Media Advocate Nancy Lane: Philanthropy Joins Digital Subscriptions as Key Funding Source

As much of the local news industry hammers away on a financial strategy emphasizing digital subscriptions, Local Media Association CEO Nancy Lane says this approach should be paired with efforts to gain philanthropic support. Here’s an edited transcript of an interview of Lane by the Medill Local News Initiative’s Mark Jacob.

  • Mark Jacob

    Are digital subscriptions growing fast enough to help local news outlets, especially legacy outlets, reach financial sustainability?

    Mark Jacob
  • Nancy Lane

    Some are doing quite well and others are struggling. And I think there are a lot of factors at play, depending on the market, the ownership structure, the size of the newsroom. We don’t think digital subscriptions alone are going to do it for anyone. It’s part of the equation but not all of it.

    Nancy Lane
  • Mark Jacob

    You’re referring to other revenue sources like advertising and charitable gifts and things like that – diversified revenue streams, right?

    Mark Jacob
  • Nancy Lane

    Correct. We believe that journalism funded by philanthropy needs to go hand-in-hand with digital subscriptions to cover the cost of the newsroom. So that is a change for us in the last year. We’ve been following it for a while but now we see it really working. We are hearing one after another success story where large numbers of reporters are being covered by philanthropy. And this is a welcome change. It makes us feel better about “reader revenue plus”: Reader revenue plus journalism funded by philanthropy equals a winning combination. Just thinking that reader revenue, digital subscriptions, was going to lead to long-term sustainability — we never thought that would be the case alone. Advertising is declining, so it’s not going to be advertising. So where was the rest of the money going to come from? And we’re so excited by what we’re seeing through philanthropic efforts.

    Nancy Lane
  • Mark Jacob

    Can you give us a couple of examples?

    Mark Jacob
  • Nancy Lane

    The Seattle Times has 18 reporters funded by philanthropy in its newsroom. Eighteen. The Fresno Bee has 10 journalists funded by philanthropy  — more than a third of its newsroom. Newspapers all over the country have reporters who are partially funded by Report for America — hundreds of reporters now funded through RFA. The list goes on. We’re working with leaders of a small newspaper right now that just received a $500,000 donation to set up a community journalism fund. And they believe when all is said and done, it’s going to be about a $2 million fund for this small newsroom that could fund 3-4 reporters a year for a very long time.

    Nancy Lane
  • Mark Jacob

    We recently wrote about ProPublica. They’re funding reporters that they’re keeping in legacy news outlets. For example, the Chicago Tribune has an excellent investigative reporter named Jennifer Smith Richards. For three years, ProPublica is going to pay her salary and benefits while she sits in the Tribune newsroom and works on joint projects with ProPublica.

    Mark Jacob
  • Nancy Lane

    That’s another great example. The Miami Herald, too, has an investigative reporting fellow that was made possible by a $2.5 million gift. There’s an endowment that’s been established. And so they will have someone early in their career working on investigative reporting for years to come. Every time you turn around, you’re hearing about these examples.

    Nancy Lane
  • Mark Jacob

    This sense of philanthropy may change how we think about digital subscriptions. Many news outlets worry when new subscribers don’t engage much online, but you have a different view on that.

    Mark Jacob

I think every community has a certain percentage of people that want to support that local newspaper even if they’re not accessing it as much as you’d want them to.

Nancy Lane, CEO, Local Media Association
  • Nancy Lane

    I think there are people in communities that just want to support the local newspaper, and maybe they also get the print product. I think every community has a certain percentage of people that want to support that local newspaper even if they’re not accessing it as much as you’d want them to.

    Nancy Lane
  • Mark Jacob

    In effect, it might be a charitable contribution in some cases.

    Mark Jacob
  • Nancy Lane

    It certainly is. That is a big part of what’s going on here. When we worked with 200 local newspapers on the COVID-19 Local News Fund and they raised $1.8 million collectively to fund their journalism, 70 percent of the donors were subscribers. So subscribers are willing to do even more than the cost of their subscriptions because they’re the super-users, they’re the super-fans.

    Nancy Lane
  • Mark Jacob

    You make a strong case for philanthropy’s importance along with digital subscriptions.

    Mark Jacob
  • Nancy Lane

    I’ll just throw out one other good reason. The journalism that’s being produced through this [philanthropic] funding has higher conversion rates for digital subscriptions. If you talk to the Philadelphia Inquirer — because they’re involved in Resolve Philly and Spotlight PA, both of which are funded by philanthropy — the reporting that is coming out of those collaboratives increases their digital subscriptions at a higher rate than other stuff that they do at the Inquirer. We hear this over and over again. I’ll throw out one more reason. I don’t know why it doesn’t get discussed in the industry, but when you are funded by philanthropy, you can put some of your content outside the paywall. And if we’re going to be essential to a healthy democracy, we need some of this content, investigative-journalism type content, outside of the paywall. We’re all for reader revenue. We’re all for people paying for content because it’s expensive to produce, but we’re also for the essential role that we play in helping democracy. That’s why I say putting the two together is really the winning strategy, in our opinion. Every day we’re feeling stronger and stronger about that.

    Nancy Lane

About the author

Mark Jacob

Editor

A former Metro Editor at the Chicago Tribune and Sunday Editor at the Chicago Sun-Times, Jacob is chronicling the Local News Initiative’s progress for the project’s website. He is the co-author of eight books on history and photography.

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