Reader Revenue – Donations, Membership, Subscription

Reader revenue

Many established nonprofit news organizations ask their audience to support their journalism. This tends to involve some reader education because people are no longer accustomed to paying for news. With that in mind, it’s important to have a plan in place as you form your organization as to how you will engage and educate your audience to financially support you.

Individual donors

The education process begins as soon as you launch. Individual donors are those readers whom you will appeal to on an ongoing basis to support your work whether passively through a “Donate” button on your website or through email solicitations and social media appeals.  Many newsrooms use social media to build their email list.

Building an email list is critical to a individual donor strategy for several reasons: email offers a nonprofit newsroom direct communication with its audience about the mission and the organization; email solicitations offer the highest return on investment (ROI) of any donor solicitation strategy; email can be used to distribute news content that is timely or targeted. Individual donor programs tend to work best for newsrooms with a direct audience since there are direct communication channels.

RESOURCES:
Nonprofits need an Individual Donor plan
3 Ways to Grow Your Email List
7 Emails for all year engagement

Membership

Many newsrooms consider membership to be the ultimate indicator of an engaged audience. A nonprofit can employ both individual donor and membership strategies in a sequenced process – a membership program is usually built from a base of individual donors.

How does a member differ from an individual donor? In some newsrooms the terms are synonymous or donors at a certain level of giving are considered members and are treated as such. Both donor and member giving can entail a predictable gift on a recurring schedule – weekly, monthly, yearly. The general distinction is that donors give but receive no tangible, ongoing benefits for their donations while inherent in a membership is a benefit exchange: a t-shirt, access to events, special communications, etc.

Additionally, most nonprofits use the recurring nature of the gift  vs. a one-time donation as the differentiator for membership. The important benefit of a membership program for a newsroom is that it creates a predictable revenue stream that helps with operational planning and determining annual fundraising goals. Readers, especially those who join membership programs that offer minimal benefits, are sending a strong signal that they buy in to the organization and its mission. Knowing who these readers are is quite beneficial to the newsroom since these individuals can be cultivated to champion your mission, attend your events and connect you to potential donors.

RESOURCES:
Guidebook on how to build a membership revenue model to support local journalism
How nonprofit media can build a strong membership base
Tapping into the membership economy

Subscriptions

The subscription economy is alive and well. The success of Amazon and Netflix have shown publishers that users are willing to pay for digital content. In 2016, The New York Times saw a 60 percent increase in digital-only subscriptions over the prior year. What’s the key to that kind of growth? An election year didn’t hurt, but according to The New York Times 2020 Report, the key to their success is strong, high-quality content.

How can a nonprofit news startup adopt a subscription model? A startup may have a significant and loyal audience that it ported over from a defunct newsroom. Because of the previous relationship, that audience may be willing to pay for content at the start. A more likely scenario is a freemium model where the content is initially free, to build audience. Once the newsroom has an established audience it may venture into creating specialized, high-value content for a subscription premium.

RESOURCES:
Guide to Audience Revenue and Engagement
Advertising vs. Subscription
The Membership Puzzle Project
(Video) Tow Center: Guide To Audience Revenue and Engagement