5 Reasons that 2020 Was the Year of Nonprofit Local News
By: Mark Glaser
Tags: Donations, Knight Local, Nonprofit, Local News, Newsmatch

As legacy media struggled during the pandemic, many nonprofit outlets shone, with NewsMatch as a catalyst for bringing in more donations

In the narrative about the struggling local news business in America, we hear mostly about layoffs, pay cuts and even closures of publications this year due to the pandemic. But what we rarely hear about is the resilience, the staying power and the growth of nonprofit local news. In 2020, the membership of the Institute for Nonprofit News (INN) rose by more than 25% — reaching a total of 300 nonprofit news organizations for the first time.

“Perhaps the most striking change over the past few years is that so many more people now get their news from nonprofit sources,” said Sue Cross, executive director of INN. “Our membership has just about tripled since 2016, and our distribution channels have expanded, to the point that when you add in social media, we can’t quantify how many millions of readers the INN network is reaching every day.”

Yes, it’s true that nonprofit is a tax status and not a business model, and the need for diversified, sustainable long-term revenue remains a constant issue. But nonprofits have led the way in seeking out reader revenue, donations and memberships that have longer staying power than advertising — and have the added bonus of bringing community members closer to the publication. They’re also more likely to have female executives than legacy publishers, and have started to reflect the diversity of their communities.

This is not a new phenomenon, but just one that’s flown under the radar. The nonprofit Associated Press and public media stations have been around for decades serving local audiences. And public media honed the “pledge drive” crowdfunding idea with perks long before Kickstarter or Indiegogo were launched. National investigative outlets such as the Center for Investigative Reporting (launched in 1977) and the Center for Public Integrity (launched in 1989) showed just how impactful the nonprofit model could be for doing deep dives into important topics.

But only with the more recent wave of local online nonprofits such as Voice of San Diego and Texas Tribune has the idea of replacing lost newspaper reporters within nonprofit newsrooms become viable. But even this first wave of local nonprofits was often a group of laid-off newspaper journalists who had no idea how to make money. The solution: “let’s launch a nonprofit newsroom so we don’t have to figure that out!”

The reality is that nonprofit news outlets require the same dedication to the bottom line, even if they are not beholden to shareholders or investors. And on that front, the latest INN Index of member revenues showed less reliance on foundation grants and more income from recurring donations and memberships. The American Journalism Project (AJP) has been instrumental in supporting a range of nonprofit newsrooms by making sure they have the business resources to succeed.

This year, that kind of stability is important, as the pandemic has required clear and accurate information for communities that are hurting.

“The last year has made clear the importance of timely and truthful information that helps us to better understand the issues of our day and each other,” said Josh Stearns, program director of Public Square at the Democracy Fund. “COVID-19, economic recession, racial justice uprisings, and a polarizing election have demonstrated with glaring clarity the vital role of local news to our personal health and safety as well as the health and safety of our democracy. But even before this year, the data was clear that when communities lose local news we see lower voter turnout, fewer contested races, and more government corruption and waste.”

(To see how INN has grown around the country, or to see the AJP grantees mapped out, check out Knight’s Civic Bright Spots Map and choose those layers.)

The following are five reasons nonprofit news has come of age this year.

A business model tailored for tough times.

The COVID-19 pandemic hit all newsrooms hard, but nonprofits were much less reliant on advertising from local businesses, which have struggled under lockdowns. And while it’s true that a recession and massive layoffs meant that there is less money in the economy at large, community members are more attuned to charitable giving, especially when news organizations are providing a crucial, timely resource.

Not only is nonprofit a tax status for the news organization; it also means that donors can write off their donations on tax returns.

“Nonprofit newsrooms do have a leg up when it comes to generating revenue from individuals in the form of membership, individual donations, etc.” said Cierra Hinton, executive director and publisher of Scalawag, who also coaches newsrooms at the Facebook Sustainability Accelerator and UNC-Knight Table Stakes Initiative. “Especially when we think about major and institutional gifts, gifts that are large enough to immediately and significantly contribute to the sustainability/expansion/growth of an organization, tax deduction and the rules of grant making are easier to navigate for nonprofits-though not impossible for for-profits.”

Hinton also noted that nonprofits have more consistent revenue sources than for-profits, who have benefited this year from a massive boost in election and census advertising dollars, as well as government assistance through COVID-19 relief programs.

“I especially wonder what that means for next year when elections and census [revenues disappear] and we have no stimulus in sight. How recession-proof is the advertising stream?”

2. NewsMatch connects more funders to nonprofit news.

As INN has grown, so has a companion program called NewsMatch, which doubles and sometimes triples each donation to a nonprofit newsroom from November 1 to December 31 each year. That funding comes from a growing list of foundations. Some local newsrooms have even tapped into local foundations to triple-match donations. The combined philanthropic, corporate, and donor investment in nonprofit news through NewsMatch has gone from $2.5 million in 2016 to nearly $9 million in 2019.

Democracy Fund’s Stearns noted that NewsMatch has been key in the growth of nonprofit news in three areas:

1) as an on-ramp for new funders for media

2) equipping newsrooms with the tools and strategies they need for fundraising

3) helping publishers grow as they make deep connections to their communities

“Through NewsMatch, thousands of new people have donated to local news and investigative reporting, dramatically expanding reader revenue as a source of funding for nonprofit journalism,” Stearns said.

More than just providing money to nonprofit newsrooms, NewsMatch also includes hands-on support for fundraising, helping to build infrastructure for years to come.

“It’s really helpful at connecting the work we do to donors and foundations,” said Candice Fortman, executive director of Outlier Media. “NewsMatch chips away at that. When you are small and don’t have a development person, it makes you sit down and think about your strategy around fundraising. For two months you have a development person at INN and NewsMatch who helps you think about emails and social media, and who you should be targeting, and small newsrooms don’t typically have that help throughout the year.”

