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By Rob John
In 1995 Sasa Vucinic, long time managing director of a Belgrade radio station, asked George Soros for half a million dollars to launch a fund that would bring independence to struggling media operations in emerging democracies. Soros didn’t think it would work – but gave him the money anyway.
Today the Media Development Loan Fund describes itself as a venture capital fund for a strong and independent press. MDLF's operations span 17 countries in Eastern and Central Europe, the former Soviet Union, Asia, Africa and Latin America. Registered as a non-profit in the US, MDLF makes ‘programme related investments’ – usually long term, below market loans - primarily dedicated to helping news outlets build or upgrade infrastructure and, consequently, expand audiences, bolster revenues and increase effectiveness. Typically, loans cover the purchase of printing presses, transmitters, antennas, and better production equipment or computer systems. The Fund’s blend of hands-on capacity building, finance and new media technologies is a venture philanthropy approach in which nearly €33 million has been invested across 74 media projects with an impressive 98 per cent loan repayment rate.
MDLF justifies its lending (rather than grant) approach as instilling a business like relationship and discipline with their portfolio media companies, improving management practices and allowing scarce funds to be recycled many times over. But, its motivation and mission are very much about social development. Eighty three per cent of the world’s population live in a country without a free press – hampering human and economic development by propping up unaccountable regimes. To expand its own work, and itself move away from donor grant dependence, MDLF is experimenting with a new financial instrument – the Press Freedom Investment Note – to encourage a new form of socially responsible investing – in freedom of expression through a strong, independent media.
Dr Rob John is a Fellow at the Skoll Centre for Social Entrepreneurship. This article first appeared in Philanthropy in Europe, Issue No. 26.
