Rise of the Nonprofits

‘Stop Thinking About Competition’

The decline of some media behemoths has created space for a wave of nonprofits, with names like ProPublica, Chalkbeat and Texas Tribune. That sector is widely seen as ripe for growth.

(There is) an encouraging but still relatively small cohort of local nonprofits that have emerged around the country, and I believe this trend will accelerate.

Jim Friedlich Executive Director and CEO, Lenfest Institute for Journalism

Showing a public benefit.

It really helps to be a nonprofit if that’s your model. It really helps to have some sort of public benefit mission in messaging. Michael Silberman Senior Vice President of Strategy, Piano
I think that we do have to stop thinking about competition and more about collaboration, but that also has to come, too, from the nonprofits. Penny Abernathy Knight Chair in Journalism and Digital Media Economics, University of North Carolina at Chapel Hill

A hybrid idea was discussed at a recent international conference.

They talked about a hybrid model where perhaps the journalism goes under a nonprofit umbrella and the commercial part of the business remains for-profit. And perhaps for family-owned newspapers, this could be a model, because the nonprofit would allow them to get funding from community foundations, from donors and individuals, in a way that they can’t as a for-profit. And  so we’re very intrigued by the nonprofit model as well, and want to see how that plays out. Nancy Lane President, Local Media Association

An important trend, but don’t expect too much.

I think the rise of more and more both fully nonprofit organizations but also nonprofits that live inside for-profit journalism organizations is interesting. Seattle (Times) is an example of that, of the nonprofit centers within the for-profit organization. But I don’t know that we know enough about the long-term sustainability of those organizations. I think, if it’s a member-based nonprofit, then it ends up looking a lot like a subscriber-driven news organization. If we’re talking about something that is very foundation-specific, I think that’s a little bit more complicated. I’m not saying that it couldn’t work, but I don’t know that that’s automatically a better model than depending on subscribers. Jeremy Gilbert Director of Strategic Initiatives, The Washington Post

Is Texas Tribune a Lone Star?

Texas’ 10-year-old nonprofit gets plenty of praise, but some think it’s a model unlikely to be replicated elsewhere.

I think our industry really is having a reckoning in looking at what business models are working and where. I’m grateful to be in the nonprofit space, particularly grateful to work someplace with an engaged community of folks who are devoted to us and will support us with their hard-earned cash. Emily Ramshaw Editor-in-Chief, The Texas Tribune

Not doing what everyone else is doing.

I think one of the things that has made the Tribune very successful is its niche focus. We are not trying to be all things to all people. We are trying to make the biggest audience possible in Texas care deeply about politics and policy here. We don’t cover crime. We don’t cover cops. We don’t cover entertainment. We don’t cover sports. Those things tend to be sort of cash cows for regional news organizations. For us, it would require a really expensive extension of staff, a really expensive extension of reach. I think you’re seeing more and more news organizations sort of narrowing their approach, honing in on the thing they are going to own, and to me, that’s something that the Texas Tribune learned very early on, that I think could be extrapolated a lot of places. Emily Ramshaw Editor-in-Chief, The Texas Tribune

Maintaining multiple sources of revenue.

For us, from a revenue standpoint, diversity (of revenue) is really, really important. We don’t want to be beholden to a particular single revenue stream or a couple of revenue streams. We are very cautious about not putting our eggs in one basket here. Emily Ramshaw Editor-in-Chief, The Texas Tribune

The Tribune is a digital publication, but it’s not just a website.

For one thing, we don’t think about audience just as the people who come to our website. We think about our audience as the people we reach through a whole variety of means. The Texas Tribune has a free syndication model, meaning we give all of our journalism away for free. Newspapers all across the far reaches of this state, including publications that are in communities of color, run our work, and we have aggressively worked to ensure that those folks are publishing more and more of the Tribune’s work. Our stories and our reporters appear on TV stations and radio airwaves all around the state, in all the different markets we’re interested in, from the border to East Texas, almost Louisiana. We are aggressively working not just with our journalism but with the distribution of our journalism, to reach those audiences. Emily Ramshaw Editor-in-Chief, The Texas Tribune

The Tribune puts on more than 60 politics- and policy-focused events a year, including the Texas Tribune Festival.

