For this second post about what we’ve learned in conducting Community Journalism Executive Training (CJET) over the past 2 years, I had been planning to offer a few observations about the unique challenges of nonprofit news sites.
And then on Monday, the Pew Research Center published a report on the health of nonprofit news sites. It’s a well-done review of 172 sites with a deeper dive on 93. The findings reinforce many of the lessons we’ve seen at CJET. So I’ll quote from the Pew report where it found similar points, but please note that what follows are my own thoughts, not necessarily those of my CJET colleagues or the Pew researchers.
Nonprofit sites desperately need help on the “business” side. (Pew: “More than half of the nonprofit news organizations (54%) … identified business, marketing and fundraising as the area of greatest staffing need, compared with 39% who said the top need was for more editorial employees.”) Just as with for-profit sites, most nonprofits news sites were started by journalists with little or no business experience (see my previous post), so the gap is both wide and deep. But the nonprofit sites need even more help. They formed under the premise that foundations or individuals would support this work into the future, so looking for new revenue sources isn’t just a business challenge – it can run counter to boards’ and staff’s vision of how things should be. So the challenge for the nonprofit operator isn’t just how to rethink the business; he or she will have to persuade others to rethink it as well.
Grants are drying up. (Pew: “Nearly three-quarters of the outlets that received significant startup grants said those grants had expired—47% before 2012 and 25% by the end of that year.”) And that reaffirms the urgency we’ve seen among nonprofit sites to figure out a sustainability plan.
Catch-22. Grants won’t support sustainability efforts. (Pew: Complicating that effort is the broader nonprofit culture —including nonprofit monitoring agencies—that rewards organizations for spending money on program services instead of business and revenue development.) Grant-making foundations and individuals will fund more journalists, or more community outreach, or more training. But they won’t fund an ad salesperson. Ironically, the best use of seed money might be funding the base salary of an ad rep until the rep sells enough advertising to support him/herself, and to generate a sustainable revenue stream for the site. In the CJET training, we’ve looked for ways that site operators can re-allocate grant money to jumpstart a revenue program. It’s not easy, but not impossible either.
Double-Catch-22. Grants might even undermine sustainability. Would you spend your scarce time writing a $100,000 grant application, or out talking with a prospective $1,000 customer? It’s a no-brainer, and it’s human nature, to go after the highest payoff. (Pew: “The terrain is uncertain and brings with it the near-constant need to replenish expiring grants and drum up new sources of funding.”) There’s no good answer for this. Those grants are drying up, and the operators know they need to develop new lines of business, but who can blame them for going after the grants? The answer is plain old time management: devote the bare minimum of time to the grant applications, and plow even more time into business development.
News coverage sometimes competes with other missions at a nonprofit. (Pew: “Roughly half of the outlets produced 10 or fewer pieces of original content in the two-week period studied.”) That low volume of coverage isn’t universal, but it’s one symptom of a typical challenge. Nonprofit news sites often pursue multiple missions, driven by community needs and funders’ desires. Training, community organizing, advocacy — these all take resources that could be devoted to news coverage. No wonder there’s so little time left for building a sustainable enterprise. In the CJET training, we look for ways to help tighten focus on the highest impact activities, recognizing that the site operator will need to sell his/her board and staff on the idea.
The management challenges are way more complex. If you’re a nonprofit news site operator, you have to deal with a board, with volunteers, with community organizers, and with a mission-driven staff. And they all feel they have an equal say in how the enterprise is run. That’s on top of the readers, commenters, politicians and people-on-the-street that any news enterprise deals with. It takes a rare set of skills to herd all those cats, while also doing a great job covering the news in your chosen community.
People starting a news site sometimes ask whether it makes sense to set up as a nonprofit or for-profit. To me, the only reason to go nonprofit is if there is a guaranteed source of foundation or individual benefactor funding, where nonprofit status is required. Even then I would make sure the grant-maker is interested in funding a sustainability effort from day 1. The challenges we’ve seen in news startups are universal. The nonprofits deal with additional layers of complexity, and sometimes it’s hard to see if the benefits outweigh those challenges.