Nonprofit news sites need to act more like digital businesses – Knight Foundation

Nonprofit news sites need to act more like digital businesses

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In the emerging landscape of non-profit news, good journalism is not enough. Even with generous foundation support, high-quality reporting alone will not create an organization that can sustain its ability to produce news in the public interest. 

Instead, successful news organizations – even the nonprofit ones  – have to act like digital businesses, making revenue experimentation, entrepreneurship and community engagement important pieces of the mix. Understanding how to create social and economic value and how to adapt and innovate are just as important as good content.

The new study we just completed, “Getting Local,” offers a detailed look at some of the country’s leading online local nonprofit news ventures, providing data on how they are generating revenue, engaging users and cultivating donors.

It also offers a useful way for foundations and others interested in supporting nonprofit news to think about and assess the sustainability of these types of emerging organizations.

While none of the sites profiled has developed a clear business model yet, some of the key ingredients needed for success are becoming increasingly apparent:

1. A business development strategy and capacity to execute it.

This means a news organization may start with foundation support. But from the outset, it devotes resources to experimentation with different sources of revenue. It operates with the expectation that foundation funding should be treated as equity rather than as an ongoing revenue stream; that philanthropic support will likely diminish over time and needs be supplemented with new sources, such as memberships, advertising, sponsorships, or events.

One example of this entrepreneurial journey is MinnPost, a five-year-old online news organization serving Minnesota. Launched in 2007 with foundation and donor support, MinnPost in 2010 drew more than one third of its $1.28 million in revenue from non-charitable sources, including corporate sponsorships, advertising and its MinnRoast annual fundraiser event.  (See MinnPost’s profile)

2. A high level of audience focus and innovative approaches to build community engagement.

A team of journalists creating a newspaper on the Web is not a sustainable proposition. In addition to business expertise, emerging news organizations need to embrace practices online and offline that include a sophisticated understanding of who they want to reach. They also need to experiment with ways to engage those communities in order to produce impact on civic life.

The Voice of  San Diego, for example, regularly analyzes data on the more than 6,500 subscribers to its Morning Report – a daily email with article excerpts and links to full content – to gain a deeper understanding of its audience. Earlier this year, the site launched a major community event – Politifest 2011, which included a mayoral debate and an “idea tournament” much like American Idol to surface the best ideas among residents for making their region better.  (See VOSD’s profile)

3. Technological capacity to support and track engagement.

A higher expectation of interactivity and a goal of strong engagement require technological capacity that sits outside the experience of many journalists.

The Texas Tribune, for example, has devoted significant resources to technology – developing innovative interactive features and highly searchable public databases, which have become a significant draw to the site and helped drive deeper audience engagement. Average time on the site was nearly 4 minutes for the Tribune in early 2011.  (See Texas Tribune’s profile).                               

There are many unknowns in the emerging field of non-profit news organizations. But it is clear that successful ventures will aspire well beyond producing high-quality journalistic content.  Entrepreneurial revenue development, audience focus and a mission of engagement, and technology to support that mission are essential components of a sustainable nonprofit news venture.

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