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Citizen Media Business Issues: Donations

 (This is the seventh in a series of postings about citizen media business issues. See the introduction here. All of these entries are considered to be in “beta” and will be revised and refined as they find a home on a more permanent area of the Center for Citizen Media web site.   To that end, your comments, additional examples, and criticisms are welcome and will be invaluable contributions to this process.)

Call it a “tip jar” or whatever you like, but citizen journalists should not rule out getting donations as part of a business model. This generally involves a form on the main page (or every page) of your web site that allows readers to donate however much they think your journalistic efforts are worth.

Other than requesting that readers send checks through the mail, use of PayPal’s “donate now” buttons is perhaps the easiest way to allow users to give.  For example, Ed Cone uses this by way of a subtle “help a brother out” donation button on his blog’s sidebar.  Because of its simplicity and ubiquity on the internet, readers may be more inclined to donate if you make it easy for them with a PayPal form. Money you receive from donations accrues in your online PayPal account, from which you can request a check or have it transferred to your bank account.  For the service, PayPal charges a transaction fee of $0.30 plus 2.9% of the amount received.

On his blog Among the Trees, Environmentalist Eric Baerren uses not just a PayPal donation button but also a banner from Blog PatronBlog Patron is similar to PayPal in that it’s a money transferring service, but instead of the range of services PayPal offers, Blog Patron’s primary feature is the “recurring donation.”  The site manages people’s donating, allowing for contributors to set up a repeating schedule of donations.  For those who give to one or more organizations on a regular basis, this is a useful organizational tool.  More importantly, by providing people with the option to repeatedly donate, it has the potential to bring in a steadier revenue stream using the same logic as a subscription system (for more information on subscriptions, see this earlier post). Blog Patron charges a fee schedule that tends to be a little higher than PayPal’s: $0.25 per transaction plus a flat 4.5% transaction fee.  Also, Blog Patron only accepts credit cards (no bank transfers or transfer of funds already in your Blog Patron account).

For those with a specific monetary goal in mind (or an arbitrary estimate of how much you’d like to raise), ChipIn provides a free widget that displays the cliché fundraising thermometer along with information about where the money goes, number of contributors, percentage to goal, and the contribution deadline, if applicable.  It also allows you to enable supporters of your cause to display your widget and raise money for you.  Sam Mayfield and the Center for Media and Democracy have a blog that covers their trip to Ghana to help the area’s first and only community access television station.  They display the ChipIn widget prominently to raise money for travel and equipment costs.  ChipIn doesn’t actually collect the money, but rather redirects users to PayPal for payment (standard PayPal transaction fees still apply).

Earning revenue through donations can be difficult, especially if you fail to consider carefully the presentation of the solicitation. On one hand, aggressive or sloppy solicitations can look unprofessional or greedy.  On the other, if the link is too subtle, people might not notice it or think it important. Remember that your number one priority is to gain and keep readers. If you provide a quality service, you may be rewarded.  But if you pester, panhandle, or ask for donations while at the same time bombarding users with advertisements, you may turn many people off.

Creativity in your presentation goes a long way. Michael Fortin has a tip jar in his blog’s right sidebar with the text “Enjoy this blog? Buy me a coffee or a drink. May I suggest a venti Starbucks dark roast coffee for $3? Or choose any amount you wish to tip” and a link to donate via PayPal. This friendly, no-pressure approach to soliciting donations may prove valuable to many.

One of the most successful and unique applications of the donation system can be seen at OhMyNews, a South Korean news site with the motto “Every Citizen is a Reporter” (note: the link is to the English version).  With the vast majority of its content coming from citizen journalists, OhMyNews reimburses writers of articles that meet certain standards.  On top of this reimbursement, contributors are able to receive tips from appreciative readers.  According to Don Lee of the LA Times (courtesy of Global Tech Forum), “Kim Young-oak, a Harvard-trained classics scholar, holds the record: More than $30,000 poured in after he wrote an article questioning the logic and wisdom of moving the nation’s capital outside Seoul.”  To keep the site going, OhMyNews keeps a portion of the donations.  In a recent talk at UC Berkeley (as covered by The Tyee), founder Oh Yeon-ho mentions that content-related income accounts for 20% of the company’s revenue. 

Another possible approach is to ask for donations instead of displaying ads and make it clear that donations are what makes it possible for the website to run ad-free. Whether you use this method or not, describing exactly why you ask people to give and explaining where the money goes—in other words, transparency—is key for building trust, which is necessary in matters of money.

Suggestions

  • Do explain to readers exactly why you ask for donations and where their money will go whether hosting fees, travel expenses, morning coffee, or even reimbursement for time spent.
  • Do be careful not to appear greedy by asking for donations amidst an assault of other advertising.

  • Do be as creative as possible in your methods.  As seen in the example of OhMyNews, a donation system can even add value to the reader.
  • Don’t pester your readers by hounding them for donations or trying to make them feel bad for not donating.

 

(Ryan McGrady is a new media graduate student at Emerson College where he is studying knowledge, identity, and ideas in the information age.)

1 Comment on “Citizen Media Business Issues: Donations”

  1. #1 Making money from journalism: new media business models (A model for the 21st century newsroom pt5) « Online Journalism Blog
    on Jan 28th, 2008 at 1:34 am

    [...] is a very powerful currency. One option (if not too injurious to publishers’ pride) would be reader donations. Readers may be more inclined to support journalism they believe in, such as a particular [...]