You may have noticed we just launched our second 2020 fundraiser. This is exciting news for a lot of you, but we recognize that it also might be an alarming or even annoying announcement to others. So we wanna answer some questions about our fundraising that we’ve gotten in the past, and just dig into what we’re doing and why.
We’ve had this fundraiser penciled in since January, with the caveat that if we generated enough advertising revenue this year, we might not need to do it. In fact, holding 1-2 fundraisers a year has been our plan since the major budget changes we made after our 2019 campaign. It’s actually a plan many of you have endorsed over the years, usually with the very specific suggestion of “you should do what NPR does!”
Like so many ideas we had in 2019, 2020 has challenged our ability to follow through on those goals and our comfort in doing so. A pandemic is raging with no signs of slowing down, our collective financial futures are more unpredictable than ever. This exact week, U.S. Congress is debating a relief bill that will have an enormous impact on so many of your abilities to cover your own needs, let alone ours. We know that a lot of our readers aren’t in a position to support us this month, and that is completely okay.
But we’re also hoping that some of you can and will do so knowing you’re subsidizing the site for others, and therefore are plowing forward, because my friends — the publishing landscape is dire. Thus far, 2020 has been the worst year on record for newsroom layoffs. Hundreds of print and digital news publications have folded, downsized and slashed thousands of jobs, including many independent media outlets we all relied upon for smart, honest writing.
Despite this, Autostraddle remains — so far — on the very short list of publications who’ve survived without lay-offs or budget cuts. We’ve continued publishing relevant, vital work for you. We’ve continued to create the necessary uncompromising and feminist space for queerness where lesbian, bisexual and queer women and non-binary people are centered, and where trans men are welcomed. Here, it’s all about our community, and we’re not just relegated to a vertical or treated as a side topic on a site that centers straight people.
Our fundraising goal accounts for about 45 days of funds out of the 154 days left in the year. We’ve got 109 days covered, mostly through what we already have in the bank and what we consider to be relatively sustainable and reliable sources of income — like A+ Membership!— and we need your help to fill in the gap. What our goal will be *for*, in a deeper sense, is the leadership, vision and goals of our new Editor in Chief Kamala Puligandla and Deputy Editor Dr. Carmen Phillips.
But why does our “business model” require that we interrupt our normally scheduled programming to ask for money so soon after the last time we asked for money? Maybe you’re an A+ member, or you buy our merch, so why are we still also having fundraising drives on top of having a membership program and a bustling store!? Didn’t we just have a fundraiser? That’s what we’re here to talk about! First, some commonly asked questions we can help answer:
- Can’t you try making more money from advertising?
- Have you looked into becoming a nonprofit?
- How are you broke again already?
- Why don’t you just get investors?
Beyond that, what does it actually look like to build our business model around a reader-funded vision? We can explain!
- Our business model reflects our values
- Here’s how our sustainable sources of income break down
- Our whole community is sustained by people who give with the next person in mind
- What you can expect during this fundraiser
Can’t you try making more money from advertising?
Riese really spoke to this in This Business of Art. It’s a common misconception that any publication, let alone our special weirdo niche magazine for lesbians and bisexuals and queers, can survive on advertising dollars alone. Publishing has always relied on revenue from advertising as well as events and subscription/membership income. (Here’s a useful look at Buzzfeed’s revenue streams.)
Prior to 2019, ad revenue was generally abysmal due to the market we serve and our distance from the mainstream media world, which meant we’ve adapted over the years to never rely on advertising to pay our bills. Instead, we’ve had the privilege to focus on building our relationships with YOU first and foremost.
Because of that, other publications have had to make tough choices we’ve not been made to. For example: The Atlantic gained 90,000 new subscribers between March and May, but because of their primary reliance on events and ad revenue, they still had to cut 17% of their employees in May
While most publications plan for year-to-year growth in ad revenue, we are stalwart pessimists with a passion for caution. So we’d already presumed ad sales would be down 50% from 2019. So far our ad sales are down 94% from what we sold in all of 2019. On top of that, we’ve doubled our budget since last year. Like it did for many other magazines and media companies, a PPP loan helped compensate for some of that loss. (Our loan was for around $90k, which makes it too small to show up in public databases.) It also helped compensate for some of our budget increases. But not enough to erase the need for a second fundraiser this year.
