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Transcript of Mission & State's Final Meeting
updated: Jul 31, 2014, 8:00 AM

Local media didn't trust Noozhawk's editorial management of the investigative news website

By Alex Kacik

[Full Disclosure: I was a Mission and State staff writer. It was an honor to help create this public service and to work with a group of passionate and talented journalists. Thank you to those who supported us.]

The in-depth journalism website Mission and State will stop publishing stories in about a week, Ron Gallo, the executive director of the Santa Barbara Foundation, announced July 22.

The Santa Barbara Foundation hosted a public meeting two weeks ago to discuss a change in editorial management that took place on June 1. The Mission and State Advisory Board hired Noozhawk to assign, edit and publish stories after the board voted to dissolve and the Miller-McCune Center handed over fiscal sponsorship to the Santa Barbara Foundation. After the meeting, the Foundation and Noozhawk decided that it would be best to return the $300,000-plus remaining funds to the Knight Foundation.

“The current management arrangement with Noozhawk did not have sufficient support among potential media partners for it to have a reasonable chance of widespread collaboration,” Gallo wrote.

Former Mission and State Advisory Board members attended the meeting along with representatives from the Miller-McCune Center, the Santa Barbara Foundation, Casa Magazine, The Santa Barbara Independent, the Pacific Coast Business Times, KEYT, Edhat, the Fund for Santa Barbara, the Bower Foundation and Noozhawk.

Here is a transcript of Tuesday’s meeting:

Ron Gallo: “I want to spend about 10 minutes going over the timeline of this venture, make just one point or two about making grants to a for-profit entity and get into the core of the agreement that we have struck with Noozhawk to be the vendor or manager of this project for its next iteration.

This started all about three years ago when some of this people in this room, there are a few who are very committed to in-depth journalism who became aware of the Knight Foundation, which is a national foundation’s program to try to bring back in-depth and narrative journalism throughout the country. The reason why was because, in their estimation, that that kind of journalism was disappearing throughout the country if for no other reason than how expensive it is. Very few papers can carry that kind of journalist around if they will only publish one or two stories a year because many of their stories don't come to fruition so it’s a very expensive enterprise. Knight offered to work through community foundations to see if new models could be developed to bring this back. Very little in the way of what that meant, they wanted to hear creative solutions. This group of people in our community approached the Santa Barbara Foundation—it was not our intention to get involved—and convinced us on the merits that we should sign this application and send it to Knight and see if we could get one of those matching grants.

I’m skipping over the fact that we and three other foundations provided them a planning grant and I think they did an outstanding job in doing research and coming up with a model we felt proud to submit to Knight.

In the second go around, we were awarded a grant. Totally, Knight has awarded 100 of these grants. Now it was our responsibility to raise the matching grant, which had to be $250,000 each of the two years. It was and all or nothing thing, it wasn't that you could get $200,000 from the community; you had to get the full match. When we went back to the funders, we found that there was very little support for that match. We were a little surprised by that, but that is the prerogative of philanthropy. So we had really two options, one was to say to Knight that we cant do this and return it back to the community; we chose the second option, which was to try to revise the proposal to make it in a sense more appetizing to local funders. Some of the feedback we had gotten is that if we had an advisory committee that perhaps had even deeper expertise in journalism, people might take a bet on it. I say this very carefully because I think the original group of people who put this together had a great deal of good experience, but we were in that position of having to meet the market, if you will.

We made some revisions, we downscaled the proposal that was sent off to Knight. They were fine with that proposal, basically saying what they said to almost everyone—continue to experiment, we’re really in a learning stage ourselves. We went out and we were able to raise money to get things started. I have to complement staff of the Santa Barbara Foundation, some of the people in this room who are donors like Jerry and Scott and others who put the money together to give us that vote of confidence. Then we got into starting Mission and State. We worked with the McCune Foundation because Sara had come on to the advisory committee and between Steve Ainsley, Jerry Roberts and Sara McCune we had 150 years of journalism experience on that committee. With the fiscal sponsorship provided by the McCune Foundation, we went off and hired an editor, a site was created and stories began to happen. About the end of last year, we realized last year that the sustainability part of this was not working as well as we wanted it to, that the site while somewhat collaborative wasn't going to be as open architecturally as we hoped.”

[Editor’s note: The project came under budget in year one and was operating well below the allotted budget for year two. Mission and State had an arrangement with the Sentinel and Casa that placed stories in those publications on a nearly weekly basis. Casa published our work in English and Spanish. We were planning to put the entire Mission and State/Casa collaboration in an archive available on both websites. Mission and State placed several significant stories with Noozhawk and The Independent and planned to continue collaborating. We shared stories with the Pacific Coast Business Times and were exploring further investigations into stories of mutual interest. On Edhat, our stories were among the most frequently posted and commented on. Mission and State reporters made several key appearances on KCLU during my tenure. Mission and State had an ongoing collaboration with KDB and had one with KCBX and KCRW in the works. We also held community-based, well-attended forums on homelessness and pro bono legal services with Antioch and worked with Brooks Institute and UCSB.]


“We [the Advisory Board] made the decision that we had to do some kind of radical option here, this was not going to last. We were up to about $600,000 of the two years and with the clock running. The decision was to let go of the editor, Joe Donnelly, and the staff. By the way, I just want to insert that Joe did a very honorable job, he’s a man of principle, it just didn't work with the vision we put together. It was at that time, we entertained a proposal from Noozhawk, who had been very collaborative with the process and had been interested in this type of work, to be the vendor, the manager, provide the infrastructure for the project to go forward. Right away, the committee entertained it. It was generally well-received but immediately questions came up around this being unusual—working with a for-profit as opposed to a nonprofit. We need to get some things really nailed down if this is going to happen. Fiscal sponsorship needed to be at a much higher level. There needed to be a clear segregation of Mission and State from the parent company. And there has to be the pursuit of the charitable piece of this very clearly, in this iteration. That got vetted out with Noozhawk, who was very happy to respond to those questions. I want to be very honest and transparent about this piece, along the way from that point we did review a couple of other proposals that came forth and they had merit, both of them. One from the member of the advisory committee, another from the McCune Center, which in turn had done some research on fiscal sponsorship and found for a private operating foundation to become a fiscal sponsor in a case like this is probably not the best thing. There’s a higher risk of liability and things of that sort. Option two would be the Santa Barbara Foundation become the fiscal sponsor, or three, the McCune Center could take over the entire project. We were not in total agreement, there were those who preferred to stick with Noozhawk, there were some who liked the McCune proposal, and the Santa Barbara Foundation chose to stick with this particular option for two reasons—one is that we felt this had the best chance for sustainability. I had written back to all the funders before we signed any deal telling them we were going down this road and if they had any questions or concerns. I spoke to a few of them, most didn't respond. They seem disposed that this seemed like an option we could look at. People asked me since then, some of the same funders, ‘Should I support this?’ And I told them personally, ‘Not yet. Give it six months. See if it is serving the community the way it has said it would and if you feel it has merit than support this, if you don’t then you shouldn't.’ This is an honest attempt to try again, to try to experiment with this very difficult concept of broad-base journalism.

