Journalism's Silver Lining: Can nonprofit news help save the media industry?

Author:McDonald, Natalie Hope
 
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When the Philadelphia Inquirer was donated to a nonprofit organization two years ago, most readers probably didn't notice the sweeping changes that went on behind the scenes, like appointing a new board comprised of leading journalism school deans and foundation executives, or the $20 million endowment that was set up for the then-new project. What they did start to see, however, was an emphasis on more and better investigative reporting in the sixth largest city in the country.

And here's how it worked: Owner H.F. "Gerry" Lenfest essentially gifted the Inquirer along with the Philadelphia Daily News and Philly.com to the Philadelphia Foundation, or more specifically to the Institute for Journalism in New Media (later renamed the Lenfest Institute for Journalism). The Philadelphia Media Network (PMN), as the company is now known, has since become the beneficiary of key philanthropic donations that have been funding missing critical local journalism.

The move made a lot of headlines in and outside the industry, and for good reason. It was the first time since the 1970s that a major city daily made such a move. And while PMN remains today a self-governing company beholden to its own journalistic merits, the transition has, in part, eased at least some of the financial pains that had previously led to headline-making slashes to operations and talent.

Whether more papers will follow suit is a big question, one that's certainly been on the minds of researchers at Nieman Lab who asked two years ago: "If newspapers are having trouble turning a profit without deep annual cuts, how about becoming a nonprofit?"

An even bigger question might be: Could nonprofit journalism actually help save news? It's a question that's been echoing through countless newsrooms across the country as media struggles to contend with declining print advertising and subscriptions in the digital age. And if the root of the problem is being able to generate adequate revenue (which is down almost half from a mere decade ago), it makes sense that media companies of all stripes and sizes might want to look more closely at the nonprofit news model as a blueprint for operating, well, a little differently.

Bigger Revenue

According to this year's Institute for Nonprofit News "INN Index: The State of Nonprofit News," which was published in early October, there are many quantifiable benefits of nonprofit news, most notably the ability for editorial to focus on original reporting with deep coverage into key civic issues.

In fact, 40 percent of the nonprofit news organizations surveyed defined themselves as being "primarily investigative." One in four, says INN, regard their mission as "analysis and explanatory journalism."

These days, most nonprofit media organizations tend to be focused on topics somehow involving and/or impacting the public interest. "Single-subject news is one of the fastest-growing categories in nonprofit media," according to the report. "A third of news nonprofits focus on a single subject such as health, education, environment or justice."

The editorial choices are having an impact on the bottom line, said Sue Cross, executive director and CEO of INN. More than half of the nonprofits surveyed generated $500,000 or more in revenue in 2017 (and a third made $1 million or more).

"The nonprofit field is still highly reliant on charitable giving," said Cross, "with grants and donations accounting for 90 percent of total revenue."

The report also shows that as more nonprofits dig deep into investigative news, readers are taking notice and opening their wallets. 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.

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