It’s like Lollapalooza for politics and policy nerds, and (there’s) a small fee to attend but 300 panels, 10,000 attendees, over the course of a long weekend, once a year. Our events, all except for the festival, are free to attend. We also livestream them, by the way, so thousands of additional people can tune in and watch them. Those events are sponsored either by corporate underwriters or by foundations. Sometimes they’re part of a bigger package. A sponsor may have advertising on our site, and also an event sponsorship, and also run advertising on our podcast. We sort of build out these packages both for, again, foundations and for individual sponsors. The Tribune Festival, the three-day festival, is a ticketed event, but we make more than a million dollars in that single weekend, and that revenue is largely sponsorship underwriting. Emily Ramshaw Editor-in-Chief, The Texas Tribune

There are membership drives in spring and fall, and also crowdfunding around special projects.

I would say, on average, once a year, we have some kind of crowdfunding campaign that comes up around something big we’re doing. The family separation crisis on the border meant that we were just plowing through, basically, all of our travel budget for reporting for the year. It was a huge, huge expense for us. We hosted a crowdfunding campaign where we quickly raised $75,000 to keep our reporters on the ground and subsidized over the course of that ongoing controversy. Emily Ramshaw Editor-in-Chief, The Texas Tribune

Ramshaw said the Texas Tribune’s revenue has grown about 10 percent per year, “which is pretty unprecedented for any news organization in the nation right now.”

Many news leaders are impressed.

Texas Tribune is such a success story it’s hard to even think of anything that’s even remotely like it. I think there’s a lot of people that are working toward that right now. Mandy Jenkins General Manager, The Compass Experiment at McClatchy

But there are cautions, too.

One of the things I worry about is we always look to the Texas Tribune, for very good reasons. They do excellent work and they’ve got excellent leadership, and it feels like they’ve got to a relatively substantial place. But Texas isn’t local. Texas is the size of a big country. A.G. Sulzberger Publisher, The New York Times

The difference is strong financial governance.

What the Texas Tribune has done is remarkable, and I think serves as a model for what other markets can do. Which is, even though they are not-for-profit, there’s a lot of misunderstanding about what it means to be a not-for-profit. That you declare yourself a not-for-profit and the money just pours in. Would that that were true. So, they are a not-for-profit for a whole bunch of reasons, but from the get-go, they very much focused on growth and financial sustainability. Vivian Schiller CEO, Civil Foundation

Chicago’s WBEZ Means Business

In contemporary media, it’s sometimes smart for nonprofits to act like commercial operations in certain ways.

When attracting listeners becomes ‘customer acquisition.’

We’ve grown our member base by over 30 percent in the last four years because we’ve really been running it like a customer acquisition/retention business. We’ve now organized our membership team into a customer acquisition team, or a member acquisition team, and then a member retention team. ... We have very set goals about the amount of new members we need to bring into the organization. And then we are continuously working on improving our retention rates from our existing members. Goli Sheikholeslami President and CEO, Chicago Public Media

Becoming more than just a radio station.

We, for obvious reasons, have been doing a lot of work to expand our service beyond radio and audio. Or beyond terrestrial radio, to digital audio, and then also to … a text-based product. Goli Sheikholeslami President and CEO, Chicago Public Media

Boosting brand awareness.

We’re really focused on growing the audience. We still feel like there’s an opportunity to grow the audience to our traditional radio service. So, we actually, for the last year, and for the first time in the history of the station, have been doing an extended brand awareness campaign here in Chicago. Goli Sheikholeslami President and CEO, Chicago Public Media

The psychology of radio station pledge drives.

Vivian Schiller, the former CEO of National Public Radio, said the pledge drive is not a “blunt instrument” but is “based on deep research and learning about what resonates and what works.”

At its core is that it is the opposite of a transaction. It is a relationship. And, when the relationship between a public radio station and its local member who writes a check, or puts in a credit card, or whatever it is, is successful, it has a very sort of counterintuitive effect, in so far as you would think if I write a check to WAMU, my local Washington station, they are beholden to me because I gave them money. But actually, psychologically, the opposite is true. When I write a check … the act of giving them money makes me more beholden to them. So, when I get a tote bag, it’s not because I’m getting that as a purchase. I’m getting it because it is a symbol of this club that I’m a part of. And, when I carry that tote bag, I’m signaling something about my identity. And that is very, very, very, very important, and it is something that I’m seeing non-public radio stations struggle with. Vivian Schiller CEO, Civil Foundation

Many Faces of Philanthropy

Charities are trying to stem the bleeding from the local news crisis by financing work on innovations and bolstering newsrooms’ staffs.

