• Have you been asked to donate to Shop with a Sheriff? Call me.

    If you live in Bexar County, someone claiming to be with the Deputy Sheriff’s Association of Bexar County might have called you recently, asking for money.

    The caller probably promised that every penny of your donation stays in Bexar County. You were probably told that it all goes to a worthy cause.

    Like most sales pitches, it wasn’t entirely true.

    Offices of the Deputy Sheriff's Association of Bexar County
    The Deputy Sheriff s Association of Bexar County has offices in this building near the San Antonio International Airport.
    Last year the union representing Bexar County sheriff’s deputies hired a telemarketing firm called PFR Promotions to raise money for a charitable program called “Shop with a Sheriff.” Also called “Shop with a Cop” in other cities, it’s a holiday shopping spree for poor kids.

    The event is real. But most of the money from donations goes to PFR Promotions, not the kids.

    I started looking into Shop with a Sheriff after receiving a tip from someone who read our stories about the Texas Highway Patrol Museum, another telemarketing entity that relied on the credibility of law enforcement officers to raise money. The small San Antonio museum actually employed hundreds of telemarketers across Texas who raised millions. Yet only a fraction was spent on charity. Executives squandered donations on luxury vehicles and junkets. In December 2011, the Texas Attorney General’s Office filed a lawsuit and successfully shut down the operation.

    Shop with a Sheriff is a real event that helps children. But most of the money raised — 67 percent — goes to PFR Promotions, a telemarketing firm based in Arizona. Only a third trickles down to the charitable cause.

    Donors aren’t being told that vital information. In Texas, the law requires telemarketers who are raising money for law enforcement organizations to disclose their overhead before any donation is made. The law applies to companies located outside Texas. Organizations are also required to report that information to the Texas attorney general, which the union had failed to do.

    Union President Juan Contreras acknowledged that he wasn’t aware of that legal requirement and pledged to take care of the problem immediately. He said the union might sever its relationship with PFR Promotions.

    But in the meantime, I’d love to hear from potential donors whether PFR’s telemarketers are complying with the law.

    If you’ve received a phone call, feel free to contact me and let me know if the caller is disclosing who he works for — and where your money is really going.

  • The declining state of investigative journalism

    American Journalism Review delved into the declining state of investigative journalism last week with articles and videos that quantified what’s been lost — and what might be gained:


  • Investigative shortfall: “Kicked out, bought out or barely hanging on, investigative reporters are a vanishing species in the forests of dead tree media and missing in action on Action News. I-Teams are shrinking or, more often, disappearing altogether.”
  • The nonprofit explosion: Investigative nonprofit news organizations are sprouting up across the country. But there are pitfalls: “Whether carried out by a CEO or a development pro, fundraising is a consuming and never-ending quest at journalism nonprofits, as much a part of their business as advertising sales are to a publisher in the traditional media world. With the task come issues that are foreign to newsgatherers. Precisely what money to take under what conditions requires often thorny ethical decisions. Just because money comes from civic-minded foundations or deep-pocketed do-gooders does not mean it is free of strings or baggage.”
  • Living the Dream: A profile of the nonprofit Wisconsin Center for Investigative Journalism: “These are not suits who ran newsrooms. Most of these people starting these are rank-and-file reporters. It’s like reporters and editors taking over the profession.”
  • ‘A need to investigate the bastards’

    Revenue for nonprofit news organizations
    Budgets of nonprofit news organizations
    Columbia Journalism review posted an interesting feature story about nonprofit investigative news organizations, and how they take different approaches to funding and sharing their content. The CJR story opens with a telling anecdote about a meeting at California Watch. At the meeting, the editors agree that one of their reporters, after months of digging, has uncovered a big story:

    But then the conversation veered in a direction unfamiliar to traditional newsrooms. Instead of planning how to get the story published before word of it leaked, the excited editors started throwing out ideas for how they could share Johnson’s reporting with a large array of competitive news outlets across the state and around the country. No one would get a scoop; rather, every outlet would run the story at around the same time, customized to resonate with its audience, be they newspaper subscribers, Web readers, television viewers, or radio listeners. California Watch’s donors—at this point, a handful of high-powered foundations—expect it to publish high-impact investigative journalism about California as widely as possible.

    My favorite line: How journalists are a persistent bunch and continue to push for ways to do watchdog journalism. “I do have a need to investigate the bastards,” said Charles Lewis, the founder of the Center for Public Integrity.

    My only quibble with this story is that it has a Texas-sized hole: There’s no mention of the Texas Tribune or Texas Watchdog. Wuh?

  • Fake Steve Jobs misses the real point

    Daniel Lyons
    Daniel Lyons
    Last week the New York Times ran a story about Internet companies selling imaginary things:

    These so-called virtual goods, like a $1 illustration of a Champagne bottle on Facebook or the $2.50 Halloween costume in the online game Sorority Life, are no more than a collection of pixels on a Web page.

    But it is quickly becoming commonplace for people to spend a few dollars on them to get ahead in an online game or to give a friend a gift on a social network.

    There are several companies that sell virtual goods — one of them being Zynga. The Times story mentioned Zynga and quoted its CEO. But the story paid scant attention to recent blog posts by TechCrunch’s Michael Arrington, who revealed Zynga was making gobs of money from unwary people, often kids, who unwittingly subscribe to deals they don’t want.

    The omission outraged Fake Steve Jobs, AKA Dan Lyons, who claimed the story is Exhibit A in the case of the dying mainstream media:

    Um, New York Times? If you guys are still wondering why people are dropping their subscriptions and getting their news from blogs instead of you — this is why.