I will take a quick departure and discuss the nonprofit [end of this]. It is unusual and many people are at least questioning about that. It’s totally acceptable and legal, according to IRS laws, all regulations for a foundation to be a for-profit partner as long as the end product is charitable. Last year many of you know we were involved in trying to rescue the Neighborhood Clinics. A very important piece of that was first to do a consultancy that would form a 100-day plan. We had a task force, we had an advisory committee that included people like Fred Gluck and Ron Werft and Kurt from Sansum, they recommended an excellent health care consultant that we went with. I mention that because people have asked why we don’t do an RFP for the balance of the funds. RFPs are done sometimes but I’m using this example to show that at that point when we needed that consultancy we relied on the wisdom of our advisory committee, we didn't do an RFP for all health consultants from Seattle to San Diego. Sometimes that's the right road to go, in this case we didn't. There have been lot of conversations between some members of the advisory committee and some members of the media and there wasn't a lot of interest from that kind of informal contact for anyone who wanted to step up and do this or from another for profit media. So we went with this option.

First of all, there is a balance of about $300,000 or so funds. We have not given, let’s just call it $325,000 or $350,000 to Noozhawk. What we have done is crafted a very careful fiscal sponsorship, where their first payment $67,000 includes a management fee, that I would consider pretty modest, has a little bit in there for operations and infrastructure. The balance of the funds, the majority of the funds in this grant—and this is always what I think was missed—was available to pay other media to generate stories to get credit for the stories, to publish them in their own newspapers first and to become apart of the Mission and State site. This is really what it was supposed to be about from the beginning and that was not fulfilled in the first iteration.

[Editor’s note: Michele McLellan, a consultant to the Knight Foundation, told me —“The idea of setting up a fund to make reporting grants seems very far away from what Knight had agreed to fund - an independent nonprofit news organization.”]

So part of today’s meeting I hope can be an invitation and some creative thinking about how people might access not just the funds, but become a participant in this. Why a fiscal agreement, beyond the memorandum of understanding? We wanted to monitor the segregation of funds and whether the mission was going to be implemented correctly by Noozhawk. Not by saying, ‘Here’s the $350,000, go out and do good.’ But on a quarterly basis, having to submit reports, there will also be interaction with an advisory committee that is reconstituting at the moment. There were some who went part of the way on the journey and others who are in this room today who are not going forward with us. And some that have left like Steve Ainsley, because God, did that guy do a lot of work on this and he wants to retire.

What I learned after being in this business for 20 years actually, this issue of when you give to a for-profit, a private foundation and a donor-advised fund would have to exercise something called expenditure responsibility, which is a very high standard. It means if we give a grant to a nonprofit and they do something bad with it, it’s really not the foundation’s problem, its between that organization and the IRS or the attorney general. That’s kind a safety valve for private foundations. Public charity, which is what the Santa Barbara Foundation is, actually does not actually have to even do that. Having said that, we’re holding ourselves to the standard as if we were a private foundation or donor-advised fund.

Finally, the core elements of the MOU and fiscal sponsorship. First, the term is one year and actually when maybe Bill will incorporate this into his comments, they are seeing themselves as the custodian for us as a vendor or manager for the next period of time. Maybe it gets into such great shape because it becomes important to the people of Santa Barbara County that it gets to a third iteration. This is an experiment away from Noozhawk, maybe to a nonprofit, maybe into it’s own organization. We don't know. But that's why it’s just the one year with a quarterly report and if they’re not meeting their obligations before a year, we will have some discussions about that. Our goal is to make this happen. The objectives are to…there are five bullets there. I think probably the most important one is the last one. It’s their obligation to collaborate with existing news media, partner and not as a competitor, Noozhawk will reach out to local news media soliciting and proposing story ideas that the individual organizations can undertake with their own journalists and formats, paid on a freelance basis for Mission and State, each originating organization can break such stories with an understanding that afterword they will appear on Mission and State and be offered to other interested media with appropriate credit.

That’s the skeleton of it, it's a three-year story I’ve tried to condense. I’d like next for Bill [MacFadyen] to talk a little bit more about what he’s doing, what his intent is and how he’s going to work hard. And remember we’re in day 47 of this agreement and the last month we’ve been working a lot of this meeting so I want that to be apart of the context.”

Bill MacFadyen: “Thank you all for coming to give us the opportunity to talk about this project. Noozahwk is about eight years old, we are a startup. One of my partners Tom Bolton and I are familiar with startups, we had one that failed, we don't want this one…we don't want Noozhawk to fail. That has given us a perception on familiarity with startups and that whole concept. Mission and state was a tremendous opportunity for journalism nationally. But more importantly, we viewed it from the beginning as very important for Santa Barbara historically. It's a tumultuous time in journalism, but it’s an extremely exciting time because of the technology and the culture and the way things are moving so quickly is getting news organizations who can adapt to this new model a tremendous opportunity to actually do more, it’s just very messy right now.