Why journalism is part of the charitable mission.

Until recently, there was no particular reason for local philanthropy to be thinking about journalism as part of the health of a community, but they do need to think that way now. Steven Waldman Co-Founder and President, Report for America

Waldman’s program, Report for America, puts reporters in newsrooms by paying half of the reporter’s salary, with the local news outlet paying a quarter and a local donor paying the rest. If the arrangement continues for a second year, the news outlet pays more.

At the end of the day, we’re not going to solve this unless there’s a bigger role for nonprofit media. And I don’t just mean us. I mean, all of the nonprofit news start-ups and things like that. We’re a way that you can have the nonprofit sector help to support commercial media too, so that can be part of the solution. But one way or another ... if the nonprofit sector, including philanthropy, plays a bigger role, then that will be a transformation of local media in a healthy way. Steven Waldman Co-Founder and President, Report for America

Beneficiaries of charity: the arts, health care and news.

One of the dynamics that’s worth thinking about and talking about is that in a number of different markets there has emerged a philanthropic component to local news and it remains a small subset of the philanthropic support that local arts, environmental concerns or health care receive, or education receives, and there are people like the Democracy Fund who have numbers on this that can compare the size of each of those sectors, but it is absolutely growing. Jim Friedlich Executive Director and CEO, Lenfest Institute for Journalism

Foundations to the rescue.

Vivian Schiller’s Civil Foundation is giving grants for innovation, ethics advocacy, public engagement and newsroom education. And Mike Petrak, Executive Vice President of Tactician Media, cited philanthropic efforts by the Knight Foundation and the Lenfest Institute of Journalism.

These are rich philanthropic people who really care about local news and worry about the state of the free press in the United States, so they have created models that now allow local news in part to be financed through charitable trusts. Mike Petrak Executive Vice President, Tactician Media

The Philadelphia story.

While the Philadelphia Inquirer is a for-profit B Corp. for the public benefit, it is owned by the nonprofit Lenfest Institute, which was founded by cable television entrepreneur H.F. “Gerry” Lenfest.

So now there are new entrants to the market that are entirely new that say we care enough about journalism and it’s important enough in our community that we will support it through charitable grants and they’ve set up new economic models to do that, Philadelphia probably being the foremost. Mike Petrak Executive Vice President, Tactician Media

A prominent newspaper seeking nonprofit status is Utah’s Salt Lake Tribune, which has been for-profit for 148 years. It won tax-free status from the Internal Revenue Service in July 2019 and is now in the fundraising phase.

‘Community-funded journalism’ in Seattle.

Report for America is one example of nonprofits contributing to for-profit news operations. Another is the Seattle Times’ solicitation of charity funds to bankroll specific reporting efforts.

The community-funded journalism is probably one of the few unique things that we do. It’s not unique in newspapers because there are some nonprofits that do it, but for profit newspapers, we probably are the leader. And what we do is we ask outside funding sources, foundations, corporations and nonprofits to contribute to fund around a certain subject, and then we use that money to hire a team of journalists to cover that issue, and we started in 2015 with issue coverage called Education Lab. And in 2017 we launched Traffic Lab, which covers transportation, and Project Homeless, which covers homelessness. Don Shelton Former Executive Editor, Seattle Times

How Chalkbeat Found a Niche

As general-interest publications struggle, specialized news outlets like the Chalkbeat education websites are finding promising opportunities.

Where the money comes from.

By far, the biggest revenue stream at Chalkbeat is philanthropy. I would say it’s somewhere between 85, 90 percent. It’s a really strong mix of national and local funders, which is one of the things I think makes Chalkbeat a little bit unique, and it really goes along with our mission to do local first. … Typically, funding for our bureaus is actually largely local, and that money is really focused locally on the reporters and editors that are actually on the ground. Then we have a level of national funding that comes in over top of that and helps us with things like our gen ops for our networks.