Advertising is unpredictable. It’s great when it comes, and when it comes we can grow and/or cut back on fundraising. This year it hasn’t come.
Have you looked into becoming a nonprofit?
We have, yes! Extensively! A nonprofit designation is essentially a tax status; there are a lot of 501(c) designations, but the (3) is the one that allows contributions to your organization to be tax-deductible to donors. Nonprofits (including churches) also get tax breaks. For many organizations, I’d say it’s absolutely appropriate, especially if you have a lot of overhead. Why not for us?
- We’re a virtual office with remote workers. We don’t own or rent physical property. This means on our end, the tax benefits are minimal — we might get some sales-tax free pens, a deal on software or cheaper postage. But 90% of our expenses (which is the percentage of our budget that goes towards paying queer human beings to work here) would remain unaltered.
- The primary tax benefit, then, is for our donors. However, 40% of our readers don’t live in the U.S. and, for U.S. residents, the standard deduction is $12,400 a calendar year, which means you’d have to donate over that amount to get a larger deduction, and according to results from our Money Survey, 83.6% of our readers donate less than $500 a year to non-profits. (If you are a U.S-based person who donates more than that to non-profits, we’re sorry that your gifts to Autostraddle aren’t tax-deductible and we thank you for your support!) So, it doesn’t make a difference to our taxes and it won’t matter much to most of yours.
- We’d be required to assemble a board of directors, and to hold (ideally in-person) meetings of that board. Volunteering on a nonprofit board of directors is a part-time job in and of itself (as is creating and having a board of directors); we’re always going to choose creating paid opportunities over volunteer.
- But what about grants? Honestly, grants are no easier to rely upon than ad sales. There’s no guarantee a group like ours would receive foundation or government funding. Private foundations are towers of wealth only required by law to disburse 5% of their assets each year, and their funding priorities can change at any time, just ask Bette Porter (and one reason why re-watching her plot line in the first season gives me nauseating flashbacks to my museum days). A foundation can give someone $50,000 one year and decide they don’t get that the next, or pull funding if they don’t agree with a nonprofit’s stance on an issue or approach. It’s much more sustainable and ethical to focus on you, our community, and to rely on your support, especially because we know that we believe in so many of the same things.
There is one area where being a non-profit would help us: we often have “profits” at the end of the year that we keep in the bank for the next year, but the for-profit structure means our owners have to pay income tax on that profit, regardless of how much of their share they actually took. (Most years, this means we do pay out enough to cover those tax burdens.) At this point we don’t think that benefit outweighs the drawbacks, and we’re doing our best to mitigate the impact of taxes on profits by timing our fundraisers so that they are far enough away from the end of the year that we don’t wind up with surprise profits in December. (That’s why we’re fundraising in August!)
This is all why, after 11 long years, we’ve never switched to a nonprofit model, and why you can expect us to continue to not make that move. We’ve weighed our options and the pros and cons, our mission and our values, and are being strategic with our choice of United States tax status.
How are you broke again already??
No, we’re not broke!. We are planning ahead. We know how much we need to last the year, and for a number of reasons including our newly promoted editors wanting to know exactly what they have to work with when instituting their new vision, now is the best time for us to raise it. About 71% of what we need we already have or know we will receive through sustainable sources of revenue (A+, merch sales, affiliate sales), and this fundraiser is to fill in the gaps.
Why don’t you just get investors?
Perhaps our most common question from straight people is, “can’t you just ask some celesbians for a million dollars?” So, let’s talk about investors and venture capital.