When we first looked at Mission and State a couple of months ago, we identified four areas that needed to be addressed. The initial concept always was a strong one, it was a brilliant idea, it was a little ragged on the execution but most startups are that way. That's just a fact of life. So with Mission and State we saw for opportunities and challenges—one, we needed to increase the volume. It’s a web-based organization and the Internet has a voracious appetite, it has to be fed all the time. The worst thing that any website can do is have content on there that's a day old, two days old a week old. That's a lifetime in the Internet. Second, we needed to raise the visibility of Mission and State because with the exception of media in Santa Barbara, virtually no one knew what Mission and State was. In fact, two weeks ago a lady asked about State and A, something that hasn't been around for several years, that consistently is something that's raised. To do that, Mission and State as those of you who have websites know, it takes a long time to build a following a base on the Internet. So we had to figure out a way to get the word out about Mission and State and use existing opportunities to do that. The third thing was viability. Obviously, $350,000 for those of you in business know, doesn't go a very long way. It sounds like a lot of money, when you get right down to the budget, it’s not that much at all. So we needed to make the case to the community and the funders both locally and nationally that this was a viable project and we’re continuing to be funded. The fourth piece, and this is the most important but it’s also critically important for the other three pieces, we needed to have collaboration. What I’m talking about is true collaboration with professional news media in Santa Barbara County and by using them and their organizations and their audiences in their existing publications, that is the way to get Mission and State out into the community.

For the volume, Noozhawk inherited one reporter, Josh Molina, who is an experienced investigative reporter in Santa Barbara. He has been here off and on since he started his career here. What we have Josh doing is focusing on stories that are in the current contemporary news cycle that have a connection with the community, but rather than report those stories as daily stories and compete with existing news media, we’re having him take deeper looks at that particular issue that it’s furthering the community’s awareness and education on the topic but not getting in the way of Noozhawk, or the Santa Barbara Independent or the Montecito Journal, or other news organizations and their daily work.

For the visibility, if we ask our partners—and I’m thrilled to have Mark Danielson of KEYT here—if we ask our partners to come to Mission and State with some ideas for some stories that KEYT or the SB Independent or any other organization in the county wants to do but cannot do on a regular basis because let’s face it, none of us have the resources, time or the staff to do in-depth pieces. If they come to us and say ‘we really want to do this,’ Mission and State has the money to hire that organization to do that story. We think that is a critical component of this plan to get Mission and State noticed in this community and make its presence felt. Because if that organization understands it’s their person already doing that story and they’re already paying them and that organization is controlling that story to the extent that it’s being published and promoted on their site or medium, that gives them skin in the game. That leverages their reputation and their audience and all the positives and elements they have in their everyday community, that enables Mission and State to get the word out and get Mission and State content exposed to a larger audience.

The viability: We believe Mission and State just doesn't have a portfolio that we can go out and “sell” to a foundation, to a funder to provide ongoing support but we believe in six months or so we will have a body of evidence published on Mission and State in a collaborative work with many other news organizations, that we then can go to funders, sponsors, foundations and say ‘this is what we did, this is how it’s going, here are our metrics, we believe this project is worthy of having additional funding sources.’

For the collaborative piece, we believe we’ve come up with a couple of processes to address most of the news organization in SB County. By no means do we have the answer. Again, we’re pioneers and this whole project is a pioneering project. We’re excited about figuring out how this is going to work, but we believe, my partners and I, Kim Clark and Tom Bolton, we have a formula that if it were coming to Noozhawk that we would look at it and say this is a valuable thing, we see how Noozhawk would benefit in this scenario. So if it’s a larger organization like KEYT that has a sophisticated...KEYT obviously has the largest news organization in Santa Barbara County, they are comfortable managing projects and staff. We propose that Mission and State would hire KEYT to provide content for Mission and State. We’re using their journalists, they’re going with the material first, but they’re also sharing that material with Mission and State. We know the kind of stories they will be reporting on have an audience, will be promoted properly and will get spread across the community. That all benefits Mission and State but it also benefits the organization because they are getting compensated for their time and their work and they are getting a story out of it. Smaller organizations that may not have the capability to manage a project, we’d propose those organizations would come to Mission and State and say ‘We would like to do XYZ, maybe we don't have the resources but Mission and State could undertake that project on behalf of the organization.’ We feel that’s an equitable way to spread the opportunity around and not have major impacts on that organization outside their general scope of business but still enable them to play. We are in the transition from the previous organization into having our management of it has been bumpier than we expected, so we’re just now starting to look at the website but we’re just now starting to actively promote our partners on Mission and State website, give them more of a presence on the site and begin to promote their stories on Mission and State so it’s more of an equitable partnership. We believe that over time, that we will be able to prove to people in this room and the community and funders that this is a project worth supporting, it's a brand new concept for Santa Barbara but it’s a brand new concept for the country. We always believed that if any community in the country can make this work, it’s Santa Barbara. We have a record in this community that stretches back hundreds of years of doing innovative things in response to particular opportunities and the wonderful community we have today is a direct result of that. We see this as a piece of that, we’re excited about this opportunity and we invite all of the media to participate. Give us a shot. If it doesn't work, that’s fine. But we want everybody to participate because we believe that that is good for Mission and State and good for the news organizations.

Tom Bolton: “One thing I would say as the editor, it’s all about the journalism. Many of us in this room have been involved in in-depth journalism over the years. It’s one of the things we love to do, it’s been increasingly difficult for many of the organizations and all I can say from the journalistic point of view, that's how I’m approaching it, that’s how we’re approaching it, we think it will work the best if we have the largest amount of partnerships and cooperation from folks. Some people may decide it’s not their thing, it doesn't work for them, we respect that. We believe that we’re trying to do as develop Mission and State as an institution, not as a destination website and hopefully we become a destination site eventually, but the point to me is to have Mission and State known in this community as an institution that creates high quality in-depth journalism that has impact. It’s not an easy vision, but it’s one we’re fairly confident we can complete and be successful with and it will be easier to do with your help.”

Then, the meeting opened up to questions from the audience.

Commentary from former Mission and State Advisory Board member Dick Flacks: “We value the several hundred thousand dollars that remain, its very precious to hope that will be used to fulfill to some good degree what we hoped from the beginning to happen here. But I’d like to say some things for the reflection of everybody about what has transpired, at least the way I see it.

