Non-Profit Newspapers

Part
01
of three
Part
01

Non-Profit Newspapers: Overview

News nonprofits have grown in the last 10 years as traditional newspapers are in decline. Currently, the majority of funding for news nonprofits comes from foundations. Print circulation for newspapers was down in 2018, while digital circulation, at least for the 50 largest newspapers in the United States, increased. Therefore, for the purposes of this research, the focus is on both digital and print newspapers.

Funding

  • The Institute for Nonprofit News (INN) was established in 2009 and has a mission to educate and support nonprofit media outlets. The Institute has 209 members, all of which are registered media non-profits who are committed to transparency.
  • The INN Index 2018 found that 90% of the funding for nonprofit news organizations comes from philanthropic sources, with about 50% coming from foundations and about 33% from individual donations, including dues.
  • Most of the news nonprofits surveyed indicated that they have partnerships with online outlets, public radio, and newspapers. The goal of these partnerships is to utilize the resources that are often available at larger outlets.
  • The INN survey also found that local news nonprofits, as opposed to news nonprofits overall, received 48% of funding from foundations, 39% from individual giving, 8% from ads, 3% from events, and the remaining 2% from other sources.
  • In June 2018, a working paper on the state of funding in the nonprofit news industry stated that "the great majority of news nonprofits remain highly dependent on foundation funding for their revenue, and even those few that have meaningfully diversified their revenue streams continue to receive substantial proportions of their financing from foundations."
  • Examples of foundations that fund news nonprofits are the Democracy Fund, Knight Foundation, and the MacArthur Foundation.

History

  • Although there were nonprofit news organizations prior to 1900, the majority of the growth in the industry has been in the last 10 years. The typical nonprofit news organization (based on INN members) is eight years old. This is believed to be at least partially a result of the decline of for-profit newspapers, as those companies lost advertising revenue.
  • From 2000 to 2014, print advertising revenue for newspapers declined from $67 billion to $20 billion. This resulted in a decline of coverage by newspapers and led to many news nonprofits launching to cover the gaps in coverage, particularly in the areas of investigative journalism, government, and politics.
  • Reporting indicates that while several of the nonprofits thrived, many of them struggled. One of the main reasons for this is lack of funding. Research shows that the largest media nonprofits take in most of the available donations, while the smaller outlets get very little.
  • An analysis of the donations received by 60 news nonprofits found that the three largest organizations took in about 40% of all donations. The 20 organizations that were least funded in the analysis, only received 2% of the donations.

Additional Insights

Part
02
of three
Part
02

Non-Profit Newspapers: Trends

Two trends in the local nonprofit newspaper industry are in funding and growth. There is increased funding, increased financial stability, and increased growth within the industry.

FUNDING- INCREASED FUNDING AND FINANCIAL STABILITY.

  • Foundations and individual philanthropists are donating to nonprofit newspapers more than ever.
  • Many nonprofit news organizations are developing membership programs to increase individual donations.
  • In 2018, a survey conducted by the Institute for Nonprofit News (INN) revealed that more than half of nonprofits had more than three or more sources of revenue and a third had four or more.
  • The results were encouraging with estimated revenues of $325 million to $350 million which is an indicator of financial stability.
  • Even though most nonprofit news organizations are young, they represent about $350 million in overall revenue growth.
  • The INN recorded that more than half of the non-profits surveyed including the local ones generated $500,000 or more in revenue in 2017 and a third made $1 million or more.
  • The Wisconsin Watch experienced double-digit increases in individual funding in 2018.
  • Local nonprofit outlets can reach their audience more directly and take in more individual donations.
  • They, therefore, have more varied revenue streams than non-local newspapers.
  • Leading local news nonprofits such as the Texas Tribune and ProPublica are now able to attract a lot of funding due to their well-established state.
  • In 2018, efforts to raise $1 billion funds for local nonprofit news growth was announced by a venture capitalist who backed the launch of the Texas Tribune.
  • There is higher growth from individual donors because readers are more willing to give donations than subscribe.
  • The Texas Tribune generated $9.1 million in revenue in 2018, up from $7.7 million in 2017.
  • Its projected revenue this year is $10.1 million of which $2 million is expected to come from major donors, about $2 million from corporate sponsors, and close to $2 million from events.