In the mid-’10s, venture capitalists were stuffing publications like Mic, Fusion, Buzzfeed and Vice with funding, enabling them to offer unsustainable rates, business models and staffing structures. They were able to invest in ultimately failed initiatives, like pivoting to video. None of that VC money ever came our way, because who gets venture capital has more to do with “who you know” than “what you do”. In 2019, VC investment in female founders hit an “all time high” — of 2.8%. Less than 10% of all VC goes to women, poc and LGBTQ founders. But our lack of access to VC capital actually isn’t a bad thing. VC often demands liquidation, first driving up value in order to sell the company for a profit, either through an IPO or on the secondary market. VCs expect most of their ventures to fail. A key component to venture capital is also close management of the company by the investors. When they’re looking to grow in order to sell, it’s a very different relationship than Autostraddle’s values-rooted approach.
Even outside of the VC space, a lot of the capital opportunities you hear about or have recommended to us are essentially long-term loans at low interest rates. If you’re a business owner who needs to stock a kitchen for a restaurant or manufacture jeans for a clothing store, loans make sense. The money you borrow becomes a product you can sell, thus enabling you to repay the loan. In fact, on two occasions, we’ve taken small Paypal loans to print merchandise for the holiday season, both of which we were able to repay within a month of receiving it.
But we haven’t and never will take on debt we’re not immediately able to repay. The realities of our industry and the low overhead of our business specifically, coupled with our own precarious personal financial situations, make loans just not worth it.
We are open to outside investment, we just haven’t had the right deal come our way. A business like ours requires a specific type of investor or buyer — one who believes in the cause even more than they anticipate profiting wildly from it and who knows how to sell our market to advertisers. Otherwise, putting more money into writers and staff doesn’t automatically create more web traffic or more revenue. Our traffic was actually at its highest in 2014, when full-timers were still very underpaid “independent contractors,” our rates for team writers were one-third of what they are now, and we couldn’t pay outside freelancers at all.
So what does it really look like to design our business model with fundraising in mind? How does it work, why is it sustainable, and what can you expect about what it means for you to support us? We’ll explain!
Our business model reflects our values!
Speaking of 2014 — In terms of savvy, to me, the Autostraddle team coming up with the A+ program in 2014 is proof positive that this site is around because of downright pre-cognitive levels of “business” acumen. The only thing they could’ve used at the time was more resources to put behind their idea.
That’s because YOU give us the freedom and flexibility that can only be achieved by an independent publication. The future is more uncertain than ever, but doing these fundraising campaigns and refusing to acquire debt enables us to never be forced out of desperation to accept a buyout, partnership or investment offer that doesn’t align with our values and policies — which are usually at odds with capitalism. Like these:
- As a company, we’re not making efforts to maximize efficiency at the cost of our people. We provide flexible hours and unlimited leave for employees and freelancers who need it. We can do this because we are not focused on profits, we’re focused on sustainability and growth.
- We have never, in 11 years, lowered anybody’s salary or lowered rates for freelancers. Even when the amount of money our people expected to make here was very small, we knew our freelancers and staff depended on it for something, and we didn’t want to take that away.
- We’re doing our best to be a resource for our writers, to offer coaching and career growth and a chance for people to explore and develop their talents. If we raise more money than we need, it just means more support for writers and thinkers and initiatives that we value.
- Our goal is to earn enough revenue to be sustainable, not wildly wealthy, and for our community to have the resources it needs, not just a few individuals. When we have more money, we’ve historically raised our costs because we’ve used our additional resources to invest more in our people or infrastructure.
- Because of your support, we can publish pieces that we KNOW have a lot of inherent value, whether or not they’re “marketable” or drive traffic from outside sources.
- We’re doubling down on our commitment to fight inequity, to dismantle white supremacy within and without the workplace, and to do everything we can as a publication to build a better world.
- We don’t have a set price for access. While we provide a few pieces of bonus content a month to our A+ members, we’re not erecting a paywall. Fundraisers as a part of our business model go hand in hand with refusing to operate from a place of exclusion. Autostraddle wasn’t started purely as a money-making venture (and it was touch and go for some time!), it was founded to have a community around LGBTQ writers and writing — and that remains true.
