What is dailykos? Of course, it's News·Community·Action. With many more readers than commenters and diarists, the site must be widely viewed as a news and information source. Many of us consider it a community... we share jokes and LOLs, help each other out, and so forth. However we participants view it, though, the site is owned by the privately held limited liability company Kos Media LLC.
In the waning days of 2011, a number of kossacks (a big shout out to Onomastic) responded to kos's call for subscriptions, in which kos sunsetted the lifetime subscription and received a deluge of subscriptions through a gifting rampage of epic proportions:
2,651 -- total new subscriptions. My secret goal had been 1,000
624 -- gift subscriptions
423 -- gift subscriptions that were anonymous, so over 2/3rds.
70 -- gift subscriptions from Nurse Kelley's small donor drive
45 -- The number of individuals who purchased three or more gift subscriptions
This year, the gift-subscription drive has morphed into a donation/gift-subscription drive. Prominently displayed on the front page is
Subscribe or Donate nowSo, with this roundabout buildup, my question is the following. Does a for-profit corporate entity like Kos Media LLC that requests donations from its participants have an obligation to provide some level of accounting transparency?
Help us fundraise for progressive causes and candidates, fight back against the conservative agenda, and strengthen our community. After all, this year's War on Christmas won't fund itself!
Not-for-profit entities, e.g., my public radio stations KCRW and KPCC, are required to provide fairly detailed accounting information on IRS Form 990. Some entities, again like KPCC, make it very easy to examine their accounting information through annual reports and Form 990's posted on their websites. Other entities, like Netroots Foundation, provide no financial information on their sites and must be queried through an on-line database. Reading a 990 is worse than reading a 1040, so if the organization does not produce well written annual reports, it can be a challenge to understand the underlying financials. Perhaps an accountant kog can give us a lesson on that one day?
Publicly traded private corporations, like Costco and Exxon, are also required to provide detailed accounting information, which comes through annual reports and SEC 10-K filings. Typically large corporations post their annual reports and 10-Ks on their websites, or you can find them at morningstar.com (here's a link to Exxon's 10-Ks and 10-Qs). Laden with jargon and full of self-aggrandizing blather, these reports can be daunting to work through.
Certain corporations that are not publicly traded, partnerships, sole proprietorships, and limited liability companies, however, are not required to provide the public with any information about their profit and losses, assets and liabilities. Kos Media LLC is such an entity, and we see little in the way of financial reporting.
We occasionally get a small piece of information, such as the reduction in ad revenue announced in this year's war on Christmas fundraiser. Advertising has dropped from 90% of revenue to 58% and will continue to fall. 90% of what? On the other hand, actblue shows dailykos has received 140k in donations from some 8000 generous souls. Over what period of time? For the most part the expenses and revenues are opaque to the community. Is that as it should be? There's nothing illegal about it, but as Adam B has said,
It's simple: use the same analytic and research tools you use to dissect Republicans to determine the validity of anyone here who asks you for money -- individual, candidate or organization. I personally would recommend that you never give to an individual through this website, unless the individual and her story has been vetted by longtime users of the site or one of the longstanding caring communities which have been established here. And there's always going to be a demonstrably legitimate local organization to which you can donate your support with confidence that your money will be used in an efficient way to help actual people.Okay, that's a bit extreme (maybe to the point of levitating superior to the Carcharodon carcharias) but there's a point of substance here. When I make a donation to a charity, I consider not only its goals but also its responsible use of resources. Is dailykos a charity? No, it's a for-profit LLC. But it needs donations. Maybe newspapers should try this.
On the revenue side of things, KPCC's annual reports show that some 42% of its revenue comes from underwriting, which at least to me is the equivalent of advertising. Kos recently noted that advertising will be about 58% of revenue for this year. The dailykos business model appears to be converging to that of a public broadcasting entity. Should we see a bit more under the hood?