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Raising the ante on regional nonprofit journalism

The not-for-profit model for regional journalism, which MinnPost has been a leader in developing, is getting a big boost in two major population centers: the state of Texas, and California’s Bay Area.

At a conference I attended last week at Google’s headquarters in Mountain View, Calif., the principal  funder of the Texas startup, John Thornton, was one of the presenters. He explained [PPT] to the crowd how a venture capitalist like himself came to the conclusion that for-profit public-affairs journalism had a bleak future and that the nonprofit model could ensure a steady flow of serious public-affairs reporting to a region. Thornton is backing up his words with $1 million of his own money, and has already raised $2.5 million more from individuals and foundations. The Texas Tribune will launch in November, and I have agreed to serve on its advisory board.

The conference was sponsored by the Graduate School of Journalism at University of California-Berkeley, which recently announced that it will be part of a partnership launching a nonprofit news site for the Bay Area with an even bigger startup gift: $5 million from San Francisco financier Warren Hellman.

These are heady numbers. We made the decision to launch MinnPost two years ago after we had secured commitments of $850,000 from four donors. At the time, that was the biggest stash for a regional nonprofit startup. We’ve since raised more, of course, but nowhere near as much as Thornton has assembled before he leaves the starting gate.

Not everyone is on the nonprofit journalism bandwagon. Jack Shafer wrote at Slate.com last week that it substituted one flawed business model for another. He raised the problem of preserving editorial independence from influence by funders: “No matter how good the nonprofit operation is, it always ends up sustaining itself with handouts, and handouts come with conditions.“

I don’t buy his argument for this reason: Journalism costs money, and money has to come from somewhere. If it’s not foundations or major donors, it’s advertisers or (in the case of the BBC) the government. If needing money makes for a flawed model, then every model for doing public-affairs journalism will be flawed. The key is to be committed to editorial independence and to be transparent about where you’re getting your money.

My personal mission is to sustain high-quality professional regional journalism while adapting it to the dramatically different digital environment. The for-profit model is a great way to sustain an enterprise, if — to state the obvious — you believe you’re engaged in an activity that can be profitable and you see a path for creating that profit.

Historically, media have relied very heavily on advertising to produce the revenue, but the Internet is sharply eroding the price advertisers will pay to reach eyeballs. For-profit publishers are struggling to figure out if they can keep things afloat by charging online readers and viewers, but so far no one has succeeded in getting a lot of people to pay for general news.

A nonprofit like MinnPost has the advantage that it can ask readers for donations. These are not what Jack Shafer calls handouts. They are a revenue stream based on a voluntary commitment to support something that builds our community. We recently passed the 1,500 mark for annual members, who give us anywhere from $10 to $20,000 a year, with most giving either $50 or $100. (What, you’re not a member yet? Please!)

We also can get foundation grants, which this year are contributing more than $400,000 to support our journalism. We sell advertising and sponsorships, too, but right now I don’t see any way we could come close to paying all the bills just from that. One strategy I see some local for-profit sites succeeding with is keeping their costs extremely low — but our goal is to pay professional journalists for their work.

I had to leave the conference at Mountain View a few hours early and hop a Caltrain, because I was speaking at a workshop before the opening of the Online News Association annual conference in San Francisco. The workshop was called “Fund My Media,” and I was appearing late in the day, along with Voice of San Diego CEO Scott Lewis. We were billed as the ones who had hit the million-dollar mark in annual revenue. The Voice of San Diego is 4 years old, and we’re the baby at almost 2.

The Voice and MinnPost do some things differently, but we agreed that being a news publisher today is both exhilarating and challenging, and that it’s important to diversify your revenue streams. It’s also important to experiment and keep learning — from your readers and the voluminous data that pour in — about both the things that work and the things that don’t.

At MinnPost, we are confident that the nonprofit model for regional public affairs journalism can work, and we thank every one of you who is helping us prove it. We expect at year-end to report substantial progress on every important measure compared with our first full year in 2008. 

Of course, if anyone out there wants to donate $5 million, or even $1 million, so that we can ensure our future and do this on a bigger scale, please give me a call.

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