Texas Journalists Rally to Save Progressive Magazine

The staff at the progressive Texas Observer magazine has raised more than $219,000 in an effort to stay open, less than a week after its managing board unilaterally voted to shut the publication down.

The online fundraising effort, created on March 27 2023, is seeking to amass $250,000. The Observer, founded in 1954, said on Twitter that it would take $200,000 to keep the publication operating for another month.

Fact Check

Claim: Texas Observer saved by GoFundMe Campaign.

Description: The Texas Observer, a progressive magazine, was reportedly closing down after a vote by its managing board. However, after raising more than 9,000 in less than a week on a GoFundMe campaign, the board reversed its previous decision. The magazine editor credits the fundraiser’s success partly to decentralized social media platforms.

Rating: True

Rating Explanation: Verified by the direct source, the claim is accurate. The managing board indeed reversed its vote to shut down the magazine after the successful GoFundMe campaign.

“We’re hoping for generosity, as well as looking everywhere we can for matching donors to provide more,” the staff account said. “This would be a lifeline to push off layoffs and buy us time to find benefactors/grants.”

While the Observer has around 4,000 print subscribers and another 64,000 subscribers to its email newsletter, the magazine — which publishes stories for free online and does not run advertisements — had relied on donors for its $2.1 million budget in 2022 rather than financial support from readers prior to this fundraising campaign.

As the Texas Tribune reported, the nonprofit Texas Democracy Foundation voted on March 22 to shutter the Observer on March 31 2023 — apparently without informing the magazine’s editor-in-chief Gabriel Arana.

“This is the first I’m hearing of it,” Arana told the Tribune. “The board hasn’t communicated with me or the staff about this.”

According to that story, Arana and Laura Hernandez Holmes, who chairs the foundation board, began to “clash” not long after his hiring in 2020, and that she tried to leave the foundation prior to the vote to close the Observer:

Hernandez Holmes announced she was stepping down as board chair; board members persuaded her to stay on until the end of March. As of last week, the magazine had only $170,000 in reserves, about enough for two months of payroll. Typical philanthropic guidelines suggest that nonprofits have at least three months of monthly expenses in reserve, and ideally six or more months.

The Texas Tribune also reported that Hernandez Holmes accused Arana of orchestrating “false and hurtful attacks” against her; according to her, she tried to resign after efforts to meet with senior staff were in vain:

She said the senior staff had used up $200,000 in funds that were meant to stay in reserves and were not to be spent without the board’s explicit consent.

“I don’t know if it’s because I’m a young woman of color talking to men,” she said. “I often wonder if my requests and directives would have been better received coming from a man. I was not respected as the board president by senior staff.”

Arana responded on Twitter, saying that Hernandez Holmes was trying to make the magazine’s closure “about identity,” adding:

Despite numerous attempts to reach out, Laura Hernandez-Holmes has not spoken with me directly in more than a year.

I’ll also note that Laura refuses to answer questions from staff this morning and yet spoke with the media before us and had a phony, tone-dead statement prepared to give today.

In a separate Twitter threadTexas Monthly magazine reporter Forrest Wilder said, citing a conversation with an unidentified member of the foundation’s board, that another board member had convinced the group that the magazine “had ‘no intrinsic value.'”

According to a document posted by correspondent Steven Monacelli, the fundraiser is part of a proposal by the magazine’s editorial staff, which also requests that board members who voted for the magazine’s immediate closure resign:

According to the fundraiser’s campaign page, if the foundation’s board opts not to shutter the Texas Observer, the money raised will be donated to the foundation to cover salary and benefits for the 17-person staff.

“Otherwise, funds raised here will be divided equally among the staff who are being laid off,” the page states.

Journalist Andrea Grimes, a former Observer staff member, is circulating a statement of solidarity for cohorts and other former colleagues to sign on to support the fundraising effort.

