Local News Revenue Conundrum: Foundations

To diversify revenue streams media providers in the Pacific Northwest and elsewhere are experimenting with a range of different way to secure income. Previously I mentioned One popular way newspapers are doing this is through paywalls, digital subscriptions, and events. In this post, we will discuss the use of foundations.

A number of media outlets have benefited from foundation funding, with the John S. and James L. Knight Foundation being perhaps the best-known donor to U.S. journalism. Recent projects benefitting from their support include the Baltimore Reporting Project, e orts to provide legal assistance to individual journalists and new organizations, the newsroom digital transformation project run by the Institute for Journalism in New Media, and a two-year, $200,000 grant to support Local Independent Online News Publishers.

In early 2017, the Knight Foundation supported 60 nonprofit news organizations, such as Charlottesville Tomorrow, IowaWatch.org, and St. Louis Public Radio, through a $1.5 million fund offering to match donations from individual donors of up to $25,000 for each participating organization.

For transparency, it should also be noted that the Knight Foundation has also supported e orts led by the Agora Journalism Center at the University of Oregon to “support [a] digital gathering space for people passionate about journalism and civic engagement.”

Other bodies have often had a more specific geographic or subject focus. This includes the Dodge Foundation’s work in New Jersey—worth more than $3.25 million in the last ve years —and the Public Square Program at the Democracy Fund, which supports innovations and institutions designed to help people understand and participate in the democratic process.

The Democracy Fund’s website notes that “current grantees of the Public Square Program include the Institute for Nonpro t News, the American Press Institute, and the Engaging News Project.”  It has also supported the work of the Agora Journalism Center.

Given this, “one thing that surprised me,” admits Matthew Powers, assistant professor in the Department of Communication at the University of Washington (Seattle, WA), “because we hear so much about foundations in the U.S. is, at least within Seattle, how small a role they play.”

He continues:

In fact, I had multiple people at online startups tell me basically good riddance with foundations. And their reason was pretty straightforward. The claim was—and I think it’s a reasonable one—that foundations tend to be interested in the latest ideas, and they want to fund new things that are exciting and interesting. They don’t want to fund sites that already kind of work but actually need support. And so, in a lot of ways, there’s this kind of skepticism built in because they don’t think that they can actually get resources to support the type of work that they do. And they’re right. I don’t think they’re entirely right, but I also don’t think they’re entirely wrong.

One notable exception in the Pacific Northwest is Education Lab at the Seattle Times. Launched in October 2013, the initiative “spotlights promising approaches to some of the most persistent challenges in public education.”

Education is an important topic, but a subject area that “wouldn’t draw huge audiences,” suggests Jim Simon, the paper’s former managing editor. He says:

Most of the stories don’t draw huge audiences. Some of them do really, really well. But we can monetize it with outside funding too. Or continue doing that kind of reporting with outside funding.

A similar foundation-supported approach enabled the paper in 2016 to travel to South

“Fani, 2, looks at her mother, left, who is resting in the Nkosi’s Haven sick bay in Johannesburg. The nonprofit offers housing and care for mothers with HIV, their children and orphans, some HIV-positive. The organization last month marked the 15th anniversary of the death of Nkosi Johnson, the founder’s adopted son.” (Erika Schultz/The Seattle Times).

Africa to produce a two-part series exploring how research led by Seattle scientists could help eradicate HIV. Reporter Nina Shapiro made the trip to South Africa on an International Reporting Project fellowship, and funding for overseas reporting by the Seattle Times is provided by a grant from the Seattle International Foundation.

Education Lab is funded by grants worth $530,000 from the Bill & Melinda Gates Foundation ($450,000) and the John S. and James L. Knight Foundation ($80,000). These funds are used to “pay for the salaries of two education reporters, allowing us to expand our education team; an editor and photographer primarily dedicated to the project; and a newly hired community-engagement editor.” Other monies are used “for community outreach and public forums, creation of a blog and design and data work.”

Produced in partnership with the Solutions Journalism Network, Education Lab seeks “to create a new conversation that connects teachers, parents, students, and others around innovation in schools.” Outputs include articles, events and community meetings, and a weekly newsletter.

The initiative’s website notes that “foundation funding is not new” for the paper,

Students from Rainier Beach and Foster high schools ll out placards for the photo booth at Ignite Education Lab (Bettina Hansen/The Seattle Times)

citing a grant from Pew back in 1994, through to more recent support, such as a grant from the Seattle International Foundation to help cover “international reporting on global poverty issues.”

The website notes: “The Seattle Times would neither seek nor accept a grant that did not give us full editorial control over what is published,” and that “the Seattle Times is pursuing foundation funding to support public-service reporting projects that are particularly costly or resource intensive.”

Although these e orts have been successful enterprises for the Seattle Times, these types of relationships are not without their challenges.

One key consideration is that the timelines foundations operate on are often very different from those of newsrooms. Another consideration is that success metrics may also vary.

A further issue, as previously identified by Matthew Powers, is the perception “that foundations tend to be interested in the latest ideas, and they want to fund new things that are exciting and interesting.”

That’s potentially a big issue for online start-ups. Powers estimates there
are between 50 and 100 startups in Seattle, many of which potentially feel discouraged about developing relationships with foundations because of their perceived focus.

As a result, Powers argues that there’s a strong sense among the news start-up community that foundations aren’t necessarily for them, even though many of these local start-ups “already kind of work, but actually need support.”

Reflections

Business and revenue models underpin the ecology of the local media landscape.

As in other regions, organizations are exploring a plethora of different means to generate revenue, including paywalls, events, creative media services, and support from foundations, while NPR and PBS outlets continue to place a strong emphasis on donations and membership drives.

These e orts are part of a wide move to diversify revenue and reduce reliance on print advertising and subscriptions, income sources that are typically declining. Finding the right revenue mix to support acts of journalism is therefore a strategic priority for all news providers, whatever their size or scale.

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