There’s no “right” revenue mix for nonprofit news, but the role of philanthropy can evolve
The end of a year always lends itself to reflection. And the beginning of the new year comes with resolutions. This is where my head has been over the past couple of weeks. Reflection. Resolution. Reflection. Resolution.
In the middle of a pandemic in 2020, I left my job at a local public radio station to run NewsMatch*, one of the largest collaborative fundraising campaigns for independent journalism. The program has supported more than 300 newsrooms by leveraging the power of matching funds to spark millions of donations from communities around the U.S.
Stepping into this role allowed me to shift my perspective and gain a birds-eye and on-the-ground view of what was happening in journalism. Through office hours and focus group sessions, I’ve listened to more than 60 nonprofit newsrooms discuss their fundraising efforts. I’ve heard about the challenges they face and the new approaches they’re taking. I’ve met recent development hires entering the field, talked to newsrooms about their major donor strategies, edited donation appeals, helped newsrooms troubleshoot messaging that wasn’t working midway through their NewsMatch campaign and more.
These nonprofit newsrooms are often an antidote for the shortcomings of traditional journalism — they are nonpartisan, most are entirely digital products, their coverage is shaped by an acute understanding of community needs, leaders are innovative and entrepreneurial, staff are more representative of the diversity of their readers, and so on.
These experiences are one of the privileges of being in my position. As I read reports of declining local news sources and its sobering consequences, I am also hopeful. This hope comes from the grounded awareness of how nonprofit newsrooms are surviving.
Since 2017, the Institute for Nonprofit News (INN) has been surveying its membership to assess the state of the field. Data from the first INN Index survey showed that 57% of revenue going to nonprofit newsrooms came from foundations. In 2020, that dropped to 47%, which is a good indicator that the funding sources are becoming more diverse.
The collapse of the ad revenue model to support journalism has had devastating effects. Since 2004, more than 1,800 local papers have closed, and it’s only gotten harder for many smaller newsrooms in the face of a pandemic and economic crisis.
While there is a sense of urgency to fill this void, it’s only natural to want to avoid making the same mistakes — bolstering unsustainable, resource-intensive operations that rely too much on a single revenue source. Yet nonprofit newsrooms rely on institutional giving for good reason. They operate as a public service to their communities.
Among nonprofit news organizations, those that report in-depth coverage on a single subject like education, science, or criminal justice see shares of foundation funding that are higher than the rest of the field. The same is also true of newsrooms serving immigrants and communities of color, with the highest share of 62%. As nonprofit newsrooms actively pursue individual giving and business sponsorships, foundation funding (at least for now) remains essential to the existence of independent news organizations producing hard-hitting journalism that is grounded in the communities they serve.
One of those newsrooms is Sahan Journal, one of the only independent digital outlets producing daily news for and by immigrant communities in Minnesota. When reporting on the permanent school closure of a school that predominantly served East African families, education reporter Becky Dernbach realized that parents weren’t even aware of the closing. In response, Sahan Journal collaborated with a local Somali TV channel to host a live event with school representatives and community members on the issue. This is what we mean when we say journalism is a public service.
In the first half of this year, Sahan Journal has already raised nearly twice the amount in individual giving as they did during the same period of time last year. A case study by INN earlier this year shows that the outlet is on track to see even greater increases in 2021. They’ve also recently hired an advertising and sponsorships director who has helped increase sales by three-fold within the first nine months of working for the organization. Yet even as they were growing rapidly and following all the best practices to become a sustainable operation last year, 70% of their revenue still came from national and local foundations.
How newsrooms doing public service journalism like Sahan Journal will sustain themselves for years to come is one of the leading questions facing the nonprofit news field. There are hundreds of more examples like this. These nonprofit newsrooms are often an antidote for the shortcomings of traditional journalism — they are nonpartisan, most are entirely digital products, their coverage is shaped by an acute understanding of community needs, leaders are innovative and entrepreneurial, staff are more representative of the diversity of their readers, and so on. But the business model question remains. While these are the types of newsrooms communities desperately need, no one is entirely sure of how to sustain them.