Sponsorship is a growing part of our revenue. … That’s a mix of local sponsorships and national sponsorships. We had a great partnership with AT&T’s community foundation side where they were trying to reach a certain audience in Chicago and we were able to pair them up with an event that we were having in Chicago and they were a sponsor. They also had an anti-cyber-bullying curriculum in New York that they were interested in publicizing in our New York newsletter. We’re starting to be able to find these connections. Sometimes they are straight-up commercial operations trying to reach our audience, and sometimes they have more of a social mission. We also have a lot of continuing ed and professional development advertisers for our teacher audience and our educational admin audience. Then the other piece is membership, which we really put a focus on this year, and saw a big increase.
Maria Archangelo Chief Revenue Officer, Chalkbeat

Chalkbeat produces high-impact journalism, but also is moving beyond news.

Our strategic plan also calls for the creation of a lot of new products that may not be journalism products, but things that would serve our audience in different ways. We have a jobs board that we think has a tremendous ability to be built out. Perhaps there are city guides that would be relevant to people moving in to give them an understanding of the education landscape. Maria Archangelo Chief Revenue Officer, Chalkbeat

Finding ‘passion groups’ and serving them.

If you really, through data, know who your audience is and know who the people are that are passionate about your brand and your different content and experiences, can you build out those content experiences and overall experiences into something more robust that could either be sub-brands or standalone brands, but for which people really engage with you at a different level and may be willing to pay you? Whether that’s around prep sports, politics, lifestyle content and real estate, whatever it might be. Jed Williams Chief Strategy Officer, Local Media Association

The Green Bay Packers of Local Journalism

The cooperative movement brings news consumers into the news creation process.

Like a credit union, except for news.

It has a bunch of ways that it diverges from the other approaches to online news. Most distinctive is that its ownership model is the same as a food co-op or a credit union or something. It’s called consumer cooperative ownership, meaning that it’s owned by the end users, in this case a whole bunch of readers would own their local source of news the way that depositors own credit unions. And it becomes a widely distributed ownership of the news organization that is literally grassroots ownership. Tom Stites Founder and President, The Banyan Project

Stites, a veteran of The New York Times, Chicago Tribune and Kansas City Times, founded the Banyan Project to seed co-ops into underserved communities and offer them ongoing support. But is a co-op the answer for the local news crisis?

It has several advantages and some disadvantages. This is not a silver bullet. The advantages are that co-ops of all kinds, once established, rarely fail. They’re really, really robust and that’s because to get them to launch you’ve got to sign up a whole bunch of people as members before it exists. … But what really matters is that the engagement of the members in this organization is much deeper than the engagement that a lot of people are now trying to add onto existing news sites. This is the heart of it, you can’t get much more engaged than owning a piece of it. Tom Stites Founder and President, The Banyan Project

The Devil Strip culture news outlet in Akron, Ohio, is taking steps to become a co-op.

We did, last spring, a beta membership drive, so we have a group of about 150 people who on that NPR affiliate model, like ‘give out of the goodness of your heart’ kind of thing, and we had 150 people who did that. I shut that off. They’re to be grandfathered into what we’re doing next, but I realize it wasn’t going to grow the way we had designed it. Chris Horne Publisher, The Devil Strip

It’s comparable to the way the Green Bay Packers football team is run.

You get to vote on some big things. You don’t get to decide who the free agents are. You don’t get to decide the play calls on the field. But you have a say on some of these things and you get to feel a sense of literal ownership over the team. And that’s kind of what we’re going for here. Chris Horne Publisher, The Devil Strip

Being a co-op doesn’t mean limiting revenue sources. Far from it.

I’m getting into the nuts and bolts and things, but our hope is that will have four or five revenue streams developing over the next year. Advertising will remain one of them. I want to add business services to it, sort of consulting on storytelling or even content creation, where we can go in and help some small businesses figure out how to manage a Facebook page, how to do some of their own marketing, because you know ... some of them just won’t benefit from advertising with us. … And I hate taking their money if I know it’s not going to help them when there are other things they could do for less money and we can help them do that and it’d be less overhead for us. And whether the membership is more like a subscription and ownership as a separate thing or they’re the same thing. We’ll have to decide that over the summer. But that would be a revenue stream, turning the events into more profitable opportunities, whether that is as a driver for membership or it is public-facing stuff that actually we can hang sponsorship on, like Texas Tribune does. Chris Horne Publisher, The Devil Strip

The Devil Strip’s content will stay free.

The magazine is free. It will remain free. The website is free, will remain free. So instead of leveraging access to our content, we want to leverage access to community itself. … It’s selling the vision for a democratized form of American journalism. Chris Horne Publisher, The Devil Strip