Kamala and Carmen have some vital, transformative visions for Autostraddle. And one thing we can always say with confidence is that Autostraddle values and supports our writers and artists, and works to be a community and resource for YOU.
This fact informs our business model — a lot. We care about the reader experience. We work with advertising partners we like, avoid invasive ads and don’t clutter our footers with degrading clickbait. Life-changing stories and information are what Autostraddle’s known for. We’re aware of our responsibility in our LGBTQ community, and it’s a role we take seriously. When we mess up, we look to be accountable and to take steps toward progress. As a supporter, you might never know when your dollars made it possible for someone to access Autostraddle at one of the most vulnerable points in their life — but they have.
Our size and independence has many drawbacks, but it also enables us to act nimbly without needing approval from a board. In June, we had no ad sales that required specific traffic goals, so we were able to make the group decision to pause all content unrelated to the uprising for Black lives, despite the traffic hit we knew would ensue. We were able to take the time to participate in activism outside of the office and to create resources that earned unprecedented reach, like “How to Never Call the Cops Again: A Guide with a Few Alternatives to Calling Police.” These as well as bail fund lists, abolitionist and other syllabi, and personal essays were actionable and powerful resources.
Because of reader support even during a global pandemic (thank you!!!), our team of talented writers and creators were able to do our darndest to get you necessary coverage and content as the pandemic spread. This continues every day.
The Immediate Need
How did we make it through those first nine years without needing annual fundraisers? Well, one reason is that we were all working for salaries and rates FAR below industry standard, and relying on our full-time staff to work excessive, exhausting schedules.
This is a pretty normal phase for a young organization to go through — especially one that began as a group of friends wanting to make a thing — but it was never sustainable.
In July 2019, we asked you: do you believe we can do more? Do you believe we can raise our pay and increase our editorial budget, hire more people? And you funded Autostraddle! And as a result:
- Our budget has about doubled since July of 2019, both because of wage and rate increases and new hires. The far-above-normal ad revenue from 2019 enabled us to eventually hire two new full-time employees and four new part-time contractors. Every human we pay is LGBTQ — even our accountant, lawyers and web developers.
- We still work below industry standard, though we can now pay our bills; we still work remotely and we keep our costs down where we can. Even with these provisions, being ethical has a cost that you allowed us to take on. We grew our budget so that our team could be treated better, so tasks could be shared among more employees, and so we could hire a more diverse team of writers — and we hope that it shows in our work.
Here’s the difference in our budget from before the July 2019 fundraiser and the budget we’d like to aim for after this fundraiser:
Our budget has expanded, and it’s growing with the scope of voices we are focused on centering on our site. We’ve been operating with a bigger budget since the July 2019 fundraiser, and we think the work this past spring speaks for itself.
Here’s how our sustainable sources of income break down
Autostraddle is sustained by YOU.
We’ve already talked about advertising, but let’s break down how all our revenue streams add up to sustainability:
My job title is A+ & Fundraising Director, and a goal for my role is to take A+ from about 50% of my time to about 90% of my time. I really want to move us to being mostly sustained by our membership program, and to fundraise only for special projects. This might be a multi-year plan, this might never be fully achieved, but it remains, nevertheless, a goal. The facts:
- About 30% of our revenue in 2019 came from A+ membership, and that’s not fucking bad. 2019 was unique in many other ways — 2019 also included our biggest fundraiser ever, our highest ad sales ever, and our biggest camp ever. So, I’m also gonna look at 2018, where A+ members made up about 38% of annual revenue. That’s a lot! (Keep in mind that revenue is different than profits —camp revenue was a huge chunk of our revenue, but it was also an enormous chunk of our expenses.)
- And this year, we’ve gained over 1,000 members since March 2020. Each new member helps enormously, but we just haven’t reached the number of members we need yet.
