from its lead investor. In total, since 2017, The Discourse said it raised more than $1.3 million in investment capital — a combination of debt and equity investments. 

Despite the fundraising success, Millar told me that The Discourse was still short of its goal. And there were also some regulatory issues that it had to deal with associated with the investments.  

During this time, The Discourse was also involved in discussions with the Canadian government about how to structure a plan to support local journalism across the country. “We didn’t succeed in moving forward in the way we wanted to there,” Millar said. 

In short, there were a number of factors that combined put the squeeze on The Discourse.

With all that going on, The Discourse launched its first membership campaign in May. Millar, in an email to readers, called it a do-or-die moment. “The Discourse is not yet sustainable,” she wrote.

It sought to sign up 1,000 contributors who would become monthly supporters. 

“Hitting this big milestone is a crucial step towards our sustainability and independence,” Millar wrote. “This won’t cover all our costs and so until we grow to a point where most of our funding comes from community members, we still need to hustle funding from value-aligned partners. (So. Much. Hustle.) We need you to help us hit our goal to prove to them, and to ourselves, that we’re providing a real service of value that is worth supporting.”

As May turned into June — and The Discourse’s campaign deadline approached — support was flagging, but a group of core supporters offered to run a matching campaign, matching up to $5,000 in donations. 

While it was able to convert many of its core readers, The Discourse needed to grow its audience and it struggled to attract new readers, partially because it couldn’t spend as much as it had planned on marketing due to the shortfalls. 

Even though more than 500 people signed up as monthly contributors, the campaign fell short.

“That means, at least in the short-term, we can’t do everything we planned,” Millar wrote in a July email to readers and supporters. “And so we’ve been struggling through some tough decisions about focusing our resources to make the biggest impact toward our ultimate goal: developing a replicable business model for in-depth local journalism.” 

The Strategy

Millar and The Discourse team decided to take the summer to figure out those next steps. 

Taking a cue from The Sprawl — which regularly takes breaks from publishing, and which we’ve covered here and here — The Discourse slowed down publication to assess what was working and wasn’t. It wasn’t much of a summer vacation.

The team dug through its audience data, it conducted surveys and user interviews, it restructured its audience funnel, and it examined its churn and retention modeling.

The Discourse also assessed earlier experiments it conducted around pricing and marketing that it tested across all three markets where it was running the campaign. 

“We [had] to slow down because we [didn’t] have the capital we need to continue publishing and producing at the rate that we we were,” Millar said. “We quickly realized that that gives us a little bit of the breathing room we need to do all the analysis that we have around this wealth of information that we got from this. Our whole organization…is well positioned to collect all the data, but sometimes where we fall short is pausing long enough to do the analysis and pull the insights from that, and then making sure that they’re informing our strategy.”

She continued: “That’s a culture piece we’ve had to work through because so many journalists are trained on these news values and to trust our instincts and gut about story selection. That’s absolutely valuable, but it can be difficult to let the data inform what we’re doing. We’re trying to find that balance. We’re often challenged by what we learn and what the communities really want. It’s not what always what I necessarily would have thought having came up through more traditional newsrooms…It takes some humility to implement a data-driven culture.” 

That analysis led to a decision: The Discourse would focus its efforts on just one community, the Cowichan Valley.

The Cowichan Valley site received the most support during the campaign, and as a result, it is the closest to profitability. In turn, The Discourse decided it would shutter the Urban Nation and Scarborough pilots to focus its efforts on the one site. 

Led by reporter Jacqueline Ronson, The Discourse Cowichan is reporting on issues affecting the community — including Monday’s federal election —  and also focused on reaching sustainability by the end of 2019. 

The goal is to grow The Discourse Cowichan’s audience, which it hopes will lead to greater support. To do so, it’s focusing on its email newsletter strategy. More on this in The Numbers, but it’s aiming to reach about 8,500 email subscribers, or 10 percent of the Cowichan Valley’s 85,000-person population.

In order to expand its audience, The Discourse has tweaked its editorial approach and has upped its publishing frequency. It has also revamped its website and updated its SEO strategy to make itself more Google friendly. 

The Discourse has also invested in paid digital marketing via Google search ads and Facebook lead acquisition ads.

“Investing as aggressively as we are is new…and it’s a great opportunity for us to continue to refine the product because we can constantly be testing different value propositions,” Millar said. “We’re constantly looking at the data around every single thing that we’re dputting out there.”  