First of all, what Tom Bolton just said was probably the best thing I’ve heard thus far. He said, ‘The journalism is crucial, not websites.’ I want to add is the key word we had was not narrative or in-depth, but investigative journalism. All of the three words are important but that seems to us to be a priority. And that’s connected to the need for citizens to be informed so they can take action about the instutions of government and others in the community. So narrative stories that reveal human conditions, they’re great but if there has to be a priority investigative journalism about the operations of institutions is the goal. That's a problem I think weve learned. How many of the funders of philanthropic organizations want investigative journalism? I don’t think that’s answered yet. That may have been part of the problem in defining Mission and State and in fact the whole Knight national project depend on community foundations that depend on donations of wealthy philanthropic institutions and persons. I think the Santa Barbara Foundation has to make it clear what is obvious but probably not to the donors, that investigative journalism happens that may step on shoes or may be damaging that's not the Foundation’s responsibility. The responsibility was to create this journalism which Thomas Jefferson was essential to the future of a democracy. [Ron Gallo] you’re nodding but I don't know that kind of framework exists yet nor did it exist. Part of why I’m saying that so vehemently is this group never intended to govern the entity. So the idea that we had to be replaced doesn't ring true to history but it rings true to politics. There are people who wouldn't want to fund something that I was in charge of. That’s why I never wanted to be involved in any governance of this on controversial people who think I’m a Lenninist socialist. Lenninist maybe but socialist no,” Flacks jokes. “I think being attentive and not covering up what those difficulties are crucial. And being watchful, which is what we’d do with a privately owned newspaper. We’d be very watchful that decisions about content are not governed by what wealthy interest might be hurt by this, that will damage those donations. This is a tough problem that has to be dealt with.

Secondly, the proposal outlined here is exactly what we started with before the Knight Foundation. Mainly, let’s get a full-time investigative journalist going in this community and let’s connect it to a particular media outlet with an independent role. We decided from the outset that The Independent, which I’m proud to say I have a long history with, we thought that was best example of independent journalism with a track record in the community. We thought we had something developing along that line. We were told by some people in the room, if you expect donations or foundation support you can’t have a profit making organization as your outlet. But secondly you have to think much bigger than a single journalist operating. It’s a source of historic irony that we’re back to pretty much the starting point but with a different competitive outlook. I don’t understand, with all the good intentions that Noozhawk has, how it can also be the center or distribution point for competing journalistic enterprises. That obviously has to be worked on.

Finally there’s another key word, and it isn’t about hiring another media to do reporting. The word, which sounds good to socialists are collaborative journalism, the recognition that the new world is not one in which competing interests can do the best job. Maybe the new model has to be mutual collaboration among the various media in a community accomplish some shared goals even as they have some differences. Even when you use the word ‘hire,’ that doesn't sound collaborative to me. It doesn't sound like the right spirit and I don't understand why there isn’t in this design a separate body, independent and trusted, that will allocate the grants and make the decisions about who else can be encouraged to do this kind of journalism. I don't know if that was considered in this, but it doesn't seem to me good for Noozahwk, the Foundation or the project as the whole to have Noozhawk as the responsible agent for the totality of this.”

Question from former Mission and State staff writer Alex Kacik: “What was the Knight Foundation’s reaction to this change in editorial management?”

Gallo’s response: “They’re taking a wait-and-see attitude. We talked with them first. They were saying, like they’ve said with a lot of other people, that this is something that we’ll be watching. They wanted documentation about it and we sent them that. They were alerted by others that maybe this was a little out of the ordinary, we’ve dealt with that as well. I would say they are neither doing jumping jacks or particularly alarmed. They funded 100 programs, they stuck with four. They are doubling down on four, the other 96 for all different reasons have run into issues. We ran into issues. As I keep saying, it’s a continued experiment.

Question from Joe Cole of The Santa Barbara Independent: “Can you go back to your comments about you checked around with other media and people didn't step up?”

Gallo’s response: “What I’ve learned is that members of the advisory committee had conversations with several people with the community and media outlets when the Executive Editor Joe Donnelly left and no one came forward and said ‘We’ll do this,’ or ‘We have an idea.’

Follow-up from Cole: “My question of the media here is were you contacted about submitting a proposal to manage of Mission and State.” Everyone said ‘No.’

Macfadyen’s response: “Actually we weren’t contacted either.”

Comment from Mark Whitehurst of Casa Magazine: ”I’d like to dovetail on Dick’s comment because I’m here because of the word collaboration. We talked about the RFP and what Joe was referring to is we weren’t asked. We felt very engaged in the project. We participated, we ran 26 of the articles from Mission and State but no one came to us to ask what we think of a for-profit managing a nonprofit. We put a lot of ink into the project and we like it and we would like it to continue but we’re not comfortable with the for-profit aspect. It’s no reflection on Bill or his operation whatsoever. He does a good job. My observation is the advisors were wonderful but none of them seem to be owners of any of the publications in town. Whether it was electronic or print, yet their great wisdom didn't provide the collaboration that would’ve made this a smoother transition.”

Comment from Sue Foley of Edhat: “I just want to say we were an early supporter of Mission and State, probably the earliest. We have the highest online readership of any media outlet in Santa Barbara. We heard nothing about it until it was a done deal. I think problem with this sort of collaboration there has to have been some collaboration to gain the trust of all the people in this room and I’m not feeling that comfortable with it. I guess I would like to know how was this all decided? I heard your explanation for not having to go out to big, but did you go out to bid or poll media outlets?”

Gallo’s response: “I think that’s been clearly responded to. No there was not an RFP. There was not a going out to other outlets to see if they would want to be the manager of this.”

Foley’s follow-up: “Do you see this as a problem going forward?”