    And to all those people who go around wringing their hands and saying what are we going to do when the “real newspapers” all die and we have to get our news from Gawker and HuffPo and TechCrunch? Friends, I think we’re going to be just fine.

    The usual suspects such as Techdirt applauded this post. But they all missed the point.

    The lament about the decline of newspapers is not really about the loss of a physical paper. It’s about the loss of institutions that pay people a full-time salary to look under rocks and share important stories with their communities.

    It’s awesome TechCrunch uncovered the shenanigans at Zynga. Other blogs like the Consumerist and The Smoking Gun have produced fantastic, public-service journalism here and here.

    But such in-depth coverage from these blogs is uncommon, even though they are among the top-ranked blogs on Technorati and actually make decent money. The vast majority of bloggers don’t enjoy the luxury of a sizable paycheck. For most bloggers, it’s a hobby. And it’s difficult, if not impossible, to do the grunt-work of journalism on a part-time basis.

    I would love to hear Fake Steve Jobs explain how a blogger with a day job is going to find the time to stake out a grand jury at the courthouse, or dig up details about a crooked land deal being hatched at City Hall.

    Who’s going to work on these local stories for readers in San Antonio — TechCrunch?

    Newspapers, despite all their faults and foibles, are still the ones doing most of this valuable work.

    Fake Steve Jobs fell for the old fallacy of newspapers vs. bloggers. I’m sure I could find plenty of stories where the Times routinely scooped TechCrunch. But this kind of tit-for-tat tally entirely misses the point. The real problem is finding new economic models that support full-time journalism. That’s why it’s interesting to watch experiments like the Texas Tribune, ProPublica and nonprofit news organizations in other parts of the country. These organizations are paying people to work full-time on important stories.

    Fake Steve Jobs — that’s the real issue.

    (Photo credit: Tripsspace)

  • Texas Tribune receives big grant, but Slate claims nonprofit journalism is flawed

    Evan Smith (left) on Texas Monthly Talks, interviewing John Edwards.
    Evan Smith (left) on Texas Monthly Talks, interviewing John Edwards.

    There’s more news, interviews and criticism this week about the Texas Tribune, an ambitious nonprofit news site led by former Texas Monthly editor Evan Smith and venture capitalist John Thornton:

  • The Tribune announced today that it received a $750,000 grant from the Houston Endowment and the John S. and James L. Knight Foundation;
  • Mallary Jean Tenore at the Poynter Institute interviewed the talented reporters at the Tribune who left traditional media jobs to take a chance at the nonprofit;
  • And Slate’s media critic, Jack Shafer, took a swipe at the growing philanthropic trend in journalism, arguing: “We’re substituting one flawed business model for another. For-profit newspapers lose money accidentally. Nonprofit news operations lose money deliberately. No matter how good the nonprofit operation is, it always ends up sustaining itself with handouts, and handouts come with conditions.”

    The Tribune’s primary benefactor, Thornton, responds to Shafer’s column by saying there’s a reason why philanthropists like him are writing big checks for journalistic ventures: “I think most of us want quality journalism. Just like I give money to Ballet Austin because I like to see artistic athleticism and pretty women.”

  • (Photo credit: mattwright on Flickr)

  • Homeland insecurity: How federal grants are being misspent

    Two years ago, on the anniversary of the Sept. 11, 2001 terrorist attacks, my colleagues Karisa King and Scott Stroud wrote a story that went beyond the platitudes of politicians and pundits. Karisa and Scott checked to see if Texas was actually safer after receiving more than a billion dollars in Homeland Security grant money:

    Texas has spent more than $1.4 billion in homeland security money on an effort that was supposed to make people safer, but the program has devolved into a massive spending spree undertaken with inadequate planning, coordination or accountability.

    Homeland SecurityThe problem is apparently persisting in California, where a new nonprofit organization of investigative reporters called California Watch reviewed stacks of state audits that tracked how grant money has been spent:

    Under the state’s open-records laws, California Watch found scores of instances of wasteful spending, purchasing violations, error-prone accounting and shoddy oversight at agencies across the state during the years immediately following 9/11.

    California Watch, a new unit started by the nonprofit Center for Investigative Reporting, examined thousands of pages of documents from 160 monitoring reports written by state homeland security officials who visited cities and counties across California to inspect equipment and grant records for compliance with federal guidelines.

    California Watch is the latest nonprofit group geared towards investigative journalism. Similar nonprofit models, such as Texas Watchdog and the Texas Tribune, are attempting to fill the vacuum left by gutted newsrooms across the country.

    Investigating whether public officials are actually doing a good job keeping people safe is important work — no matter who’s doing it.

  • Open records: Financials of Texas charities


    Texas Attorney General Greg Abbott is unveiling a new Web site where you can soon look up the “990” tax forms of nonprofit organizations in Texas.

    The 990 is a good starting point when you want to know more about a tax-exempt charity and what it does with its money. You can find out how much the organization spends on fundraising, or what it pays its top officials. Journalism students at private schools can use the 990 to get financial information about their university.

    Former San Antonio Express-News columnist Roddy Stinson looked at 990 tax forms of a local Head Start provider, Parent/Child Inc. The group is a nonprofit organization that receives millions of dollars every year from the federal government to provide early education for poor children.

    Stinson found out that the taxpayer funded, nonprofit organization paid its top executive $200,000. His first of many columns about the topic was: “Mamas, let your babies grow up to be Head Start executives.”

    Another good Web site for information about nonprofits is Guidestar. You can sign up to Guidestar for free and look up three year’s worth of 990s. Examining the tax forms for multiple years, and not just one year, is a good way to find patterns, such as whether revenues are going down.

    Guidestar is run by — you guessed it — a nonprofit.