Knight Blog

The blog of the John S. and James L. Knight Foundation

Big questions face news nonprofits on the road ahead

Sept. 26, 2013, 11:26 a.m., Posted by Elise Hu

Above: Participants gather for a Pew Research Center and Knight Foundation roundtable on the stability of nonprofit news. A full video of the discussion will be available soon.

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"Rieder: Support crucial for non-profit journalism" in the USA Today

Dozens of nonprofit newsrooms sprang up in the latter part of the last decade, fueled by public service ambitions as legacy newspapers were taking major blows or blinking out of existence. Many of those newsrooms have grown, innovated and found pathways to sustainability in recent years, while others didn’t make it long enough to see 2013.

To discuss the lessons learned, the Pew Research Center and Knight Foundation hosted a roundtable in Washington, D.C., on Friday for the current stable of news nonprofits and many of their foundation funders to talk sustainability, impact and scaling questions that lie ahead.

“We charged into this space with our hearts” and not our heads for all of the right reasons, said Michael Maness, Knight’s vice president for journalism and media innovation.  But that approach has created “a cascade of issues,” he said, which has highlighted the need to think more like developers and less like publishers.

This year, separate reports by Pew and Knight have detailed that operational, social, financial and technical challenges have kept some of these newsrooms from reaching sustainability. The organizations surveyed vary from one-person staffs to Pulitzer Prize-winning newsrooms of more than 40, so the goals of the organizations can widely differ. That also makes it unclear how to measure their progress as one group.

Here are five takeaways and questions to consider from Friday’s roundtable discussion:

1) Journalistic talent doesn’t equal business development strength. Acknowledge it and try new things.

“The thing that is most striking to me is how different the entrepreneurial impulses of the [nonprofit newsroom] leadership is,” said the Wyncote Foundation’s Feather Houstoun. “If you talk only about what proportion is spent here versus there … you’re missing that the leaders might just not have the entrepreneurial bone in their body. And that’s a big part of why we’re having this conversation. In the DNA of the organization, they’re never going to make it.”

The smaller shops represented on Friday say just keeping the lights on can be a struggle. One proposed solution is to centralize the technological works central to newsrooms and to offer a consistent exchange of ideas so the organizations can learn from one another. One example of this idea at work is the Investigative News Network, a consortium of news outlets, many of them nonprofit. It has deployed WordPress based-technological solutions for content management, and is working on more technology to serve smaller newsrooms that have fewer resources.

“You really need to get away from what the look and feel was of how you came out of a news organization before,” said Maness, emphasizing that the speed of disruption in the media and technology space requires being aggressive about trying new things and throwing out what doesn’t work.

2) Know thy self. What kind of results are you after?

In many cases, comparing the organizations is like comparing apples to jetliners. There are operations run on a shoestring and multimillion-dollar operations like Pro Publica. Some newsrooms just cover health, while others touch on topics from the environment to open government. The size differences of the newsrooms means one model doesn’t apply to the group as a whole, so it’s important to establish priorities that fit the organization. That allows the organization and external groups, like funders, to establish proper benchmarks for measuring success.

“What we’ve realized quickly is we can force grantees to measure, but we have to convince them that getting this information is valuable to their own business,” said the Gates Foundation’s Dan Green.

That type of self-examination and diversity also means taking a critical look at the newsroom’s goals and how they align with reaching the proper audience.

While goals may differ by organization, ProPublica’s Dick Tofel said it’s key for them to be open about what they are. “I believe that transparency is critical to this. If you are willing to decide what you think is important and then tell the whole world on a regular schedule quite publicly, by human nature you’re going to drive to that.”

3) Diversify your revenue sources, but diversify how you spend it, too.

“Institutional foundations cannot fund you for 20 years in a row,” said Tofel. “They could but shouldn’t and it’s not their job to send a general operating support check to a place for years in a row. They should be more venture capital.”

Not only have the sustainable news nonprofits reduced their dependence on institutional foundation money, they have also devoted a good chunk of their spending to priorities beyond editorial expenses.

Organizations such as the Austin-based Texas Tribune have increased their earned revenue opportunities through sponsored events and corporate sponsorships for niche products. But the Tribune also spends $200,000 to host an event that earns $1 million, underlining the notion that it takes capital to earn capital. That kind of willingness to spend on business development isn’t in place across the ecosystem yet.

4) Size matters.

The development of business-thinking muscles and strength had led to a boon in earned revenue for places like the Texas Tribune, which breaks down its spending approximately in thirds, on editorial, business development and technology. But organizations that don’t have the kind of heft to get there are partnering up; for example, a merger between the nonprofit St. Louis Beacon and existing St. Louis Public Radio holds promise for both sides.

“[St. Louis Public Radio], they have a big base of small donors, we have a big base of large donors. I think there’s an issue of size here,” said the Beacon’s Margaret Freivogel. “So many organizations are very small and producing content sporadically. That’s a problem on the business side and a problem on the impact side. And that’s a central problem all of us have to think about if we’re really going to fill the gap we saw opening up, it takes some size to do it.”

Jeff Jarvis, a media critic and director of the Tow-Knight Center for Entrepreneurial Journalism at the City University of New York, sees potential in networked journalism. “A new site can get an audience faster from being embedded on the big sites. Get exposure and join in on revenue opportunities,” Jarvis said. “We want a collaborative infrastructure in the ecosystem.”

5) Making the case for why nonprofit newsrooms are important also matters.

The public service mission of nonprofit news organizations — the reason why they chose to be nonprofit and not-for-profit in the first place — remains a key reason why so many people feel passionate about the work. And the work being done as an ecosystem needs broader public understanding, not just because the journalism is making a difference, but also because reaching a wider audience can tap money that’s being left on the table.

“When you look at winners of the new economy  — Apple, Google, Verizon, AT&T — the amount of money that those four made in a quarter is $24 billion. Not revenue but profit,” Steve Waldman, founder of Daily Bridge Media. “If the winners of the new economy put even a tiny bit of their wealth into this as an issue this whole space would be transformed. All this conversation today about how to be effective, bang for the buck, we should absolutely do that. But it still matters that there are huge entities that are on the sideline in this debate with the ability to have a massive impact.”

Elise Hu covers the intersection of technology and culture at NPR and serves as an adviser to Knight Foundation.