Gallo: “To be really honest with you…I want to separate the best scenario that could’ve happened from this being some dark deal. This was not some dark deal. Could it have been a more open process? Of course looking back that could’ve happened. But we had no indication from the advisory committee that there was an appetite for that. Was that maybe the wrong judgment? Perhaps so, but it is not always the practice. I’ll use one other example, we got a great proposal last year from a hospital in Santa Maria to convert the residency program. We didn't respond to that and say we need to do an RFP to every hospital to see if they want to do this. Bill said he wasn't contacted, he’s right. He was aware of what had happened and offered a solution that the advisory committee thought was credible enough, down to a person, to pursue it. As I said, did some issue evolve around could this happen? Was there different levels of comfort about the final decision? All of that is yes. But that is not out of the ordinary of the way grants are often made.

Some people want to see the minutes and what was said and financials. There wouldn't be a nonprofit in this county that would apply to the Santa Barbara Foundation if they knew their financials were up on the website, if they knew what every person on the distribution committee or board said about that application. This is not government. We want to be open, we’re having this meeting to ask how we can go forward and make this even better. There is an opportunity here to correct some of the wrongs. I want to say this carefully: For two years we were struggling to get Misison and State, I don't know if we could have had a meeting of this many people for two years on any aspect of it. And that wasn't for a lack of trying. But now we’ve had this situation and if anything good can come out of this it’s for people to stay engaged. And not make a summary judgment today that we’re just not going to let this thing happen. If you do that, in a way I’m sure you’ll ‘win’ because this can only happen through engagement. But if it's given some change to breathe, we’ll all know in a few months whether this is a viable model or for the reasons stated, it is not.

Comment from Marianne Partridge of the Santa Barbara Independent: “First of all I want to thank our senior member here for his Lenninist comments. For me, I’m a capitalist. So don’t be bitterly disappointed. I want to say, when this first started I spoke to numerous people about this when you had just hired Joe and I had questions about it. I later discovered they were similar questions to my other colleagues in town on the viability of such a plan, which I think it’s original intent was to be investigative journalism and to push the quality of Santa Barbara journalism forward. At that time, I was told by you, Mr. Ainsley, Sara [Miller-McCune], under no circumstances could a for-profit publication participate in this. They could use what Mission and State provided, Steve said there was going to be a small amount of money that might be applicable. In no time during the [nine] months that Mission and State operated under Joe, did that ever come up. We did publish a number of stories from there, we tried to do some with Joe that didn't work out because of our own deadlines, other issues. But in no time did I ever think that I or any other publication thought they could come forward. Bill apparently was not told that, that it could not be a for-profit publication. So as a result no for-profit came forward. I think that must be the reason you feel that you had no participation because none of us considered that seriously.

The second thing, I don't understand how this organization, I’ve had a good talk with Bill who I think is a sincere person, but I don't understand how in a competitive market, which is exactly where we all are, giving the control to one of our competitors without any involvement from us. This is really setting the cart far before the horse. Now to expect some kind of collaboration is a very difficult process for me to understand. Where would it be valuable for the individual papers? Had this been put forward perhaps under a complete change of plan, we can really have what I think would be truly experimental but I don't see anything cutting-edge, new, radical or experimental in this. I think it could be of course. These are very capable journalists, it’s not a question of that. It's a question of a community. There’s no community aspect of this whole process.

Macfadyen’s response: “Marianne, what we’re trying to do is convince our colleagues in the media to participate in this and make this a community opportunity. What we’re proposing is that the Independent in this case could do that story you want to do that you don't have the time or resources to do on a regular basis. And it’s still you’re story…

Partridge: “Why wouldn't we go under the very proposal that Mr. Flacks just made a few moments ago? The idea of having all participants in this community make our pitches…

Macfadyen: “What's stopping you?”

Partridge: “You are going to take this $350,000. How are you going to continue to raise your money? Why wouldn't we have an impartial person do this?”

Macfadyen: “If you, representing your organization, have a stake in the game, and you want to make sure you're doing a story that your organization can get behind. Your audience that you already have both print and web, you know they will be interested in that story and you’re getting compensated for it why wouldn't you do that?

Partridge: “We’re doing those stories now.”

Macfadyen: “Good for The Independent. I’m not sure if everyone in Santa Barbara County is doing that on a regular basis. But still, even if The Independent is still doing it, wouldn't you want to do more? So what is stopping you from participating? I’m really at a lost to understand that.

Partridge: “We’ll maybe I’m the only one who feels that way.”

Whitehurst: “So Bill you’re suggesting we pitch you the story…”

Macfadyen: “Mark, here’s the deal. For bigger organizations like The Independent, perhaps we can hire them to collaborate, Dick, so they can work into their regular mix over the course of six months or a year, however they budget, so that they can do those long-range projects. But for a smaller organization who may not have the resources to do that could pitch Mission and State for a project that Josh Molina or a freelancer that it hires could undertake for Casa. What’s preventing you from doing that.”

Whitehurst: “The general concept of going to your competitor and pitching a story…”

Macfadyen: “You guys are all saying we want a collaborative environment and here we’re trying to make Mission and State collaborative and you are continuing to call it a competitor. I don't understand that.”

Foley: “But you are not Mission and State. Aren’t you Noozhawk? How can you separate that identity?”

Macfadyen: “Noozhawk was hired to manage Mission and State. So Noozhawk is certainly a competitor to anyone who is selling ads. Of anyone who is selling ads, Noozhawk views that as a competitor. But Mission and State is the neutral party. And if Mission and State could collaboratively work with Noozhawk, and the Independent and KEYT and Casa, then Mission and State is fulfilling it’s own mission and doing community collaborative journalism.

Nick Jackson from Pacific Standard: “What percentage of the funds that are set aside in this pool to go out toward collaborative community journalism do you suspect Mission and State will award directly to Noozhawk?”

Macfadyen: “Wait, what was the question?”

Jackson: “The same way you want The Independent to come to Mission and State and say we want to do this report, can Mission and State fund this project that will be part of a larger Mission and State brand, live on Mission and State’s site and be distributed to all community organinzations, how often is Noozhawk going to go to Mission and State and Mission and State will say we want that story, we’ll write you a check.

Macfadyen: “To be honest, we would love to do it all. We don't have the staff size for that. That’s why we’re talking about utilizing all of the other media that already have a much larger audience than Misison and State. Noozhawk can’t do this.”

