Independent Media Investment Pays Off

Michael Hedges December 21, 2010 Follow on Twitter

Financial investors are genetically averse to high risk. Media in developing regions rarely gets the attention of fund managers. That, too, is changing.

Media development projects in areas of critical need are a specialty of Swiss-based Fondation Hirondelle.  Celebrating its fifteenth anniversary this year, the non-profit developer of independent radio stations is highly regarded within the media freedom and human rights communities. It has set up broadcasting operations focusing on news, information and public service in the Balkans, East Asia and most significantly in Africa. The success of Star Radio in Liberia is legendary.

“Things have changed today,” wrote Fondation Hirondelle CEO Jean-Marie Etter in an open letter to supporters (December 15). “Governments who supported us are more concerned about public-private partnerships; they tend to accept our funding requests if we already have private donations for the project. And even if our activity remains very specialized, more and more people are interest, understand our aims and want to help us.”

Fondation Hirondelle was formed in 1995 by Swiss journalists and has received funding from the Swiss government and others. “Until now, we had not attempted to obtain private donations, for various reasons,” continued Etter. “We were not well enough known, we did not have the fundraising infrastructure other NGOs have, our activity does not have the sort of emotional impact on the general public that encourages generosity.”

An Arabic language independent radio station in the Palestinian Territories – Radio Al Amal – received an operating license but languishes for lack of funding. As other media development NGOs have learned, Fondation Hirondelle is turning its attention to private sector fund raising.

In the 1990’s wealthy Western governments began pouring money into struggling and post-conflict democracies. Along with safety and security issues, getting information to local populations independent of entrenched actors became a public diplomacy priority. International broadcasting through shortwave services lost favor to establishing local media outlets. Media development NGOs like Fondation Hirondelle and Internews brought specific capacities for bringing local participants up to speed with technologies and best journalistic practices.

Another media development legend is Belgrade, Serbia’s B92 radio station. Founded as a voice of opposition to the Yugoslav regime, it has become a model for media development. It is now a dynamic – still independent – multimedia player in the Balkans.

Also in its fifteenth year, Media Development Loan Fund (MDLF) has led the sustainability movement within media development circles. In 2006 MDLF jumped ahead by offering a publicly traded bond-like instrument - the Voncert ‘responsAnbility Media Development Basket’- developed with responsibility Social Investment AG, Bank Vontobel and the Swiss Agency for Development and Cooperation. MDLF investments are funded in part through this instrument. The Voncert financial product “provided a yearly annual return of 2.8% over four years and broke new ground by mobilizing private investment capital for the strengthening of independent media enterprises,” said an MDLF statement (December 15).

“This structured product enabled MDLF to provide an additional CHF4 million in affordable financing to help independent newspapers, news broadcasters and online news media become financially sustainable,” said MDLF Managing Director Sasa Vucinic in a statement. “It also helped to establish media development – which underpins all other areas of development by promoting accountability and transparency – at the cutting edge of impact investing.”

“Public-private development partnerships can generate significant added value to development projects,” said Swedish International Development Cooperation Agency (SIDA) policy specialist Pia Hallonsten in a statement announcing cooperation with newspaper publisher organization WAN-IFRA and MDLF (December 14). “SIDA has recognized this and is striving to strengthen the role of development partnerships with private sector.” SIDA has been one of the major government media development donors.

Sasa Vucinic co-founded MDLF after his experience as general manager of radio station B92.  MDLF has been called a media developer “with the soul of a venture fund.” Vucinic will end his tenure with MDLF in March 2011 to pursue “the next big thing.” He will be succeeded by Deputy Managing Director Harlan Mandel.

One “next big thing” in media development is the so called “quality journalism” movement. Big publishers prefer the hard cash from tabloids and big commercial broadcasters like X-Factor. “Quality journalism” – not only for developing regions – appeals to decision makers willing to support untainted news and information sources. MDLF’s first investment outside the developing world is a news cooperative in the United States.

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