How Local News Can Survive and Thrive During the Pandemic
By: Mark Glaser
Tags: Covid 19, Knight Local, Business Models, Local News, Fundraising

Publishers focus on sustainability in challenging times, as they push for more fundraising, memberships, grants and government support

In the best of times, local news publishers were challenged to shift their business models due to digital disruption and the growing online ad dominance of Google and Facebook. Now, in the worst of times during the COVID-19 pandemic, publishers must shift even harder to reach sustainability in the face of dwindling advertising revenues and an audience that is suffering economically even as they depend on vital, factual information more than ever.

So while local news has an essential role to play in the community, and people depend on such outlets for timely local updates on the spread of the coronavirus, those same publications are trying to stay afloat — with many suffering layoffs, furloughs or closure. They are seeing massive traffic spikes to their websites, and yet they are unable to properly monetize that traffic to reach sustainability.

Business as usual will not work. As I wrote in the innocent days last January:

“Predictions are a tricky business, but there is one sure thing for 2020: local news publishers cannot depend on the old ways of doing business. The time for chain newspapers wielding a monopoly in communities is ending, and more independent and nonprofit news organizations are taking root around the country and making sure that watchdog journalism continues to thrive.”

That move is accelerating now because of the coronavirus crisis, and nimble public service journalism outlets are taking a multi-pronged approach to survive. They are making direct appeals to their audience, reminding them of the essential service they provide, while asking for donations or running crowdfunding campaigns. They are asking people in the community to step up and become members or buy subscriptions. They are asking advertisers to sponsor the removal of paywalls for COVID-19 coverage. And they are seeking out various national and local grant programs (thanks Google and Facebook for giving back!), as well as Small Business Association and other government loans.

Here’s a look at some of the ways local news publishers are stabilizing their business in the face of an historic downturn.

1. Direct fundraising from the audience

Public media outlets probably have the most experience in fundraising from their audience with regular pledge drives. (And check out how WBUR pulled in $1 million recently in 13 hours!) Nonprofit media has taken up the mantle and has had similar fundraising drives, typically at the end of the year with the help of NewsMatch.org, which can double or triple donations.

But what about for-profit news outlets? Their revenues typically come from advertising, whether in print, on-air or online, and they are not always comfortable asking for money from their audience — nor can they easily accept tax-deductible donations.

That’s where the Local Media Association (LMA) stepped in, creating the COVID-19 Local News Fund, which helps for-profit independent news organizations run fundraising campaigns from their audience. Donations go through the 501(c)3 Local Media Foundation, so they can be tax deductible, and the LMA provides marketing and promotional support for participating newsrooms — which don’t have to be LMA members.

According to Jed Williams, chief strategy officer at the LMA, nearly 200 local media outlets signed up for the program, with 137 running active campaigns that have generated more than $500,000 in donations to support COVID-19 coverage from 6,000+ donors. Some success stories include The Day of New London, Conn., raising more than $50,000 and the Anchorage Daily News topping $39,000. The only downsides are that LMA takes a 7% fee for the service, plus there are fees from the Givebutter platform (that can be paid by the donor), and LMA does not share donor contact information with publishers.

“The energy around the program from its earliest days (and it’s still early) has been terrific,” Williams told me. “The hurdle for some has been their general unfamiliarity with, and in some cases reluctance, to ask their communities for financial support. For for-profits especially, these are uncharted waters, and while reader revenue in the form of subscriptions may be a leg of their business model, contributions are not.”

2. New forms of premium content

Meanwhile, publishers have been creative with ways to raise money. And Chicago Reader has been one of the most creative, publishing a limited edition coloring book with work from 50 local artists, in 4 days of production! The money is split between the Reader and the artists, and the book costs $45 for print and $30 for PDF version. Chicago Reader publisher Tracy Baim says the coloring book has brought in more than $40,000 so far, and that “about a dozen” other alt-weeklies are doing their own coloring books.

The Reader has done even more, with a limited-edition puzzle of one of its Reader “stay-at-home issue” covers; 4/20 cannabis activities, recipes and a coloring book going on sale, with a portion of revenues going to the Chicago Coalition for the Homeless. They also created a cookbook with local chefs and bartenders providing recipes, with a portion of revenues going to an independent group raising money for people in the service industry. Baim’s goal is not to furlough, lay off or cut wages for any staff (so far, so good).

“Every single person on our team, 28 people, are part of our success,” Baim said. “Each one of them has a stake in saving their own job, and their colleagues’ jobs. They are all really pulling together to promote all these crazy projects, and raise the funds to keep going. I can’t say what the future holds, but we are going to try our very hardest to come out of this with the same team.”

Crowdfunding platforms also provide a way for publishers to seek direct audience funding, though these campaigns typically take some time to plan and execute. One current campaign on Kickstarter is from PostIndustrial, which is aiming to tell more stories of how people in the Rust Belt and Appalachia are dealing with the COVID-19 pandemic. The output will include podcasts, reported stories, one or more short documentaries and a digital version of the PostIndustrial magazine.