Bolton: “Let me see if I can answer this in a different way. The answer is, as little as possible. It’s a hardship for us to do this because I have to find a way to backfill that and it’s very difficult. It’s a legitimate question and I think the bigger question here is a legitimate question too. We’re saying ‘Trust us,’ and you’re saying ‘Why should we trust you.’

What I would ask everyone to try to embrace is let’s just give this a little try. Ron has indicated that we have this charge to manage this project for at least several months. It’s in our interest to make it work. It’s in my interest to figure out to get a way for you Nick [Welsh] to write for Mission and State. It’s in my interest to get some of Mark [Danielson’s] folks. Where we’re stuck here is we’re saying ‘Trust us’ and you’re saying ‘We don’t necessarily trust you, even though you say we’re good guys or whatever.’ To me the answer is, let’s give it a try for a few months. If we’re screwing it up, if we’re self-dealing and doing all that you’re going to have a pretty good case to come back to Ron and say ‘Look at these guys, they’re just working it.’ On the other hand, what I really want to do is get you to help make this work. If that happens, then hopefully we build that trust. You’re not going to instantly leave here and say ‘We totally trust these guys and they’re great.’ On the other hand, what we’re saying is give us a chance to do it right and do it fairly. If we don't you have reason to come back to say ‘they didn't do it right or fairly and throw the bums out.’ I can live with that.

Russell Trenholme, a Mission and State funder: “I don’t understand what management entails because when Mission and State was operating independently, presumably Joe was managing it and what that meant was he was assigning which stories he was going to go with and editing stories. Certainly that type of activity is exactly the kind of thing the other entities would not like, that’s what they want control over. So if that is handled by them, what is the residue that management consists of?”

Macfadyen: “We’re certainly trying to manage the balance of the funds and stretch it out for a long period of time so the community can get a sense and an honest assessment of whether this project is working. But we also believe is if other organizations are working with Mission and State, they are producing their own stories that are also running for Mission and State, Mission and State is not a competitive organization, that's what we're trying to get across. By collaborating in this way, organizations are producing stories that are their stories, their journalists are producing their stories. I want to be clear that it’s not Noozhawk producing those stories for the Independent.”

Bolton: “Let me give it a try. Right now, I’m doing what you described as what Joe was doing, which is making the assignments, doing the editing, doing the packaging, stories have to have photographs and put on the site. Obviously, if over time we get some of the other organizations to participate, presumably they want to do their own editing. But there’s also a task of coordinating. If we get a great story from KEYT we want to get it disseminated, so someone has to interact with all the media. Probably in any scenario you are still dealing with freelancers who are independent freelancers. That takes time, energy, editing. So the answer is right now the management largely is that. Could that evolve and be a little different, I don't know yet. It partly depends on the degree that other entities engage. If we have a small organization that wants us to do a story, we have to manage that story. They come with the idea and we will be the ones that executes that.”

Abe Peck, former Mission and State Advisory Board member: “So when you post a story on Mission and State by a Noozhawk writer… Right now you have a story by a Noozhawk writer [Lara Cooper] on Mission and State, who is she getting paid by, is she wearing two hats?

Bolton: “Lara is one of our staff writers and for that story was paid from Mission and State. But I would rather be paying Nick or somebody else because I had to backfill that on my own daily news operation.”

Peck: “I think the idea of saving Mission and State is a good idea. I think that’s part of the impulse here. But I think you’ve got a lot of stuff to work out here.”

Lois Mitchell from the Orfalea Foundation: “It seems like right now, the concept is both flawed and potentially doomed because of the state it’s currently in. I don't understand why you can’t take a few steps back and create the advisory council, which would include the other journalist and editorial reporters that have an interest to develop a protocol of how you make decisions of what you are going to fund and how that process would work. Right now, everyone is concerned about the self-dealing, which is exactly what is taking place. So couldn't you instead of figure out and give it a few months and say, ‘let’s go backwards a few steps’ and include everyone instead of proceeding and hoping they’ll later come back to collaborate with you. That doesn't look like that's going to happen.”

Macfadyen: “Not everybody doesn't understand how this is working and I don't think that's a uniform opinion among Santa Barbara County news organizations.”

Whitehurst: “Was the advisory committee acting as a editorial board?” No. “So Joe was acting kind of like Tom, whatever he feels is appropriate to publish.”

Gallo: “Exactly. Whether it was for-profit or nonprofit, the board did not set itself up as telling Joe what to do. We placed that responsibility in the editor. One of the many reasons why we decided not to go forward was what had emerged, while lots of high quality, seemed actually to be more competitive. They did everything from book reviews to what’s going on in the campus and what’s going on tonight in town. That was not what this project was about. In this iteration, again we have an editor, there is a little bit of an unusual bend to this configuration, but our next big task is to reconstitute and build out a good advisory committee. I’m not sure it should dictate what stories run everyday. They should be a conduit for the community and we are out looking for people again. It will depend on whether people are going to try this out. At the end of the day, this is another experiment, 96 failed across the country for all different reasons with good people. This is tough stuff, this is an attempt to do this in a different way. If it doesn't work out, we still have the option as Lois suggested, that we can do that. But that too is not necessarily as impartial as it sounds on paper. Are they going to vote on what stories are important, what stories should be investigated and what should not? I don’t think that’s really in the spirit as well. I think this will show itself very quickly whether it was on to the right thing.

Bill said something to me the other day. He said, ‘this has been difficult.’ I asked, ‘do you still want to do this.’ He said, ‘If you lose confidence in me, I don't want it.’ I think that is at least worth listening to. If this doesn't produce things that isn’t of value to the community, no one wants it to happen. It didn't catch on in the other iteration and it wasn't for a lack of trying, it was a startup, no one really owned it and now we’re trying to bring it to life.”

[Editor’s note: The Knight Foundation, according to a report made at an advisory board meeting last fall, was extremely happy with Mission and State’s initial direction and progress. Peer associations such as The Investigative News Network also lauded Mission and State as a model for nonprofit, multimedia digital journalism.]

