Independent media, along with other businesses contributing to the UN SDG 16 goals of peace, justice and strong institutions are key to wider developmental aims, MDIF head Harlan Mandel tells Impact Investor.
Impact investors should consider support for independent media as a worthwhile addition to their portfolios, given the role that a sector under siege in many parts of the world plays in reaching UN sustainable development goals (SDGs), argues Harlan Mandel, the CEO of the Media Development Investment Fund (MDIF).
Investment in independent media is usually regarded as an investment primarily targeting SDG 16, covering peace, justice and strong institutions, but Mandel told Impact Investor that this view is too restrictive.
“We think it’s really important to understand that independent media really supports and advances all of the SDGs across the board,” he said.
One major impact he cites is the ability of investigative reporting to reduce levels of corruption and other criminality which, by some estimates, could be costing developing countries trillions of dollars that would otherwise be helping to meet economic and social goals.
Another is the impact that a freer and fuller flow of information has on poverty levels.
Mandel said that the assertion derived from the work of Indian economist Amartya Sen that democracy coupled with a free press stops droughts and food shortages turning into famines still holds true.
“That’s because famine is fundamentally an information problem. In countries with a relatively free press and a democratic government, there is public pressure to address the conditions that lead to famine before it results,” he said.
India and Botswana were among countries that had prevented drought turning into famine in the past, partly because governments responded to media reports of problems by channelling food to where it was needed early enough, he added.
Broadening investor base
Despite the linkages to be made between a healthy independent media and speedier progress towards economic and social goals, there are few investors working in the same way that MDIF does. Meanwhile, SDG 16 remains one of the most underfunded and under-promoted of the sustainable development goals.
Investors targeting SDG 16 tend to have a different profile from those investing in other SDGs that have more direct impacts on climate change and social development. Mandel noted that deep-pocketed players investing in tech-oriented sectors like renewable energy and healthcare do not look at impact investments related to the human rights-linked themes in SDG 16 in the same way.
The longer investment periods needed, higher risk perceptions and difficulties in measuring social and economic impact related to funding independent media provide challenges in terms of widening the investor base. But Mandel said any investors committed to speeding up progress towards SDGs should also consider investment in independent media sector as an important way to realise that ambition.
Major investors in MDIF funds currently include large publishers, such as Belgian-based international publisher Mediahuis and Tinius Trust, which own’s Norway’s Schibsted Media group, along with foundations and high net worth individuals. MDIF also offers expertise and other non-financial support to investee companies.
Europe back in focus
MDIF, which has offices in New York and Prague, was founded almost 30 years ago by Serbian journalist Sasa Vucinic and US correspondent Stuart Auerbach. The aim at that time was to offer loans to independent media organisations in eastern and south-eastern Europe, to help them maintain their editorial independence as their countries transitioned from communism into free market economies.
Since then, MDIF has broadened its scope both in terms of where it invests and the type of organisations in which it invests, having provided more than $325m (€299m) of investment to 154 companies in 49 countries in total, many with governments hostile to independent media. Currently the organisation has $118m invested in 65 companies in 37 countries.
As an Impact Investor profile of the fund in 2023 explains, MDIF makes a mixture of fund-based equity investments and direct investments in media and information companies. These can range from a few hundred thousand to tens of millions of dollars.
What Mandel describes as a sad reflection of the times is the return of Europe as a focus for MDIF. The fund scaled down its European activities a few years ago, as press freedom in the region improved, but is now back, as efforts to muzzle independent media have increased in parts of eastern and southern Europe.
In 2021, MDIF co-founded Pluralis, an impact investment vehicle that buys shares in media companies that report independently in European countries where media plurality is at risk.
Mandel said Pluralis had so far raised around €50m from more than 20 main investors, plus around 1,000 investors via a crowdsourcing platform run by Germany’s GLS Bank.
To date, it has made three major investments, in Poland’s Gremi Media, publisher of the influential Rzeczpospolita newspaper, Slovakia’s Petit Press, publisher of the widely read SME newspaper, and Croatia’s Telegram Media Grupa.
MDIF’s most recent European fund launch, in March 2024, was that of its Western Balkans Fund, which provides investment and media advisory services to improve independent media growth and resilience in in Albania, Bosnia and Herzegovina, Kosovo, Montenegro, North Macedonia and Serbia.
Also being developed are media incubators and accelerators that MDIF are branding Amplify. These provide coaching, capacity-building programmes and small grants and equity seeding in Europe, Asia and Africa.
One of these, currently known as the Nigeria Media Innovation Program, has just released six case studies, three years after it was initiated with funding from the MacArthur Foundation. Outcomes include progress in deploying technology that improves news collection, the development of new income streams to ensure financial independence, and support for legacy media in adopting digital-first approaches for growth and sustainability.
Social networks
Other MDIF investments reflect the changing nature of information dissemination in the digital age.
In India, the fund is a long-time supporter of Gram Vaani, which runs a social network for the country’s rural poor. The platform is voice-based so it can be used by people who cannot read or write, as long as they can access mobile phones, which are widely available even in rural communities.
The network is used to share information on a range of topics, such as culture, and opinion on government schemes, as well as critical updates on local developments, such as disease outbreaks, that would otherwise not be available and are thus potentially life-saving.
MDIF also supports improved data visualisation, for example through support for Hukumonline, a digital publisher, in its work to digitise Indonesian laws and regulations, making them accessible online and provide tools to help navigate them.