“At this moment when people need local news literally more than ever, designing a project that brings your audience into the work you do will help cement the bond between your outlet and your readers,” said Oriana Leckert, senior journalism outreach lead for Kickstarter. “This could mean funding a newsletter specifically for COVID-19 coverage, or launching an online discussion series where backers get to have input on the topics, or promoting your designers’ work by including kids’ activity pages they create as campaign rewards.”

3. Increased outreach for memberships or subscriptions

Alongside the one-time fundraising campaigns, there has been a big push by publishers to bring in more memberships and subscriptions that are typically recurring monthly or annual revenues. Just as readers are realizing how important timely local information is, they are primed for a pitch to become loyal members of trusted news outlets in their communities.

Berkeleyside has had a very direct, very sustained push for members, and their appeal is simple. In an email pitch, managing editor Tracey Taylor writes, “Our primary job at Berkeleyside is to keep you informed about what’s happening in your community. When everyone’s health is on the line, our mission has an added weight…We are glad to be able to provide this critical service, but we can’t do it without your support.”

These appeals have been going out every weekend since March 14, sent to non-donors encouraging them to become paying members, and asking members to contribute something extra. Within a month, Berkeleyside had raised more than $60,000 from those weekend emails, and membership has grown from 2,817 to 3,630. Plus, “we’ve been doing highly targeted major gifts work with a core of our supporters and raised $86,000 in the last four weeks,” according to Lance Knobel, co-founder at Berkeleyside.

The News Revenue Hub has provided timely support for publishers who want to increase reader revenues. In March, they quickly posted a slide deck to provide case studies and best practices for running campaigns to take advantage of spikes in traffic and sign up new members or even newsletter subscribers. One of those key takeaways: “Fundraising during a crisis must be done tastefully.”

The Hub pointed to sample appeals from Berkeleyside, CT Mirror, Honolulu Civil Beat and Rivard Report. In each case, the publications were being open about the challenges they faced and the vital help they need now. The Hub also posted a “Coronavirus Campaign Toolkit” to help publishers with sample template copy for appeals.

“While some of our members have successfully been able to fundraise from readers, this is something we recommend an organization do if their coverage has been strong and meaningful during this time,” said Christina Shih, vice president of business development for News Revenue Hub. “It’s important for newsrooms to lead with transparency to any stakeholder, whether it’s a member, major donor or foundation.”

(For more great membership tips, check out this overview from Membership Puzzle Project, and this roundup from the Public Media Merger Project.)

4. Sponsored access, content and online events

We know that advertising revenues are dropping off a cliff. That has hit everyone from small local publications to larger broadcasters to the giants of digital advertising such as Facebook and Google. But publishers have been thinking about ways to keep advertisers on board by changing their offerings to include sponsored access to content behind paywalls, sponsored video series and even virtual events to replace in-person events.

“The advertising waters are very choppy, there’s no escaping that,” said LMA’s Jed Williams. “But there are interesting success stories popping up. Some publishers have found large local businesses willing to sponsor or underwrite their COVID-19 coverage, including special sections and pop-up newsletters. Others are landing sponsors for business directories and other community services, some working through local chambers of commerce and economic development offices to do so.”

In the underwriting category, the National Post in Canada opened up its paywall for all readers in April thanks to sponsor Mary Brown’s Chicken. And the Southeast Missourian newspaper has its coronavirus coverage open to all thanks to a sponsorship from local health care companies. These sponsorships help in two ways, giving publishers the resources they need to do deep coverage and help promote local businesses that provide essential services.

Sponsored content was already a growing trend for local publishers, so it’s not hard to see how some of these series could shift to look at how companies are helping out during the pandemic. FWD>DFW Live from the Dallas Morning News is a Facebook video series that focuses on “cause marketing,” which fits well for COVID-19 coverage, with support from local companies and nonprofits. A recent edition covered how the United Way and YMCA were coming together to support the community.

The Portland Press Herald newspaper in Maine had been running a successful “Like a Boss” live breakfast event series with Q&As with local CEOs. They quickly pivoted those to Zoom webinars, while retaining their roster of sponsors, with a recent Q&A with the president of a local food bank. Similarly, Billy Penn in Philadelphia moved its live trivia quiz nights online, with discounts offered for local restaurants.

Other publishers have been aided by the upswing in political ads in the 2020 campaign cycle. Carson Now, in Carson City, Nev., was able to replace nearly all lost advertising due to the shutdown with political ads from local candidates. “With the virus making in-person campaigning impossible, we are one of the few ways they can reach voters,” said Kirk Caraway, publisher of Carson Now. “We are on track to have a better month of April than last year.”

5. Tapping into a growing number of grants

Nonprofit news has long been accustomed to raising money with grants from local and national foundations, but it’s not in the DNA of most for-profit news outlets. That was already starting to change over the past few years, as for-profits started getting grants directly or through fiscal sponsorships. Now, with the COVID-19 crisis, funders are putting even more resources into helping out local news publishers under duress.