Mark Danielson of KEYT: “I’m thrilled someone is taking the management role. We don't want to manage the project, we want to help contribute to that and make it potentially successful for all of the community. At this moment, we’re not looking for funding either. My hope is we can put something collaborative together; we’re not looking for individual stories either. What I hope is that someday we can put something significant together using the power of television, I’d make sure you’d have credit for the things you’d produce so we can put something on TV that's in-depth and that has impact and meaning to the community. I want to thank Bill and Tom to try and wrap their arms around it and not let the project die. What we can offer is a really big outlet to make sure what this is and what it’s doing. We’re not afraid to experiment with you, we want to figure out a way to make it happen. Some of this stuff is uneasy, Tom explained to me he was going to meet with other media including our competitor KSBY. Tom you have to go do that, it doesn't mean I like working with my competitors but for the greater good we want something in-depth, significant that has real impact. If we could execute that, we’d be really excited.”

Henry Dubroff of the Pacific Coast Business Times: “We’re a little bit dispassionate about this in that our content is all exclusive, it all eventually goes behind a pay wall. The idea for us of collaboration that leaves our content in an open architecture outside our pay wall form just doesn't work for us. Melinda and I talked about it four or five years ago when Melinda [Burns] sat in my office and I said, ‘hey, I think you have a great idea but we have to figure out a way to make it exclusive.’

Would it be of use to the group here to consider the question of whether this could proceed down two tracks where you somehow continue with this project, which I agree has this inherent conflict built into it where Noozhawk, Mission and State and the Santa Barbara Foundation really all do appear to be one entity. God love you if you can get over that and convince other folks to collaborate, maybe that will work. For us, what works much better would be to step back as Lois suggests and try and work out some way to provide fellowships or internships that would carry the Mission and State imprimatur but would allow us and others to create exclusive content that we would own. How you would manage that I have no idea but if you thought that might be viable I would be willing to think about how that would work. You’ll find a lot of reluctance to pitch stories to their competitor. I will add a personal note, I worked in Denver, Colorado at the Denver Post and we had a newspaper war with the Rocky Mountain News. We happened to win that war. One of my best friends happened to win the advertising agency for the Rocky Mountain News, that wasn't even journalism. I didn't speak to her for three years and then she lost the account. That’s just how the world of newspapers work.”

Question from unknown source: “To me it seems the Santa Barbara Foundation is the fiscal manager of the grant. You need a management based on what Tom said, some place for these things to go. Where they are vetted seems to be a third leg of the stool perhaps. If Tom would convene a group of impartial advisors, of people knowledgeable in the news business that would make the recommendations back to the Foundation…There’s some value in having a three-legged stool rather than the two-legged one we have.”

Gallo: “I love that concept in general. In this case you said there would be an advisory board that would choose the stories that would make a recommendation back to the Foundation…?

Mitchell: “You need the editorial, and then separately the accountability of creating what is the process, how are decisions made, just the idea of how you vet things so the editorial can follow that in selecting…”

Gallo: “That’s what I’m saying, it’s advice to them. Not to the Foundation to make those changes. That’s exactly what we’re proposing as an advisory board. It’s already there but it needs to be fleshed out, that would have representatives from media, community and they would be advising this entity and were monitoring that as the fiscal sponsor and if that doesn't work, then it doesn't work. We’re a in a little bit of a circle. Yes, we could say we’re going to just rupture this. I don't think that’s really fair. They are in day 47. While there are a lot of people who have concerns, there are some legitimate concerns about the construction of this. But I think there’s no permanent damage done, considering the saga of this for two and a half years. Again, something the Foundation was not proposing but has always been trying to help in one iteration or another. I already explained how we got here, and I’m not saying it’s the best situation that ever happened in a community decision making process, but at the time it never occurred to anyone around the table that this would be the reaction. This was an honest thing, we also have an honest partner who is saying, ‘keep us on a short leash, have an advisory committee, if the Foundation isn’t happy with us then other options will be pursued.’ But I don't see any reason why we shouldn't give this a chance for a few months. I don't think there’s anything dishonorable they have done, I understand some of the issues that have been raised, I understand all of them, but all we’re saying is that come or don't and let’s just give it a shot.

I was in Santa Maria speaking with the publisher of the Santa Maria Times and she too shared the concern about this but received an email this morning saying she wants to give it a try. Last week, she called me and said ‘I’m so upset I’m shaking.’ All I’m asking is to give this a shot, if it doesn't, you have our number. We would not want to continue if this doesn't fulfill it. If there’s the 1 or 2 percent that this gets on its feet, they may give it away, this was not sustainable, this was not going anywhere fast and it was burning through dollars.”

[Editor’s Note: Noozhawk told me this is their plan for “sustainability.” “Going forward, all work for Mission and State will be done on a freelance basis under independent-contractor agreements, which is a crucial component of guiding the project toward financial sustainability.”]

“This was a decision made with some urgency to protect it, to grow it and maybe it’s one of those for-profit, nonprofit things that’s emerging in our society. This is a little bit about us breaking some new ground, being a bit of an entrepreneur, taking a chance. It may fail but it may succeed.”

Melinda Burns, former Mission and State Advisory Board Member and freelance journalist: “I’m extremely worried because the project will not succeed unless it’s a community project. What we’re hearing here is major news organizations are not happy. Some of them will not participate. They are furious from what I’ve heard about letters going around and threats being made. We’re already starting this with tremendous controversy and I think that’s deadly. Tom and Bill are my friends, they are my comrades in arms and we go back forever and been through a lot together and they are great journalists and I love working with them, I hear them talking about the project and they are repeating what my friends and I wrote and what the Foundation supported so generously to do. But there are two main goals, one for journalism and the other is media collaboration and what we’re hearing is that it's not going to happen. But if we start with a partial collaboration, it’s just not going to work. I fear that it’s not going to work because where will we get the donations, the community participation…”

Mitchell: “Why don't they have a hiatus until it’s figured out so they don't spend anymore grant money, set it aside. Why doesn't need to be published on a daily basis?”

