This is cool.  It looks like innocentive meets reporting. I like the UI and the basic business model.  I would consider tweaking it in 5 ways.

1. Shoot for much smaller amounts. Maybe ask to create an entire paper or magazine for $20-25. You contribute an amount and then get to vote proxies all over the board. When any of your stories are "done" you get mailed the link.

2. Let the network of supporters that have already put money into the system connect with each other, reporters and influence articles.  An editorial board needs to debate a bit with each other and make it clear to the reporters what they expect.

3. Let advertisers buy space next to features in the pipeline. (they would reduce the costs but not have editorial board influence as articles get shaped).

4. Let people "buy credits" for other active users on the site.  What if i Really like the instincts of one of the editors ..can I just buy credits on their account and let them shape the paper on my behalf.  Or sponsors could purchase a bunch of credits for a class of students, community activists, etc.

5. Figure out a way to embed the entire workflow into other community sites. (Like the entire MediaConsortium ) so that donations and ideas aggregate from across a universe of sites.

Great project!  I hope it goes national.

spot.us.

Spot.Us is a nonprofit project to pioneer “community funded reporting.” Through Spot.Us the public can commission investigations with tax deductible donations for important and perhaps overlooked stories. If a news organization buys exclusive rights to the content, donations are reimbursed. Otherwise content is made available through a Creative Commons license.