GROWTH SPURT DUE TO THE STRUGGLING TRADITIONAL MODEL

  • Local non-profit newspapers are cropping up all over the United States in reaction to the struggles that are faced by the old-fashioned local news sources.
  • The City launched in April 2019 as an independent, non-profit news outlet which is dedicated to precise reporting that serves the people of New York.
  • The Salt Lake Tribune of Salt Lake City is planning to become a nonprofit as a means of escaping its financial struggles.
  • More local news organization owners seek to convert their civic assets into community trusts, foundations, or nonprofits.
  • The Tribune is drawing guidance from other newspapers that are nonprofits such as The Philadelphia Inquirer and Florida’s Tampa Bay Times.
  • Major cutbacks in the for-profit newspapers are fueling the growth of nonprofit news outlets.
  • The existing for-profit media outlets are also integrating with the nonprofit model.
  • For example, the Guardian and The New York Times announced the establishment of nonprofit wings.

RESEARCH STRATEGY

We began our research by consulting general articles about the local nonprofit newspaper industry and limited our search to the articles published within the last two years. The search involved newsrooms, news agencies, and news media that are nonprofit and involved in the publication of newspapers, both online and printed. The trends identified were those which were present in multiple articles and applied to several local nonprofit newspapers. These trends were selected and listed in the findings, with additional explanation.
Part
03
of three
Part
03

Non-Profit Newspapers: Success Rate

With no available breakdown for the local nonprofit newspaper segment, we have provided an analysis of the success rate of the overall local nonprofit news sector in the United as a proxy with the assumption that the success/failure rates would be proportional across all subsegments. There are about 200 nonprofit news outlets in the United States, and about 23% or 46 are local news nonprofits. The success rate of nonprofit news outlets in the United States is 82%.

Success Rate

  • According to the Institute for Nonprofit News (INN) Index, about 23% or 46 of approximately 200 nonprofit news outlets are dedicated to providing local news in the United States.
  • INN CEO estimates that in the 4 years up to 2019, only about 10 of the 200 nonprofits news organizations have shut down.
  • The institute estimates that the failure rate for the approximately 200 nonprofit news outlets is less than 18%.
  • This means that about 18% (or 8) of the approximately 46 local nonprofit news outlets have failed in the United States in recent years. Putting this into perspective, with a success rate of about 82%, about 38 of the 46 local nonprofits news outlets have been successful in the United States.

Challenges

  • However, a 2018 Shorenstein Center survey points out that survival is not assured for local nonprofits news outlets because they depend on a "limited pool of funders" compared to nonprofits with a wider scope.
  • Additionally, the survey found that only about 5% of the total funding to nonprofit news outlets goes to local news nonprofits.
  • Furthermore, about 66% of the funding to local news nonprofits goes to 25 of the top organizations concentrated in 10 states, with the top-five scooping about 27%.

RESEARCH STRATEGY

Our research for the success rate of local nonprofit newspapers in the United began with scouring through the public domain for any insights into the subject. Our initial research produced information provided by several news resources that seemed to focus on surveys conducted by the Institute for Nonprofit News (INN) (the leading organization/association nonprofit organizations in the U.S.) and the Shorenstein Center (a Harvard University media/public policy analytics outfit). While these reports provided useful data on the state of the local news nonprofits, there was no information specific to local nonprofit newspapers.

Next, we scoured through the aforementioned resources in the hope that we would find a breakdown of the required information. Our strategy produced resources by the INN dubbed the INN 2018 Index which outlined the state of the overall local nonprofit news sector. From the Shorenstein Center, we found a report detailing the funding challenges experienced by local nonprofits. We also searched through various relevant resources such as the Council on Foundations but there was nothing on the subject. However, there was still no breakdown that could enable us to provide the required information.

Our third strategy was to explore journalism-focused media resources such as Niemlab, CJR, and Editor and Publisher. We also searched through overall media outlets such as Bloomberg and CNBC, statistics sites such as Statista, survey firms such as IPSOS, and research firms such as Mintel. However, there was no breakdown on the subject.