Nick Welsh of the Santa Barbara Independent: “What is legally to prevent you from saying we’re going to take a time out here and measure twice and cut once…Obviously we all agree that Mission and State as first rendered didn't work. We have $350,000 on the table, which could do a lot of good. Or, maybe not. When you say. ‘what’s the harm in trying?’ The picture is you spend half of that and you say ‘that didn't work let’s see what we can do with what’s left,’ and at that point why even start the conversation? As a matter of practicality and legal technique, I know you don't want to do this, but if you decided to take a chill, let’s look at it and get everybody in the room who has their bowels in an uproar and let’s try to come together.”

Gallo: Legally, nothing.

Kacik: “How many times did Noozhawk submit a proposal for Mission and State or the Santa Barbara Journalism Initiative?

Gallo: “There was a series of three proposals in the last few months.”

[Editor’s Note: Jan Campbell of the Santa Barbara Foundation came up to me after the meeting to say that Gallo was mistaken. She clarified that Noozhawk submitted its first proposal to head the Santa Barbara Journalism Initiative in 2012.]

Cole: “What are you projecting to sell through Mission and State over the next year or two for advertising and sponsorships. Because obviously that’s the competitive element.”

Macfadyen: “Mission and State as a nonprofit entity cannot sell advertising as I think you know. What we are proposing to do is work collaboratively with other media to get a sense of what kind of stories Mission and State could do over the next year and go out to potential sponsors to sponsor Mission and State. But the funding goes through the Foundation, so that’s where payment is made. So it’s not made to Noozhawk or Mission and State.”

Cole: “But what’s your projection, $100,000, $150,000…”

Macfadyen: “We don’t have a projection at this point.”

Question from unknown source: “Would that be considered a donation to the Santa Barbara Foundation?”

Gallo: “It is feasible, if the confidence builds, the same way people made contribution here to help us provide classical music on a for- profit radio station called KDB. But let me just address about let’s stop…By the way, heard a lot today and it’s not just pro-forma. We will discuss this and see what the next best step might be. There is a management issue here. We could always take the $350,000 and put out an RFP and people are going to get individual fellowships. That’s what we can do. We are not going to run this. Running this ongoing is a heavy management thing, that's all that they are doing. Either they are going to manage it correctly and build confidence. This is not about building Noozhawk, it’s about building a capacity in this county to do investigative, in-depth narrative journalism. Or they went. An advisory board will help inform that, monitor it, they’ve signed on to the difficult task of managing this. That proved to be one of the most difficult pieces of the first iteration. That is not something the Foundation is going to do. If anyone else took it over, they would inherit the editorial responsibilities, perhaps informed by the advisory committee. At the end of the day, you have an editor that you monitor and see if they are doing the right things and if they are holding the community promise for this project and if they don’t, then it wont be anymore. If it happens, we have some people coming forward who are saying let’s give it a try. I don't see any harm that will be done in four to six months to see if this can work. When I discuss this with my inner circle, this is not a matter of pride and ego, it’s a matter of what’s right. Now this is an experiment and if it proves to be a bad one, fine. If the board feels the only thing we can do here is reverse course then that is something that we will consider. I don’t think we can talk about that much more today.

Jackson: “Who do mean by ‘we’ anticipated this sort of response?”

Gallo: “I don’t think we had one conversation saying if we do this arrangement, we would walk into a real firestorm with other media. Had that come up, you don’t have to believe this, I would’ve been the first one to say ‘woah…’”

Jackson: “You’re right I don't believe it. I know there are reasons why several advisory board members have stepped down recently. I do also know the only reason there was only one competing proposal, mostly written by me and the Miller-McCune Center, was because of how uncomfortable we were in remaining the fiscal sponsor in a project run by Noozhawk, which is why we’re no longer involved.

Gallo: “That’s right. The legal opinion that was given to the McCune Center as a private operating foundation that they were not comfortable doing this. Option two was for this foundation to do it. Option three was for a total takeover of the whole project with management and editorial duties to the McCune Center. I said that in my opening statement.

Burns: “It's very important when this starts, that there’s only so much energy in the community to do experiments on journalism. While they are very important, the community has a lot of things to focus on. I can’t let go so easily that it doesn't matter if we start and it doesn't work out for a few months and we start over. It’s not just the money, it’s the psychological energy as well. So it is very significant what you are deciding.”

Jerry Roberts, former Mission and State Advisory Board member: “I was involved in this way back when before it was even in writing. One of the fundamental issues that’s underlined the conversation today is that legacy journalists, people who came up when Tom, Bill, Marianne and I did, the whole notion was about exclusivity. I’ve got this story first, it’s mine and I’m going to beat my opponents’ brains out. The world doesn't work that way. The whole thing we’re talking about today is creating a new model. You go to these conferences and you ask if you have answer, you know, you know? No one knows. If there was a model, everyone would be doing this. I can’t emphasize enough the world experimental, which is exactly right. People are trying to figure out how to do this with nonprofits, nonprofits and advertising, advertising only, selling themselves on the street. No one has got it right. So, on the board, we had vigorous debates and everyone didn't agree but one thing we knew for sure was that last fall was that it wasn't working. There wasn't anyway that project was going to continue and get funding for another year. The Knight Foundation money was gone, we were going to have to go to the community and ask for more money and it wasn't going to be there. The one word that kept being mentioned in every board meeting was sustainability. Is this absolutely the best thing and most wonderful? I don't know. I think it has a pretty good chance than anything we would have if we sat in a room and read each other’s auras for three months. This is the news business. We have a mass shooting in Isla Vista. Did the sheriff act correctly or not? Those guys did a good story about it. It's not the biggest investigation but it’s an important story and a question being asked across the country.

From a journalistic perspective, as a donor and someone who supported this project, I was deeply disappointed with the first iteration. I was among those who wanted to make a big change. I say give these guys a chance. They do want people to participate or collaborate and I think Bill gets the web, it’s a collaborative platform, it's a conversation. It’s not exclusivity anymore, that world has passed. And we need to get beyond that in Santa Barbara and I think there’s a chance with our leadership we can do that.

[Editor’s Note: Lastly, it was hard for me to hear everyone in the room say that Mission and State ‘1.0.’ wasn’t working. I know, from those of you who came up to me or wrote me personally, that you appreciated our work. Again, I thank you for your support.]

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