How Philanthropy Became a Growing Revenue Stream for Local News
Research shows grants and donations are on the rise for nonprofit and for-profit news outlets around the country
The growth of nonprofit news outlets in America means that more foundations, philanthropists and donors are supporting local news than in the past. And the push by the Local Media Association (LMA) and Report for America (RFA) to get for-profit newsrooms to begin fundraising campaigns means that donors are even giving to these commercial enterprises in growing numbers. With some recent research reports from the Institute for Nonprofit News (INN), Media Impact Funders (MIF), LMA and RFA, the trend is now clear: philanthropy is a growing and stable source for funding for local news.
Of course that doesn’t mean that grants and donations will “save” the challenging business model of so many news organizations. It’s just another piece of the puzzle for publishers that have lost revenues from advertising due to the rise of digital ad giants Facebook, Google and recently Amazon. And philanthropy takes many shapes, with grants from national foundations and local place-based foundations coming in alongside donations from high net-worth individuals and average folks in communities.
“We are very optimistic about the future of philanthropy and local news,” said Sarabeth Berman, CEO of the American Journalism Project, a venture philanthropist supporting 22 civic news organizations. “We are seeing more and more philanthropists – especially local philanthropy – stepping off the sidelines to build a future for local news. The rapid decline of commercial local reporting in our country combined with an unprecedented year that magnified the essential role local news plays in our day-to-day lives is driving more philanthropists to rise to the moment and ensure the public has the information they need.”
That essential role was clear in the past year during the COVID-19 pandemic, and led to a majority of INN member newsrooms seeing an increase in small-donor giving. According to the recent INN Index report, “new unique campaigns around COVID brought in first-time contributions…[and] INN’s work in the field shows that sending targeted calls-to-action over email and enabling audiences to donate quickly and easily on a homepage and within story pages are highly effective tactics.”
Here’s a deeper look at the trends around philanthropic giving to local news, at nonprofit and for-profit news outlets, with some insight from key people at community foundations and a major donor.
Nonprofits Lead the Way with NewsMatch Growth
Not surprisingly, nonprofit newsrooms are leaders in developing philanthropic giving, as that’s part of their DNA. And over the past few years, local nonprofit publishers are launching around the nation. Emily Roseman, research director & editor at INN, dug deeper into the numbers for me, finding that:
- The local sector of nonprofit news is growing rapidly, with an average of nearly one launch per month for each of the past three years.
- The number of local organizations has nearly doubled since 2016, and the newcomers often operate on much smaller budgets than their predecessors.
- Local news was once a small segment of nonprofit news. One in six outlets was local prior to 2008. Growth accelerated in 2018 as gaps in local news coverage widened.
- A total of 33 local outlets launched in 2018-2020, including 11 during the COVID crisis in 2020. Local nonprofit outlets now operate in 29 states.
And the force multiplier for local news fundraising has been the annual NewsMatch campaign that harnesses national and local foundations to match local donations in an end-of-year fundraising campaign. Knight Foundation, Democracy Fund and INN have been instrumental in leading the program.
Last year, NewsMatch helped hundreds of newsrooms raise a total of $47 million, with $5.1 million in matching funds from 17 national and regional funders. Newsrooms brought in nearly $3.1 million in additional local matches, with almost 20% of that coming from family or local foundations, allowing them to get double matches for donations from the community.
Alongside the money matches, NewsMatch has also helped raise awareness about the crisis in local news and keeping an eye on local governments, making sure people know how important it is to contribute to these news outlets. And NewsMatch also provides fundraising best practices to newer publishers, helping them build infrastructure to run campaigns throughout the year.
Local match dollars more than doubled last year for NewsMatch
“Collective fundraising campaigns such as NewsMatch leverage relatively modest amounts of national funding to catalyze broad new community support for news,” said Sue Cross, executive director and CEO of INN. “NewsMatch 2020 generated nearly as much in local match funds as national, and many times more in individual donations.”