Here’s a look at some of the grant programs supporting local news, with most open to for-profit publishers:

The Facebook Journalism Project is offering $25,000 to $100,000 to local news publishers in the U.S. who are covering COVID-19.

The Google News Initiative launched the Journalism Emergency Relief Fund to support local newsrooms (with 2 to 100 employees) around the world. Grants will be from “low thousands to low tens of thousands.”

The Racial Equity in Journalism Fund awarded $2.3 million to 16 newsrooms serving communities of color around the country, including Atlanta Voice, Sahan Journal and Qcitymetro.

Colorado Media Project created the COVID-19 Informed Communities Fund to give grants up to $5,000 each to ethnic, non-English-language, rural media and trusted community organizations to make sure underserved communities receive accurate and timely information about the coronavirus.

The Philadelphia COVID-19 Community Information Fund, supported by the Lenfest Institute, Knight Foundation and Independence Public Media, provides $2.5 million in grants to local news outlets in the Philadelphia area, and has already awarded $1.75 million to Resolve Philly, WHYY, Philadelphia Inquirer and WURD Radio.

The Robert R. McCormick Foundation and other Chicago-area foundations created the Chicago COVID-19 Journalism Fund, with grants up to $10,000 to support nonprofit and for-profit local media organizations.

The New Mexico Local News Fund is giving Emergency COVID-19 Grants at $750 each directly to journalists to help support “assistance with child care, elder care, purchasing equipment needed to work remotely, food, rent, or other unanticipated costs imposed by the pandemic.”

The Lenfest Institute has a great resource page on grant opportunities for covering COVID-19 so keep your eye on that page as it’s updated. Another good idea is keeping up with local and family foundations who are shifting resources to support small companies and nonprofits in their communities. Even the U.S. Chamber of Commerce has a foundation giving $5,000 grants to small businesses in “Distressed Communities.”

Also, the annual day of giving to nonprofits called Giving Tuesday, which takes place the Tuesday after Thanksgiving, is adding a new #GivingTuesdayNow campaign on May 5 to support nonprofits and communities hit hard by COVID-19. A collaborative effort by Knight Foundation, Poynter Institute, Institute of Nonprofit News, Democracy Fund, News Revenue Hub and others will promote a parallel #GivingNewsday to promote donations to nonprofit news organizations covering COVID-19.

6. Government loan programs and subsidies

And for those with the stamina and fortitude to figure out government programs and cut through the bureaucracy, there is the massive Paycheck Protection Program (PPP) for small businesses around the U.S. that was part of the massive CARES Act stimulus. The goal of the program is to give loans to small businesses that would be forgiven if the businesses keep everyone on their payroll for 8 weeks. However, the rollout of the program was glitchy, and it ran out of money after a couple weeks. Congress is currently stalled on adding money to the program.

Just how complicated is the PPP? There has been a running thread on the Verticals Collective email list about the program, and publishers were frustrated by the system of applying through their banks. Eventually, some of the publishers did receive approval, but they were likely the exception to the rule. Hopefully, more funds will flow into the program to help support more publishers.

Knight Foundation has created a helpful resource page for navigating the CARES Act, including a webinar on the CARES Act and one specifically targeted to the Paycheck Protection Program.

Meanwhile, there are many other loan and subsidy programs at the national, state and local level. The Small Business Administration had another Economic Injury Disaster Loan program for up to $10,000, but that too has run out of funding.

Will the government create a program specifically to support local news organizations? There has been a clamor for more support, with New Jersey and New York City leading the way with funds for local news. The New York City approach is worth watching, as it directs the city to put advertising funds into a wider array of local news outlets, including ethnic media.

That approach was emulated recently when the Canadian government announced a $30 million COVID-19 awareness campaign, with many ads being placed in local media. “If Colorado’s state agencies and municipal governments committed to spending their COVID-19 public information dollars on advertising in local news outlets, the double-benefit could be huge,” wrote Melissa Davis, interim director of the Colorado Media Project.

The News Media Alliance, National Association of Broadcasters and other groups joined together to ask Congress to help support local news outlets during the coronavirus crisis, and some Democratic senators have taken up the cause. “We absolutely have to do more to create the ability of local news to survive, and I think you’re seeing the consequences of it in a global pandemic,” Rep. David Cicilline (D-RI) told the HuffPost.

Taking a Multi-Pronged Approach

Just like there is no silver bullet that will save the business model of local news, there is no silver bullet that will get publishers through the pandemic. Government subsidies can help. Grants are great. New sponsorship opportunities are fantastic. Increased memberships and subscriptions are amazing long-term trends. Fundraising and crowdfunding campaigns are a great boost. The reality is that publishers will have to consider and explore all of them to survive.

The most heartening thing about this crisis is the rallying of support for local news, from foundations and funders; from various associations such as the Local Media Association, Institute for Nonprofit News (INN) and Local Independent Online Publishers (LION); and from viewers and readers like you. If the local audience and local businesses continue to value the vital, essential stories that local news outlets publish, then they will be partners in making sure they remain viable businesses into the future.

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.