Revenue among the cohort varied considerably, although philanthropic funding continued to comprise a significant portion of the income stream across the group. However, the organizations were experimenting with a wide range of other revenue streams—from seeking donations from individuals and collecting membership dues to earned income, such as selling advertising, charging for special events and seeking sponsorships.
Revenue Growth Between 2011 and 2013, average revenue among the 20 sites grew considerably. Revenue grew by an average of 73 percent between 2011 and 2013 and 30 percent since 2012 with the average site earning around $873,000 in 2013.
The sharp increases in average revenue in 2013 were largely driven by a few leading sites such as The Texas Tribune, whose revenue increased by nearly $3 million. Median revenue grew by a more modest 7 percent in 2013.
Between 2011 and 2013, 75 percent of sites increased total revenue. Three sites experienced revenue growth of greater than 100 percent: Oakland Local (601 percent), The Lens (333 percent) and VT Digger (198 percent).
However, five sites——Charlottesville Tomorrow, City Limits, New Haven Independent, The Rapidian and WyoFile—experienced no growth or a decline in revenue between 2011 and 2013.
Sites with a state or regional focus earned nearly twice as much revenue on average in 2013 as sites with a local focus. The revenue of the average state or regional site increased by 55 percent in 2013 compared with 2011, far outpacing the average revenue growth of 12 percent among local sites over that period.
Spotlight
Developing Business
Strategies
Nonprofit news sites that report having specific financial goals grew revenue at a far higher rate than those without financial goals. Revenue growth was also higher among the organizations that had a business or strategic plan.
The specificity and timeframe of financial goals reported by sites varied, but as a whole this type of mindful planning has been associated with sites exhibiting the most growth.
Wyofile is an example of a smaller organization that has been very intentional in its business planning, using a three-pronged approach: a five-year strategic plan dictates overarching goals for the organization, annual budgetary goals and a corresponding development plan. In this way, Wyofile maintains its focus on its longer-term goals, while creating tactics to achieve those goals and metrics to measure progress toward them. Specific metrics in the development plan for 2014 included: 100 percent donor retention from 2013, re-engage 50 percent of all lapsed donors, recruit 75 new donors, host four fundraising house parties in 2014, and secure $300,000 from six foundations. The strategic plan has helped Wyofile hone its focus on the most promising revenue streams, and also has led to revelations about how to grow those revenue streams (e.g., the need to add expertise in underwriting; using a contract/commission-based compensation structure for this role).
Revenue Composition The nonprofit news organizations examined are still highly dependent on foundation and grant funding, which represented 58 percent of total revenue in 2013. Since 2011, foundation funding as a percentage of total revenue has decreased by 5 percentage points but even so, over half of sites get the majority of their revenue through foundation funding and 2 in 5 rely on foundations to supply 75 percent or more of their total revenue.
Earned income as defined as revenue from advertising, events, sponsorships, training and subscriptions constituted nearly a quarter of total revenue (23 percent) for the average site in 2013, up 5 percentage points since 2011. Though the increase is moderate, many sites are trending toward greater sustainability.
Earned income accounted for 40 percent or more of the total revenue generated by five sites in 2013: The Rapidian (75 percent), New England Center for Investigative Reporting (50 percent), New Haven Independent (46 percent), VT Digger (42 percent) and MinnPost (40 percent). However, about a third of the nonprofit news organizations generate less than 10 percent of total revenue through earned income.
Revenue composition varies based on the geographic focus on sites. Local sites derived more than a quarter (26 percent) of their 2013 revenue from donations and membership dues, double the share of total revenue that state and regional sites draw from these sources (13 percent). Meanwhile, the average local site counts on grant funding for just over half (52 percent) of its revenue compared with state and regional sites, which on average draw close to two-thirds (63 percent) of revenue from grants.
Local sites on average generate 9 percentage points more of their total revenue through earned income and receive 12 percentage points less from foundation funding than they did in 2011. The balance of funding has remained fairly constant for state and regional sites.
Older nonprofit news sites generate a greater share of revenue through donations and earned income and are less reliant on foundation funding. Organizations operating for more than seven years as of 2013 relied on foundation funding for 41 percent of their total revenue, while organizations in existence for less than five years counted on foundation funding for 75 percent of their total revenue.
Foundation & Grant Funding Total foundation finding averaged $424,030 in 2013 and median for the cohort was $268,272. Many sites acknowledged the difficulties in retaining funding support from national foundations over a long period of time; in fact foundation and grant support shrunk in 2013 relative to 2012 for 50 percent of the sites in this study. News sites noted that the ability to raise money to cover general operating funds becomes more difficult as they mature, and they sense that foundations do not want to become a line item in the budget that is expected to return year after year.
State and regional organizations were better able to capture foundation funding and had much higher levels of growth in this revenue source in 2013 than local organizations. State and regional organizations grew foundation funding on average by 98 percent in 2013, while local organizations reported an average decline of 8 percent.
Only a handful of organizations demonstrated little dependence on grant funding as a share of their overall revenue. The Rapidian received no foundation funding in 2013. At Charlottesville Tomorrow and MinnPost, foundation funding accounted for about 15 percent of their overall revenue.
Donations & Membership Dues Individual donations and membership dues was the fastest-growing source of revenue for several organizations. Two-thirds of sites increased donations in 2013 and median revenue from donations nearly doubled from $33,000 in 2012 to $60,000 in 2013.