Local funding for news has also come from an influx of grants from community foundations, according to a research report from Media Impact Funders. In 2009, community foundations gave just $2.6 million to journalism, news and information. According to MIF, that rose to a cumulative $124 million given since 2009. While that’s a growing number, it is still dwarfed by the $1.1 billion given to all types of media projects from community foundations.
“This is the first comprehensive report we’ve produced looking at community foundation funding for media and journalism,” said Nina Sachdev, former communications director at MIF who now leads communications for the Rita Allen Foundation. “More specifically, it offers the clearest picture yet of how much community foundation support is being directed toward ‘journalism, news and information.’ We envisioned using this report as a tool to spark meaningful dialogue among funders about their grantmaking.”
Top community foundations giving to journalism, news and information since 2009, according to Media Impact Funders
Sachdev told me that MIF is creating a cohort of community foundation colleagues to help them share best practices related to supporting journalism and learn from each other. (If you are interested in joining this community, contact MIF at [email protected])
“From an impact standpoint, foundations that care about amplifying their message and maximizing their investments should look to support local news,” she said. “However, messaging will look different depending on the funder. It can’t be a one-size-fits-all approach to getting foundations engaged in supporting local news. Think about how varied the efforts were to combat vaccine hesitancy among different communities in the U.S. Funders need to see how journalism can help find solutions for communities.”
More Community Foundations Support Collaboratives
The dark orange circles show where collaborative efforts are thriving
Community and family foundations are often the heartbeat of philanthropy in many towns and cities. They support nonprofits, run donor-advised funds for wealthy individuals and understand the needs of communities. When those needs of the community (access to health care, better education, affordable housing) intersect with editorial efforts from newsrooms to find solutions, it can be a fruitful combination. And it goes even further if the newsrooms band together to create collaboratives.
(For a view of some top collaboratives in the country, check out the updated Civic Bright Spots Map from Knight Foundation and click on the dark orange circles.)
And community and family foundations have been making a splash recently in supporting cooperation between local news outlets. The Wichita Community Foundation committed $1.1 million to support the launch of the nonprofit Wichita Beacon this year, which will be an adjunct to the Kansas City Beacon. (You can read more about WCF’s support for a Wichita collaborative in a previous story I wrote.) And the Walton Family Foundation, run by the offspring of the founder of Walmart, made noise with a $1.4 million grant to the University of Missouri to launch a new collaborative covering environmental issues in the Mississippi River Basin.
In the works are a couple of new collaboratives in Southwestern Michigan and Delaware. Both are being shepherded by the Solutions Journalism Network (SJN) and its Local Media Project, which has a multi-year grant from Knight Foundation to foster collaboratives with a solutions focus. The Kalamazoo Community Foundation has taken the lead with the Southwest Michigan Journalism Collaborative, with 10 different news and information organizations taking part, according to Sarah Lee, director of marketing communications for the Foundation.
“We are funding it because we believe in supporting local news, which helps inform the community about what’s important to the community…and it helps people in Kalamazoo engage in what matters most here,” said Lee.
Lee told me that there’s only one daily newspaper, the Kalamazoo Gazette, with a hollowed-out editorial staff, and there’s a lot of mistrust between media and people of color and how they are represented in news coverage. The aim of the collaborative is to build more trust, and it includes Western Michigan University and the Spanish-language newspaper Nueva Opinion.
“It’s a different way of shoring up local talent and fostering a sense of camaraderie in the industry,” Lee said. “I’m glad that the people in the collaborative are engaging their leadership on this. Our Foundation values diversity, equity and inclusion and antiracism, and hearing lived experiences of folks is a game changer for these newsrooms. They wouldn’t have context like that [without the collaborative].”
In Delaware, the pandemic was a catalyst to begin the work of local news collaboration. Allison Taylor Levine, vice president for marketing and communications at the Delaware Community Foundation (and a former journalist), helped launch a new Journalism Internship Program this summer, using COVID-19 relief funds. Levine said the Foundation was just awarded an $80,000 grant from the Independence Public Media Foundation to help expand the internship in summer 2022, and also support the statewide assessment of local news and information.
