Posted on : 01-22-2010 | By : Vadim Lavrusik | In : Business, Online Journalism
Tags: bay area news project, ceo, editor, journalism, propublica, startup
Bay Area News Project’s CEO Lisa Frazier has a $400,000 salary, which reminds me of the news and criticisms about Paul Steiger getting $570,000 to run ProPublica. This begs the question: how much is too much in the pay of top execs at nonprofit journalism startups.
A lot of the defense for such high pay is that these are people who are very qualified and some earned much more at previous jobs (where they also managed larger operations). Look at the many startup models where the CEO or founders don’t get paid all that much until the model is proven sustainable financially. Why should journalism startups be any different?
It also begs the question of sustainability in the longterm. In the PaidContent article, the headline read that the project is about creating jobs for journos. How many more jobs would be created if the CEO salary was half what it is? I’m guessing about 4. Also, the reason why founders of startups often opt to take a similar pay to their employees is to create a sense of community and camaraderie. They’re all on the same level in a sense. The way a lot of these journalism startups are taking the old corporate model of many news companies.
ProPublica raises similar questions.
ProPublica, an investigative nonprofit newsroom, is facing its own funding challenges. The company received a little more than $8.5 million in donations and grants in 2008, according to its IRS disclosure. The majority of its funding comes from a three-year funding commitment from Herb and Marion Sandler of up to $10 million a year.
The likes of Dan Gillmor, director of Knight Center for Digital Media Entrepreneurship, have criticized the company’s salary structure. On his website, Gillmor pointed out Steiger’s $570,000 salary, along with other top people at ProPublica.
According to the IRS 990 form, the managing editor Stephen Engelberg pulled in a $325,000 salary. Though this is still less than what Steiger earned at the Wall Street Journal, the average pay for a CEO of a nonprofit in New York is roughly $220,000, according to Charity Navigator’s 2009 survey of CEOs at medium to large nonprofits.
“They can spin it any way they want, but they can’t really justify this kind of pay for people at a relatively small nonprofit ,” Gillmor said in the post. Gillmor said in the post that he believes it will hurt ProPublica’s efforts in the long run.
It does take resources to do quality journalism, but the expense should be spent on the efforts of creating a sustainable model. This probably means the days of high-paid news CEOs are over. The revenue should be able to justify the pay. What are your thoughts? How much is too much?