This week, The Discourse is also planning to announce another pillar of its plan to support sustainable local journalism. Over the past few years, it has invested in building out its own tech stack. It’s also learned a ton about how to build and monetize audiences. Now it’s hoping to share that knowledge and those resources with other news organizations.

It’s creating a nine-week long boot camp with two soon-to-launch local Canadian newsrooms to help kick start their businesses as they get off the ground.

“The approach is essentially: Can we really rapidly test the demand for whatever that product is. Are those journalists’ instincts about where the gap is correct? Can we test that really quickly and kick the tires on all the metrics that show you have a pretty solid audience funnel so you can understand how you can grow and what it’s going to cost to get to that sustainable level, and then get them generating their first membership revenue as quickly as possible so they have something to grow from?” Millar said.

(The Discourse will have more to share on this soon, and I’ll update the web version of the newsletter when they do.)

The Numbers

The Discourse’s planned 2019 budget was $1.2 million Millar said in a May post. However, with the cutbacks, that’s since shrunk to under $1 million. About 60 percent of the budget pays for The Discourse’s full-time and freelance editors and reporters. (Again, these are all in Canadian currency.)

The Discourse said it had raised $1.3 million in investment capital since 2017. (For a more detailed breakdown on how The Discourse raised and spent the funds, check out the post.)

With the campaign this spring, it was looking to attract 1,000 monthly supporters with an average monthly donation of $15 per month. 

The Discourse got about halfway to its goal with more than 500 monthly supporters with an average of $11.64 per month, Millar said. 

“We’re doing pretty well there in terms of benchmarks,” Millar said. “That’s not bad for a small product. We’re not as comprehensive as The New York Times or something, so we can’t compare it to that.” (For more on benchmarks, check out this data from my colleague Matt Skibinski.)

The Discourse has six staffers, in addition to a couple of people contributing part-time back office help. 

The site did have to go through layoffs as it shifted strategy and closed two of the pilot sites. 

Still, Millar said she worked hard to ensure that nobody was caught off guard by the staffing changes. 

“We’ve all gone through terrible layoffs in other media outlets that feel so inhumane, but I think it’s fair for me to say everyone who has gone through [these] changes feel like they have some agency,” she said. “We had an open books policy through this period. Nobody was caught surprised.”

Millar and The Discourse have continued to look for other funding sources to support their work. The Discourse this spring, for example, was one of 11 Canadian news organizations that took part in Facebook’s accelerator program, which came with coaching and a grant to enable publishers to implement what they learned. (The Lenfest Institute has partnered with Facebook to run its American-based accelerator programs, but we had no involvement in the Canadian initiative.)

The Lessons

• Be transparent: We just covered how The Discourse has an open-book policy with its staff, but from the very beginning, it has also been open and clear with its readers about its plans and finances. 

That transparency was one of the reasons why audiences have stuck with The Discourse even though it didn’t meet its goals. 

Millar sent emails to readers who subscribed to the Urban Nations and Scarborough explaining why they would cease publishing. 

“I was expecting more backlash,” she said. “I was super scared as being seen as not following through on my commitment to these communities having pretty publicly made some statements about how we need more diversity in media.”

That backlash never came.

Only five supporters asked for their money back, and most of the people who reached out to Millar expressed support. 

Here’s an email one supporter in Scarborough sent Millar in response to her announcement:

“I’m glad to hear you viewing this ‘failure’ in Scarborough as one step on the journey of understanding a community like Scarborough. I stand whole-heartedly by the goal of pushing Canadian media to be more equitable and diverse, and I really hope to see a future iteration of The Discourse back in Scarborough. I work for the Toronto Public Library and equitable access to information is so important. Thanks for all the work you do for democratizing information access.” 

That person ended up increasing her donation. That, obviously, is not the norm, but it’s a sign that news orgs should not shy away from talking about shortcomings. 

Innovation requires risk, which inevitably will result in failure. By being open with your audiences about your success, struggles, and lessons learned, you can gain their support and trust.

• Focus on the funnel: The Discourse decided to focus its efforts on Cowichan because its conversion rates were highest there, meaning it was most successful in getting readers to subscribe to its email newsletter and then ultimately contribute money. 

“Our conversion funnel is really strong,” Millar said. “Once they’re receiving the product, they’re highly engaged in it, and those who are highly engaged are highly likely to become paying supporters.”

Newsletters, as a result, are a huge part of The Discourse’s strategy, as it has doubled down on the Cowichan Valley site. 

For example, it found that about 35 percent of readers who visited The Discourse website and read its email newsletters above a certain threshold each month became paying contributors. 

