A two-hour debate over the future of the Mission & State investigative reporting project in Santa Barbara ended with no resolution but one funder calling for a time-out to reassess the awarding of a management contract to a for-profit news organization.

The meeting was held at the offices of the Santa Barbara Foundation, which awarded a one-year contract to Noozhawk, an online publication, to manage Mission & State. News organizations including the Santa Barbara Independent, the Santa Maria Times and its affiliated publications, Casa Magazine, Edhat and the Pacific Coast Business Times have written to the foundation objecting to the arrangement.

During the meeting, Santa Barbara Foundation President Ron Gallo said he decided to select a “radical option” because Mission and State “didn’t work as the vision we had put together.” The initial management and news operations funding to Noozhawk was $67,000, Gallo said.

However, he said he was surprised by the negative response to the Noozhawk deal from competing organizations. “It never occurred to us that this would be the reaction,” Gallo said.

Lois Mitchell, president of the Orfalea Foundation and one of the funders of the original Mission & State project, said the best path forward would be to “call a time-out” and try a new approach to the project. Mitchell said there are “legitimate concerns” about the structure of the arrangement with Noozhawk, a for-profit enterprise that competes for daily stories with other area media organizations. Noozhawk is currently receiving funds from the foundation to manage what it envisions as future collaborative efforts on investigative news projects.

Gallo said Mission & State had burned through the majority of its $1 million initial funding and was going to fail if radical action wasn’t taken. The Noozhawk contract has provisions for a quarterly review, he said.

“I don’t see how Noozhawk can be the distribution point for competing media,” said Richard Flacks, a former UC Santa Barbara professor who advised the original project, which was conceived as a nonprofit effort to boost investigative journalism on the South Coast.

Melinda Burns, who wrote the original grant that received funding from the Knight Foundation and resulted in the founding of Mission and State, said she agreed with Mitchell that a time-out might be best.

Noozhawk founder and Publisher Bill Macfadyen said the idea behind the deal had been for his enterprise to partner with competing organizations and “use them and their audiences” to boost the Mission & State brand.

Former Santa Barbara News-Press editor Jerry Roberts said he thought the Noozhawk contract was a risk worth taking. In an online world, scoops matter less, he said, adding “exclusivity is dead.”