State and regional organizations earned more on average through donations than local sites but local organizations have seen the biggest gains in the average number of donors per year. Local sites reported a median donation of $104,000 in 2013 and state and regional sites earned $29,836. During the same period, seven of the 10 local sites received more than $70,000; by comparison only 4 in 10 state and regional sites eclipsed $70,000 with The Texas Tribune and MinnPost being the biggest earners of donation revenue, generating $1,485,354 and $709,745.
Organizations demonstrating strong donation revenue in 2013 and growth since 2011 include The Lens ($135,000 in donations, 634 percent growth), City Limits ($20,000, 721 percent), Voice of San Diego ($741,000, 27 percent) and VT Digger ($106,000, 133 percent).
For all sites, the average number of donors has increased from 498 in 2011 to 757 in 2013. This increase is mainly driven by donations of less than $1,000, which accounted for 97 percent of all donations in 2013.
Spotlight
Building Donor Support
Nonprofit news organizations have increasingly focused on building their donor base and donor repeat giving, which they view as a more predictable funding source over time than foundation grants.
Though many sites do not differentiate between “donors” and “members” since both are individual supporters, several sites have sought to create a distinction and promote the value of becoming a member. Exclusive access to content and events are among the benefits that sites have conferred to members.
MinnPost has piloted an innovative approach to monetizing membership by crowdfunding beats related to the environment and mental health/addiction. Donors for these beats commit to three years of funding ranging from $1,000 to $5,000 per year and receive recognition of their contribution on the MinnPost website. MinnPost raised $709,745 through 2,094 donors in 2013, a 6 percent increase since 2011. With support from Knight’s Local Media Initiative, the organization is experimenting with attracting small donors to support its reporting by encouraging larger donors to offer matching funds.
Earned Income Of the 20 news organizations included in this study, all but three reported at least one source of earned income among the following categories in 2013:
Among the six areas of earned revenue reported in this study, sponsorship, advertising and syndication were the most common forms of earned income. Half or more of the organizations reported revenue from each of these sources.
Corporate sponsorships made up the largest share of total earned revenue and many sites had success in increasing sponsorship revenue. Ten sites earned revenue from corporate sponsorships in 2013, raising an average of $286,843, 60 percent higher than 2011.
Most news sites received sponsorship dollars to support either events or specific content. Several sites helped drive growth in sponsorship revenue by hiring new staff focused on building corporate sponsors and developing new services that lent themselves to sponsorship opportunities.
Spotlight
Attracting Sponsors
NJ Spotlight has attracted sponsors to support a webinar series launched in 2013 to inform its readers about public policy and other current topics. The organization maintains a list of webinar topics to bring to prospective sponsors, and interest from sponsors drives which topics it selects to pursue. For example, AARP sponsored a webinar that covered a study of long-term care in New Jersey and the use of big data in health care. After starting with two webinars in 2013, NJ Spotlight now hosts monthly webinars, with recent participation as high as 200. Webinars have helped the site increase its sponsorship revenue by 50 percent in 2013 to $141,000.
Events were among the sources of revenue that had gains, with median growth reported at 27 percent since 2011. Events were also one of the few revenue sources that sites have experimented with in recent years, with six organizations adding events to their programing since 2011.
Some sites use events as a key component of their revenue strategies, while others treat events primarily as a vehicle for engaging with their readership and members of the community. Overall, news organizations in the study staged a total of 228 events attended by more than 30,000 people with the average site earning $49,604 in event based revenue in 2013.
While advertising is the most common source of earned revenue, median growth of advertising revenue was only 2 percent from 2011 to 2013. Several organizations and thought leaders interviewed believe traditional advertising will be a declining revenue source for the nonprofit news industry as sites struggle to compete with the volume of traffic offered to advertisers by larger, for-profit news organizations.
Spotlight
Piloting Native Advertising
With circulation numbers that could not compete with the for-profit city paper, the Voice of San Diego concluded that traditional advertising was not the right fit for the site. However, the leadership felt confident that the site could win on influence and engagement, since it has a reputation for appealing to an audience that is highly engaged and motivated to improve the city of San Diego. Voice of San Diego capitalized on this by launching Partner Voices, a new section dedicated to telling the stories of nonprofits. The site’s version of native ads or advertorials, these messages on local nonprofits are written by freelancers and paid for either by the nonprofits or by corporate sponsors on their behalf. Partner Voices is housed in its own section of the website so that there’s a clear line between it and Voice of San Diego’s core editorial content.
The Voice of San Diego ended 2014 with $127,000 in revenue from community partners, the majority of which comes from the Partner Voices program. Nonprofits that sign up for a full year pay $10,000 for one promo per month, or they can pay $1,000 to $1,500 for individual promos. Corporate sponsors pay slightly more, since they get a short write-up on the site as well as the nonprofit they sponsor. In addition to the promos on the site, nonprofits buying into Partner Voices receive other benefits, including access to quarterly workshops for nonprofits to share best practices on everything from fundraising to marketing and social media strategies. In essence, through Partner Voices, the Voice of San Diego has built an entire network of supporters.
Events were among the sources of revenue that had gains, with median growth reported at 27 percent since 2011. Events were also one of the few revenue sources that sites have experimented with in recent years, with six organizations adding events to their programing since 2011.
Some sites use events as a key component of their revenue strategies, while others treat events primarily as a vehicle for engaging with their readership and members of the community. Overall, news organizations in the study staged a total of 228 events attended by more than 30,000 people with the average site earning $49,604 in event based revenue in 2013.
Knight Foundation supports transformational ideas that promote quality journalism, advance media innovation, engage communities and foster the arts. We believe that democracy thrives when people and communities are informed and engaged.
© Copyright 2006 - 2015 The John S. and James L. Knight Foundation