“There’s an opportunity to improve the value of our product to try and get more people in that category who are finding it really useful, who they have to open it everyday and really want to be using it.” 

About a quarter of The Discourse’s email subscribers fall in that audience, so it’s looking to move those readers to the paying category while also broadening the top of its funnel, or the total potential audiences. 

“That tells us we have the kernels of a really successful model if we can just grow the top of our funnel,” Millar said. “Can we replicate those results with a larger audience if we better resource our marketing efforts, improve at SEO, and are using all the tactics and tools that are available to us through digital marketing to put us in front of people? At least among our early small audience, they’re finding this really useful and they’re willing to pay for it.” 

No matter if you’re running a membership or subscription-driven newsroom, it’s critical to focus on how you can turn casual, infrequent visitors into frequent, paying supporters. 

• Re-think campaigns: The Discourse has historically approached fundraising through a typical campaign style. Two or three times a year, it throws itself entirely behind a drive to drum up noise and bring in revenue. 

One of its major lessons from this experience was that traditional drives are “totally exhausting,” Millar said. 

“Because there is so much happening, sometimes the campaign story gets a little bit confused,” she said. “We wanted to simplify that.” 

The Discourse’s research showed that readers wanted other opportunities to support the journalism, so the site is now going run smaller campaigns every four to six weeks. And instead of pushing readers toward monthly donations, it’s going to ask readers for one-time donations to support specific projects and help readers understand the actual costs of producing the journalism. 

It’s going to frame the asks in two ways: One way is by laying out a story it wants to pursue and ask for quick donations to help make the reporting possible. It will also follow up on major stories to ask for continued support that highlights the impact of the work. (Millar cited The Narwhal and Mother Jones as an inspiration for both approaches.)

It expects to generate 20 percent of revenue from the smaller one-time campaigns, while it will still run broader campaigns that bring in the rest. And Millar said she expects that the new strategy will help boost conversion rates for the bigger drive campaigns.  

“It’s our hypothesis that introducing these other campaigns will educate our audience about our business model throughout the whole process, so it primes them for the larger campaigns,” she said.

The Future

Moving forward, The Discoure’s primary goal is to prove that its model of reader-supported journalism is sustainable. 

As it prepares to leverage its platform with other news organizations, it’s hoping to build out a replicable model for sustainable local journalism. 

“The actual need for this is more clear every week,” Millar said. 

And beyond the initiatives I covered here, The Discourse is launching additional projects to continue to build out its model — both in Cowichan and elsewhere. 

With Cowichan it’s planning to create a mechanism for companies and other community organizations to support The Discourse. 

In the run-up to Canada’s forthcoming federal election, The Discourse is partnering with the Aboriginal Peoples Television Network to produce Set the Agenda, a collaborative effort that will use Hearken to help underserved audiences drive coverage. The project is funded by the Inspirit Foundation and the Facebook Journalism Project. 

“Our ultimate goal is to complicate political narratives with content driven by our communities, especially people who are too often ignored,” Millar wrote last month. 

Want to know more?

• Millar has been dutifully reporting on The Discourse’s own progress as well as sharing commentary on the state of the Canadian media industry. Everything she’s written is fascinating, and worth your time if you’ve made it this far in this issue. 

• Nieman Lab has also written about The Discourse’s shift in strategy. Here’s Christine Schmidt’s story from 2017. 

• Want to know more about the proposed Canadian media bailout? Here’s a CBC story outlining the government’s proposal and some questions about it. For more, here’s a piece Millar wrote in March outlining some of her concerns with the proposal

• Last year, I wrote about ProPublica’s approach to its year-end fundraising campaigns.

• Finally, I wanted to point you toward a piece Matt Skibinski published last week looking at the two metrics newsrooms should care about as they think about the value of their coverage in terms of driving subscriptions and ad revenue. 

Anything to add?

How has your news organization approached campaigns? Has there been coordination between the newsroom and revenue or marketing teams? What did that look like? 

Also, I’m thrilled to share our next Solution Set Book Club read: There’s No Crying in Newsrooms: What Women Have Learned about What It Takes to Lead by Kristin Grady Gilger and Julia Wallace. 

We’ll be meeting via Zoom call on Nov. 25 at 1pm EDT. Our host is Anita Zielina,  Director of News Innovation and Leadership at CUNY’s Newmark Graduate School of Journalism. Join us! More details at newsbook.club

See you next Thursday!

Photo of Discourse Cowichan reporter Jacqueline Ronson is a screenshot from this YouTube video.