How nonprofit newsrooms can learn to swim—or sink

Sustaining nonprofit journalism isn’t easy.

Sure, anyone can publish and distribute content, and anyone can build an email list, Twitter followers, Facebook fans. But to preserve the craft of nonprofit public-interest journalism—the kind that whistleblows, that nails institutions for wrongdoing or uncovers systematic failures—that’s a different matter.

It’s especially difficult for reporters and editors who attempt to fly solo with their own enterprises, having little business experience and very few resources. Many of these enterprises are part of INN, possibly the nation’s largest laboratory in sustainable journalism.

I stepped into my role at INN as a student documenting how its members struggle with various attempts at sustainability. One year later, I’ve learned that launching a news organization is far simpler than keeping it alive and that INN, especially, has found ways of supporting experimental business models that hopefully will help others.

Screen Shot 2015-04-13 at 12.28.17 PMBut let’s start with a Knight Foundation report published this month, on 25 nonprofit newsrooms. One of its biggest findings is that most rely heavily on foundation funding—not an unusual situation from INN’s vantage point. In fact, in 2013 some 58 percent of the total revenue composition of those nonprofits came from grant funding.

 

Unfortunately, this type of funding declined noticeably from 2011 to 2013, according to the report.

“Since 2011, foundation funding as a percentage of total revenue has decreased by 5 percentage points,” the report says, adding, “but even so, over half of sites get the majority of their revenue through foundation funding and two in five rely on foundations to supply 75 percent or more of their total revenue.”

Screen Shot 2015-04-13 at 12.28.34 PMFoundation and grant support “shrunk in 2013 relative to 2012 for 50 percent of the sites in this study,” the report said. 

Compounding the decline in funding is the difficulty of nonprofit newsrooms to raise money to cover general operations—or as we call it here at INN, “keeping the lights on.” About a third of the 25 nonprofits in the Knight report say less than 10 percent of their total revenue comes from earned revenue.

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Click image to download the full report.

Even if that’s a small number of nonprofits with such revenue disparity, it’s a stark contrast to the five news organizations that generate 40 percent or more in earned revenue for the same year: “the Rapidian (75 percent), the New England Center for Investigative Reporting (50 percent), the New Haven Independent (46 percent), VTDigger (42 percent) and MinnPost (40 percent).”

That’s the bad news. The good news is that, according to the report, nonprofit newsrooms are trending toward sustainability, often by experimenting with new ways to diversify their revenue. Anecdotally people running these nonprofit newsrooms believe that foundations should support their work because investigative journalism serves as a disinfectant for corruption. However, most admit that they are not taking that for granted and are opening up to find other sources of revenue, including sponsorships, memberships and advertising.

Enter the INNovation Fund.

INN’s former CEO Kevin Davis believed strongly that business experimentation was key to solving this revenue conundrum. Yet, he added, few nonprofit newsrooms were able to take the risks. He recognized that the editors, publishers and executive directors had too much at stake financially. 

Thankfully, the John S. and James L. Knight Foundation agreed with Davis; thus the INNovation Fund was started, serving its purpose as a cushion for nonprofits to take calculated risks in search of new sources of revenue. 

The long-term vision for the fund was so that nonprofits could experiment, we could document their results, and others could replicate their success instead of having to reinvent the wheel. After all, identifying revenue-generating best practices is at the core of INN’s mission, something Davis wholeheartedly preached.

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Since its launch in April 2014, the INNovation Fund has supported revenue experiments at 16 nonprofit newsrooms. Tomorrow, eight more will be funded. And by the time all of these projects conclude, we will have a better sense of which ideas work. 

Kevin also convinced me that in working with INN member organizations I was also stepping into the biggest journalism classroom any institution can offer. My homework was to document the trends, the best business practices, the failures in nonprofit journalism. 

One year into documenting experiments and best practices, here’s what I have learned from more than 100 nonprofit news organizations: 

Experimentation is worthwhile

Well-researched, goal-oriented projects were more likely to win grants from the INNovation Fund. Results from IowaWatch, Public Herald and FERN have helped us understand that there is a connection between an achievable game plan, setting realistic expectations and measuring success. Both Lyle Muller of IowaWatch and Tom Laskawy of FERN will tell you that success did not come easily. And even when those projects are in the minority, they paved the way to prove that even with limited resources experimentation has its rewards.

Raise money with a plan of action

Fundraising sprints are one of those tried-and-true sources of revenue that those in public media know too well. A number of other forms of fundraising have also emerged, and it has attracted a number of INN organizations to experiment with them including crowdfunding. (American Public Media has provided us with a crowdfunding playbook here.) Voice of San Diego has made a name for itself by rallying members, both big and small, through an outreach strategy that conditions readers to become “fans” of their work. Last year, Voice of San Diego used a similar strategy—adding some face-to-face meetings with big donors and online interaction with smaller donors—to raise more than $160,000 in just 30 days.  

Be intrepid in your storytelling

Many INN members do fearless coverage, both local and abroad every day. And for their efforts, some go on to win awards. Places like ProPublica, the Center for Investigative Reporting and the Center for Public Integrity usually take home all the awards, deservingly so, but we have also seen that intrepid reporting done by organizations with smaller budgets like 100Reporters, WisconsinWatch, inewsource, and the San Francisco Public Press. This is proof that meaningful and creative storytelling is not limited to the number of resources available to you.

When a storm approaches, learn to swim

Two major lessons I learned last year about the reliance on foundation money came from the Environmental Health Sciences (publisher of Environmental Health News and the Daily Climate) and Mission & State. Both suffered their own blows when foundation support suddenly came to an end. For Mission & State, it was fatal. Both serve cautionary tales that should encourage anyone, including aspiring news entrepreneurs, to pursue more diverse forms of revenue rather than rely heavily on philanthropic support. The annual Community Journalism Executive Training is INN’s way of providing a place where executives can learn how to swim in new and unpredictable waters.

In my 12 months here at INN, the leaders at these nonprofit news organizations and my fellow journalism colleagues have reinforced the idea that the jury is still out and the journalism industry is not all a downward trend. The web has disrupted the old model of journalism sustainability, but it has also opened up possibilities on how to engage and deliver the news. Just take a look at the work of Josh Stearns and Molly de Aguiar, for example, where they document creative experiment in journalism sustainability in the New Jersey ecosystem. Like the INNovation Fund, the Local News Lab also seeks to find ideas that marry engagement and funding.

Almost every journalist who has branched out with his or her own independent news organization (at least the ones I have met) learns that the path to success is easier said than done. Some formulas have already proven reliable, while others are still in development. I am hopeful for those willing to take risks and iterate outside traditional forms of journalism. The future of news belongs to them.