But there’s hope! 60% of our most recent survey takers indicated they’d not yet financially supported us through a fundraiser or membership. Some somewhat confusing/unreliable info from Google Analytics suggests only 1% of our monthly readership has given or joined, so I believe in my heart of hearts that you’re out there!
Much of that 60% simply can’t afford to support us. (Which is fine! We’re still free for you. On purpose!) Our current business model doesn’t anticipate ever surviving solely on A+ membership, but we’re aiming to get as close to that possibility as we can.
But, in case you’re curious, this chart shows how many MORE A+ Members (Cobalt OR Bronze OR Silver OR Gold) we would have needed to not have to fundraise this August. A+ Membership is powerful. Look at what just 820 people signing up at the Silver level for a year can do! We’re obviously not quite there yet, but we hope to welcome at least 500 new members this month. Maybe you’ll be one of them!
Affiliate income is great and we do rely on it! The rates on our sex toys are especially good, and we have so many affiliates besides just Amazon. But, to give you an idea of where it fits in, our estimated A+ income for next year is 20 times more than what we estimate getting through affiliate income, so… we’d need to get a LOT more action through affiliate links to have them be a primary source of revenue. Sites like Vox and New York Magazine have entire teams dedicated to pumping out daily shopping-related content and garner millions of dollars of affiliate income every year, which we don’t have the manpower to replicate. (Plus you’d probably hate the clutter.) They also have the leverage, based on size, to negotiate better deals with affiliate partners than we can.
Similarly, merch sales are awesome! But it would take magnifying our merch sales by a colossal amount to make up the amount of revenue we’d need not to fundraise in 2021. It’s also unpredictable.
Our whole community is sustained by people who give with the next person in mind.
Our supporters are the people making sure this site is here for everyone, and underwriting our costs for those who cannot afford to support right now. Thank you for looking out for the next person.
We’ve always been a little bit different at Autostraddle, and I don’t think that continuing to be free is naive — I think it’s an act of radical trust that is necessary if we really believe in equitable access.
That’s the power of our community, of passing the hat, of chipping in. I hope that if you believe in us and share our values and want to see queerness and independent queer media in our future, and if you want to fully embrace Kamala and Carmen as our new leadership and the exciting vision they have for Autostraddle, that you will throw a few bucks in if you can. And, again, if you can, maybe throw a few bucks in to support the next person, too.
What can you expect during this fundraiser?
- Perks!!! If you give, you’ll have the option to get something like stickers, art, or a tee! (More perks coming very soon, like by the end of this week.)
- During the fundraiser, we’ll send emails and have some pop-ups and posts about it. We know pop-ups are annoying, and we’re very conservative about when we use them. But they do work. Thank you for your patience with them!
- There’s going to be a virtual event on 8/7 where the team answers reader questions about Autostraddle, Riese’s dog Carol, our model, our plans, and our future — all streaming live (and it will be recorded for those who want to watch later)! Although we won’t be able to have an ASL interpreter or live captioning for this event, we will make a transcription available afterwards and post it on the site as soon as it’s ready.
- The beloved tracker has made a reappearance!
- Rachel’s putting together a mini-series of articles from some pretty special freelancers that we’re really looking forward to. They won’t be writing about the fundraiser, but they will be tying in to Kamala and Carmen’s vision.
- You can expect endless gratitude from us!!! And after that? More of the work you’ve told us you want to see!
At the end of the day, we’ve made this site reader-supported because it’s the most reliable, most sustainable, most ethical way for us to survive and thrive and do this work. We’ve always been honored and surprised and delighted to be able to count on you and this community. So, it’s with a great deal of hope and plans for the future and in service to you, our readers, that we’ll be launching our fundraiser on Tuesday August 4, 2020. Thank you for making it even possible for us to be here, now, taking this 11-year experiment into its next phase.
With love and hope,
Editors: Kamala Puligandla, Rachel Kincaid, Riese Bernard