We have, therefore, provided an analysis of the success rate of the overall local nonprofit news sector in the United as a proxy with the assumption that the success/failure rates would be proportional across all subsegments. This is because local nonprofit newspapers would be among the segments considered in compiling the reports.
Sources
Sources

From Part 01
Quotes
  • "The organizations that comprise the network are diverse, with beats that range from the local to the global, often exploring the intersection of the two. Some cover specific industries and sectors, such as education or healthcare. Others cover communities, from small towns to big cities. The members utilize all media including, digital, print, radio, data and film. All of them are nonprofits and use investigative and public-interest reporting to advance their mission."
  • "The INN members do this work at a time of tectonic shifts in media technology, culture and economy. They do it because journalism's mission of public service demands nothing less from them. They do it because a viable, sustainable Fourth Estate is essential for a healthy democracy."
Quotes
  • "Newspapers are a critical part of the American news landscape, but they have been hit hard as more and more Americans consume news digitally. The industry’s financial fortunes and subscriber base have been in decline since the mid-2000s, and website audience traffic, after some years of growth, has leveled off."
Quotes
  • "Of course, as NPQ has covered, local media faces considerable market churn. Last fall’s demise of DNAInfo and Gothamist in New York City and the Baltimore City Paper provide two recent examples. Still, we have also seen nonprofit journalism in Vermont, California, and elsewhere rise to fill the gaps and sometimes out-perform the local media that they have replaced."
Quotes
  • "But while the overall funding for nonprofit news sites presents a “robust picture” according to a recent Institute for Nonprofit News survey of 88 of the network’s media members, large donations by rich philanthropists and foundations generally have benefited only a handful of new startups and nationally focused nonprofit media."
From Part 02
Quotes
  • "Many nonprofit news organizations are working on developing membership programs. These mimic the subscription models of The Washington Post and the like. They also increase the number of individual donations."
Quotes
  • "Research from the Shorenstein Center and Northeastern University found that leading nonprofits — often those who have established themselves over the past decade like The Texas Tribune and ProPublica, both INN members — are able to attract a lot of foundation dollars in a competitive funding environment. Interviewees for that research described the situation as “pack philanthropy,” saying funders can be risk-averse about funding early-stage ideas."
Quotes
  • "Also last week, an effort to raise a $1 billion fund for local non-profit news growth headed by Elizabeth Green, CEO of Chalkbeat, and John Thornton, a venture capitalist who backed the launch of Texas Tribune, was announced."
Quotes
  • "INN is seeing higher growth from individual donors, finding that readers are actually more willing to make donations than to subscribe in the current culture. And though most nonprofit news organizations are typically young, about eight years old on average, they represent almost $350 million in overall revenue growth."
Quotes
  • "The Texas Tribune generated $9.1 million in revenue last year, up from $7.7 million in 2018. Of its projected $10.1 million in revenue this year, the site expects to get about $2 million from major donors, close to $2 million from corporate sponsors and about $2 million from events like its annual festival, Smith said. That helps pay for the largest reporting staff covering any state capital in the country."
Quotes
  • "The City launched on Wednesday morning, six months after the project was first announced. The lead story was about the spending habits of Manhattan District Attorney Cy Vance. The project describes itself as "an independent, nonprofit news outlet dedicated to hard-hitting reporting that serves the people of New York.""
Quotes
  • "SALT LAKE CITY (AP) — The Salt Lake Tribune announced plans Wednesday to become a nonprofit as it moves toward a nontraditional model that it hopes will ensure long-term stability after years of financial struggles fueled by declines in advertising and circulation revenues."
Quotes
  • "Huntsman said the nonprofit model was “the only way” to restore The Tribune’s financial stability. It continues to lose millions of dollars yearly to a precipitous decline in print advertising revenues and circulation"
Quotes
  • "These major cutbacks, according to the Institute for Nonprofit News (INN), are fueling the growth of nonprofit news outlets. "
  • "Existing, for-profit media outlets are also flirting with the nonprofit model. In late 2017, both the Guardian and The New York Times announced the establishment of nonprofit wings."