“Even with its messy history and all its faults, I can’t think of anything more valuable in the year 2023 than a muckraking magazine like the Texas Observer,” she wrote on her website. “I hope the board sees reason and gives the magazine the opportunity to survive another seventy days, if not another seventy years.”

The Observer’s possible shutdown dovetails with a larger trend of newsroom collapses around the United States; as recently as July 2022, local news organizations were reportedly closing at a rate of two newspapers per week.

Update, March 29 2023, 3:56 PM: Following a hugely successful GoFundMe campaign, the board reversed its decision to shut down the news organization:

Are you sitting down? This Go Fund Me campaign, and the efforts by the staff of the Texas Observer, have just attained complete and utter victory. The 4,000 people who contributed more than $300,000 by 5:06 PM Texas time today deserve the credit for this win. Thank you.

Just now, the Texas Observer’s parent nonprofit board, the Texas Democracy Foundation, released a statement saying the board unanimously voted to rescind layoffs after seeing this successful effort to raise funds.

That’s right. The Observer will not lay off staff on Friday, and the publication will not cease the production of journalism.

Take a moment to reflect on this astonishing accomplishment that YOU made possible. Cheers to you.

For its part, the board released the following statement from its president:

Today, upon receiving significant financial pledges over the past few days, the Texas Observer Board gathered to vote to reconsider previous board actions.

The vote to rescind layoffs was unanimous, and the board is eager to move the publication to its next phase. I want to express my heartfelt thanks and gratitude to those who donated to and expressed support for The Texas Observer, as well as gratitude to the Observer’s staff for stepping up and working hard to keep the publication alive.

The Texas Observer is near and dear to my heart. I fondly remember attending Final Fridays and Molly Awards dinners as a young University of Texas graduate and seeing many familiar faces from my work in local Progressive and Democratic politics. I was recruited to join the Texas Democracy Foundation board of directors because I was told it needed new, young leaders with experience in Texas and professional fundraising. I eagerly rolled up my sleeves in early 2020 and have been working hard as a volunteer ever since, including the past year or so as President.

After requesting budget statements from senior staff for several months, I finally received a clear picture early this month, and my fears of a potentially dire financial situation were realized. Much of the $200K the board had put into savings to rebuild our reserve account had been spent without board approval, and we felt we could no longer sustain the operation in its current form.

I am proud of the board for reacting decisively to the dire financial situation and working hard to raise the funds to save the organization and its stellar journalists.

After several weeks of strong fundraising efforts, two of our senior staff leaders resigned and left the board in the painful position of needing to make the most challenging decision an organization can make.

My intent in voting for layoffs and hiatus was never about closing down the publication. The actions I took as Board President were intended to allow space for the Observer to be reconstituted, and reimagined in a more sustainable form so as to develop a strong business model that could adapt to an ever-evolving media landscape.

However, this month it also became clear to me that new board leadership needed to emerge in order for the organization to move forward. I am resigning from the Texas Democracy Foundation board effective Friday, March 31, 2023.

I wish those who would pick up and carry the mantle of the organization the very best, and I will continue my ongoing financial support of the Texas Observer. I look forward to attending the next Molly Awards dinner.

-Laura Hernandez Holmes

“This is wonderful news,” said editor-in-chief Gabriel Arana in a story the Texas Observer published about their return (with the headline, “We Did It, Y’all!”). “The Observer is indispensable to Texas and to democracy.”

The publication also credits decentralized social media — free from tainted algorithms or the instability of its ownership — with the fundraiser’s success:

Among the unexpected sources of support for the magazine was the “fediverse” – the collection of decentralized Mastodon servers that soared in popularity following Elon Musk’s acquisition of Twitter. Many comments on the GoFundMe page mention that the donors learned about the Observer through Mastodon – where the Texas Observer was one of the first journalistic outlets to set up its own server, [Texas Observer managing director James] Canup said.

For a publication with an aging readership and donor base, that’s another glimmer of hope.

“The generational passing of the baton may actually be happening through Mastodon,” Canup said.