Along with NewsMatch, there have been specific days like #GivingTuesdayNow this past May 5, which helped bring in an influx of donations for nonprofit newsrooms.

3. For-profits are becoming more like nonprofits (or just converting to them).

Let’s face it. Many “for profit” publishers in local news are barely scraping by, let alone making huge profits. Most large newspaper chains are owned by extractive hedge funds more interested in stripping away assets than serving the public.

Is it that big of a stretch for many for-profit publications to become nonprofits? In fact, there have been three interesting threads happening as for-profit newsrooms look more and more like nonprofits:

Increasingly, the line is blurring between for-profit and nonprofit newsrooms. However, nonprofit newsrooms that are members of INN are required to abide by designated standards in editorial independence, ethics and transparency.

4. Nonprofit news outlets are becoming more diverse and covering underserved communities.

It’s been a long road to diversity at nonprofit newsrooms but this year showed some progress. Half of nonprofit news executives and 60% of employees are women, according to INN’s report on diversity, equity and inclusion this year. According to INN, nonprofit news organizations are more diverse than traditional newsrooms but still less diverse than the public at large. Moreover, only 1 in 5 executives and board members are people of color at nonprofit newsrooms.

One bright spot is among newly launched nonprofit startups over the past few years; 10 of 24 startups that joined INN from 2017 to 2019 reported that people of color made up 40% or more of the staff. Plus INN notes that many of its publications are now serving bilingual or communities of color, including Canopy Atlanta, Documented, El Timpano, Indian Country Today and Sahan Journal. And those newsrooms are also transforming how news is produced and distributed, with Canopy Atlanta selecting news topics in collaboration with local residents.

“Diversity is a real question for nonprofit journalism,” said Sarah Alvarez, founder and executive editor of Outlier Media. “It’s easier to start from scratch, like building a new house versus renovating an old one. Smaller news organizations can create from scratch instead of just fixing old problems, which is great, it’s a real pathway to doing news. At the same time, what we’re up against is tremendous, including a toxic legacy in our industry, and we aren’t resourced the same way that an organization meeting these challenges needs to be effective. Very few nonprofits are funded to do the work that they’ve set out to do.”

Scalawag’s Hinton says she does feel like she’s seeing more non-white people in the business than a few years ago, but “there are still not nearly enough.” But she sees potential for change.

“Nonprofit news definitely has the potential to be the way we bring in more diverse leadership and grow the number of journalists of color and other journalists with underserved backgrounds (we need more journalists that identify as poor and/or working class),” Hinton said. “Though there is something to be said for the for-profit model and people of color in particular having ownership and equity in the businesses they run, launching a business is hard, growing a business is even harder, and having at the very least a board of directors and an association and network like INN getting tools and resources to you certainly helps.”

5. Collaboration has become a way of life for many nonprofit newsrooms.

Some of those early nonprofit newsrooms like CIR and Center for Public Integrity were known for collaborating with larger, established news organizations to help distribute their work to wider audiences. And in some cases, the collaboration included reporting on a topic together as in the “Post Mortem” investigation by ProPublica, NPR and Frontline. That work has continued at the local level, with many city and regional collaborations funded by the Solutions Journalism Network, and ProPublica doing local investigations with partners in its Local Reporting Network.

Nonprofit newsrooms have worked together on election coverage, and also held Chicago Mayor Lori Lightfoot accountable to the promises she made on the campaign trail in the “Lens on Lightfoot” collaboration. That effort included newsrooms such as Chalkbeat Chicago, La Raza and Block Club Chicago, as well as the Better Government Association, with funding from three foundations.

INN has also helped to spearhead distribution deals with various partners, including Spotlight, News Break, Patch, Nextdoor and Flipboard, allowing more people to access their members’ work.

“With many of these new platforms featuring INN member content, members are exposed to thousands of new readers who can be converted into regular readers and, hopefully, sustainers with time and attention,” said Jonathan Kealing, chief network officer for INN. “A few platforms, in particular Patch, pay all members for the page views they generate on their platforms. Others, like SmartNews and News Break, are paying an increasing number of members based on a share of the revenue they generate, helping to augment other, primary revenue streams.”

There’s limitless potential for more collaborations (including with other local for-profit newsrooms), and perhaps in collaborative fundraising.

“Collaborative fundraising could be key,” said Outlier Media’s Fortman. “You will see more of that in 2021, especially from organizations led by people of color who need to find funding outside of [typical] foundations and donors-who need to attract major funders, but can’t do it alone.”

More Support Coming in 2021?

As nonprofit local news grows in stature it has an opportunity to gain on a front that has eluded public media in the past: funding from states and the federal government. While the U.S. government, especially on the Republican side, has been quick to cut public media funding in the past, there’s a growing movement of potential policy ideas that would support local news in its time of need.

For now, though, the burden is still on foundations and charitable individuals. “The reality is that across the globe most democratic nations have a robust noncommercial public interest media landscape, mostly publicly funded,” said Stearns of Democracy Fund. “In the U.S. we have far less public funding but we have a much more robust nonprofit and philanthropic sector. As the traditional business model that has supported local news erodes it’s critical for philanthropy to help preserve and reinvent journalism as a public good.”

Interested in supporting the work of local nonprofit newsrooms? Find out how your donations can be doubled at the NewsMatch website, and keep an eye out for your local nonprofit newsroom’s fundraising campaign, running through the end of the month.

Mark Glaser is a consultant and advisor with a focus on supporting local and independent news in America. He was the founder and executive director of MediaShift.org, and is an associate at Dot Connector Studio, and innovation consultant at the New Mexico Local News Fund.