“The idea was to hire BIPOC interns to cover the pandemic’s effect on communities of color in southern Delaware, which is a light news area, not quite a news desert,” Levine told me. “It was a stepping stone to get local funders to talk about local journalism and the potential that philanthropy has to move civic engagement by supporting local journalism… My underlying plan was to get news organizations to collaborate and think differently about how they serve the community.”
The success of the internship led Levine to launch a new local news collaborative, doing the work on her own time. A recent meeting of the collaborative included 25 people representing about 20 media outlets, including the statewide Gannett newspaper, and the two major public media organizations, Levine said. Levine’s work to strengthen local journalism has funding from the community foundation as well as the Welfare Foundation, United Way of Delaware, Discover Bank, M&T Bank and Delaware Humanities. It won’t be long before it’s an official project of SJN’s Local News Project.
Helping For-Profit Newsrooms Find Donors
While these collaboratives include for-profit newsrooms, who do receive a boost from participating, more publishers are making direct pitches for donations and grants, thanks to the support of two key organizations: the Local Media Association and Report for America. The LMA ran a Lab for Journalism Funding starting last September, with support from Google News Initiative, helping 16 local publishers raise $4.5 million to support their work. Frank Mungeam, chief innovation officer for the LMA, told me that publishers raised money equally from four categories: national funders; local community foundations; major donors; and small donors or crowdfunding campaigns.
“We found that the best path to funding was shaped by the publisher’s legacy in its community, and the nature of the project they sought to fund,” Mungeam said. “When a publisher had a strong history of community service, and a project that responded to a recognized community need, they had success locally with both large individual donors and crowdfunded campaigns.”
One notable campaign was in New Orleans, where the Times-Picayune and Advocate newspapers partnered with a local community foundation to start the Louisiana Investigative Journalism Fund, with $1 million from Ford Foundation and other donations from local philanthropists.
One of those philanthropists was Richard Zuschlag, CEO of Acadian Companies, who donated $25,000 per year for three years. Zuschlag told me he delivered newspapers growing up and also did radio news in college. Why was this his first donation to a local news outlet? He was never asked. In this case, he understands just how important investigative journalism is in his community.
“I don’t believe that there is enough time or money spent on investigating corruption in
local government,” Zuschlag told me. “If we want to make sure our local and
state elected officials and our judicial system are all operating properly, we have to have
investigative journalism to uncover corruption in an independent way.”
Meanwhile, Report for America places reporters in newsrooms who must fundraise to cover a quarter of the journalist’s pay. As RFA has grown, so has the fundraising it supports around the country. In its “Local Sustainability Annual Report” for 2020, RFA found good news all over:
- Newsrooms raised $23,500 on average per reporter, up from $14,593 in 2019.
- The number of donations per newsroom rose from 634 to 8,887.
- Report for America had a philanthropic impact of $10 million last year – combining national and local funding.
- Community foundations have become more active, with 56 contributing to newsrooms in 2020 vs. 25 in 2019.
Those numbers should go up substantially in 2021, since 300+ corps members were placed in 200+ newsrooms around the country. That means more fundraising campaigns in more places, bringing more philanthropists and foundations into the mix.
In the end, whether it’s a for-profit newspaper or nonprofit online news outlet, local news publishers need more community members, major donors and community foundations to step up and continue this growing trend of philanthropic support.
“We must move with urgency to restore, reinvent and expand public service journalism, the lifeblood of our communities,” said INN’s Sue Cross in this year’s INN Index. “From the crises of 2020, we can take momentum to move further and faster in expanding the news that sustains our civic life and promotes the public good.”
For funders who are interested in supporting local news, the annual NewsMatch campaign is a great place to start, letting you search for nonprofit news outlets in your community. Funders can offer matching grants related to topic areas to help those news organizations get triple matches for each local donation to their campaign.
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.
Photo (top) by Edward Howell on Unsplash
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