Crossposted from the Council on Philanthropy’s blog.

With community and place-based foundations increasingly supporting local information projects – they spent $58 million on the sector last year  – the audience for the “Journalism and Media Grant Making” session at the Council on Foundations’ Fall Conference came prepared with sophisticated questions and their own insights to share.

Here’s a sample of the conversation:

How are nonprofit news sites becoming sustainable – particularly since there isn’t one magic business model?

The most successful have diversified revenues sources that include foundation grants, advertising, major donors, memberships and sponsorships, said Eric Newton, Knight Foundation’s senior adviser to the president. People will pay for content, Newton said, noting that the public has funded public media for more than half a century. But sites have to be entrepreneurial by nature.

The expense equation is important too. A budget solely devoted to good journalism is doomed to failure, said Michele McLellan, a Knight Foundation consultant who helps guide community foundations investing in this area. Funders need to take a close look at the site’s business development plan and technical capacity, both key to building and engaging audiences who will sustain the site.

Make sure the site has a balanced team of journalists, business people and technologists, McLellan said.

Another audience member asked about the relationships between funders and news organizations – both of whom have distinct DNA. Recently, for example, foundations have embedded nonprofit beat reporters at for-profit publications, to bring attention to issues important to them.

The media must maintain its independence, but how does that work in practice?

Communication is key, McLellan said. Clarify roles early. Don’t make assumptions. When you’re working out the details of the agreement, walk through ‘what if’ scenarios, to see how both sides expect to handle issues that arise.

One audience member, whose foundation supports a public radio and TV station, said it’s key to manage the expectations of other partners and funders in the project too – so that everyone is on the same page. The conversation should be ongoing also, with periodic check in calls to avoid misunderstandings.

For more tips on funding in news and information, download Knight and the William Penn Foundation’s publication,  “Journalism and Media Grant Making: Five Things You Need to Know, Five Ways to Get Started.”  Also, the Information Toolkit provides a way for communities to map their information sources and needs.

And to get more ideas, browse through the projects announced this week from the latest winners of the Knight Community Information Challenge, which offers matching funding to community and place-based foundations funding in this area. 

Marika Lynch is a communications consultant for the John S. and James L. Knight Foundation