My job puts me in the middle of two worlds — the newsrooms on the ground and the funders that support them. What I’ve come to realize is that there is no “right” revenue mix for nonprofit news. It’s just too early to tell. However, the role of philanthropy is working and has room to evolve.
In my opinion, it boils down to making philanthropic investments that not only fund quality news for today but also put newsrooms in a position to fund quality news for tomorrow. Here are a few ideas:
Invest in the business operation itself
In 2021, Local Independent Online News (LION) Publishers introduced a framework that examines the three drivers of financial sustainability for independent news organizations. The matrix calls for organizations to not only have journalist impact, but also financial health and operational resilience.
Quality journalism leads to more informed and engaged communities, but this news would not exist (or at least not for long) if the organization producing it is unstable. By offering general operating support, funding new development positions, or offsetting the costs of technology and system integrations, funders can build the infrastructure newsrooms need to generate donations, sponsorship, and services that will help fund the work. Building capacity builds journalism.
Leverage philanthropic investments in a way that grows other revenue streams
We’ve witnessed the power of the collaborative approach through NewsMatch, an annual fundraising campaign that takes place November through December each year. The program centers on a collective fundraising model that leverages the power of matching gifts from a coalition of national funders to build a groundswell of community support.
Since 2016, this program has grown from one national funder supporting 57 newsrooms to 17 funders supporting 300 in 2021. Catalytic matching grants at the national level have helped generate 2.3 million contributions from individuals, totaling more than $150 million.
While growth in individual giving has been a central marker of success for the program, we also noticed something bigger was happening. The program has motivated major donors, foundations, and small businesses to mirror national funders at the local level — increasing the pool of matching funds to newsrooms in their community with direct gifts.
In 2020, $4.4 million in national NewsMatch funds and partner funds helped unlock an additional $3.1 million in local funder matches and $47 million in individual donations for 260 newsrooms. This means that every dollar into the NewsMatch seed fund results in 11-times the amount of support to newsrooms from individual donors, family and community foundations, and local businesses.
Give place-based and topic-focused foundations new ways to achieve their goals
By far, this is one of the greatest opportunities to fund the quality news of tomorrow. What we read and hear shapes how we understand the places we live in and come from. That’s why fact-based journalism is an essential tool for those seeking to make a systematic impact in a particular community or on a particular issue area. It’s not just about expanding how philanthropic dollars are invested in strengthening nonprofit news organizations but also which types of funders are investing in them in the first place.
As with the families that Sahan Journal engaged through its reporting, when people are provided access to trusted information they gain understanding about the issues that impact their lives and are able to make informed decisions, advance solutions, and work with one another to take action. We see this happening on so many occasions within the nonprofit news sector, like when The Imprint collaborated with the local paper to investigate the use of out-of-state, abusive facilities to house foster youth, which led California to ban the use of such places or how PolitiFact worked with health experts to debunk more than 700 claims about COVID-19. This happens on many occasions across a number of other issues like education, the environment, housing, food security, and so much more.
Investing in quality news sources is a way to build engaged and thriving communities. It is a worthy philanthropic cause. And it’s not all about foundations: there are in fact many efforts and programs like NewsMatch to grow individual giving, others that target business sponsorship dollars and, more recently, the possibility of public funding at the national and local levels. Yet, as the field evolves and the business models along with it, philanthropy will still play a powerful role.
To find a nonprofit newsroom to support before Dec. 31, visit findyournews.org.
*NewsMatch is generously supported by Democracy Fund, Knight Foundation, the Meta Journalism Project, the Bernard and Anne Spitzer Charitable Trust, Google News Initiative, Inasmuch Foundation, the Independence Public Media Foundation, the Jonathan Logan Family Foundation, Loud Houd, Natasha and Dirk Ziff, the Present Progressive Fund at Schwab Charitable, Sarena Snider, the William and Flora Hewlett Foundation, Walton Family Foundation, and the Wyncote Foundation. Dozens of local and issue-based funders are also secured by newsrooms, increasing the pool of match funds during the year-end campaign. Learn more at inn.org.