The Knight Foundation has a new report out that looks at the sustainability of non-profit news entities such as the Texas Tribune, ProPublica and smaller ventures like MinnPost and Oakland Local — and the bottom line (in both senses of the word) is that successful non-profits have to pursue much the same strategies as for-profit news organizations: in other words, they have to broaden their revenue streams and seek out new ways of attracting public support.
Someone once said that all news entities are non-profit, it’s just that some attain that status willingly and others are forced into it — a comment that is probably not as humorous if you happen to be in the traditional media, where paywalls and declining revenues are the norm.
But this somewhat sarcastic view of the media world is becoming truer every day, as the boundaries between non-profits like the Texas Tribune or ProPublica and mainstream news entities continue to blur. The Washington Post has been unprofitable for so long that its owners had to sell it to a well-meaning billionaire, just as the Boston Globe and others have been acquired by deep-pocketed interests. That’s not that different from having charitable donors.
Relying less on funding from charities
The Knight report, entitled “Finding a Foothold: How NonProfit News Ventures Seek Sustainability,” looked at 18 non-profit news entities — all the way from the hyper-local to those at the state and regional level — based on their financial and operational performance during the period from 2010 to 2012, and is an extension of an earlier report from 2011.
The report includes competitive datasets for each of the 18 organizations, available as a PDF or a single Excel spreadsheet, so that other entities can benchmark themselves and see how they compare. And one of the things that became most apparent from its research, the Foundation said, was how non-profits are broadening their revenue to include events and other sources:
“Importantly, the nonprofit news sector is growing but relying less on funding from foundations, as organizations find more individual donors and cultivate earned revenue from events and corporate sponsors.”
As a group, the non-profits showed revenue growth of 30 percent over the three-year period, and a majority — 14 out of 18 — were running at break-even or better (something many mainstream media outlets would probably like to boast of). It should be noted that the Knight Foundation provides funding to a number of the entities surveyed, including ProPublica, which it recently provided with a $1.9 million grant for data-driven news applications.
Meet a market need and diversify revenue
The key takeaways from the report cover a number of different aspects of what a non-profit news organization is set up to do, such as providing services that communities need — rather than simply focusing on the bottom line or building an advertising-oriented business, the way a for-profit entity would. But in many ways, the things it suggests successful non-profits do are fundamentally the same things that every media outlet should be doing:
Focus on the market need: The report says successful non-profits have a strategy that “grows out of observing the market in which they operate and identifying a balance between two extremes – coverage that’s so broad it’s hard to build a community around it while so narrow that it creates long-term financial challenges.”
Measure everything: The Knight Foundation suggests that in addition to just tracking traditional metrics like monthly unique visitors, non-profits should “focus on indicators that offer feedback on repeat user engagement [and] combine this data with qualitative narrative accounts on how their reporting affects their target community.”
Diversify your revenue stream: Successful non-profits “strive for diversity in funding,” the report says. They look for ways to decrease the proportion of their funding that comes from foundations, and to raise the amount that comes from their community directly through sponsorship, events and individual donations.”
Go where the audience is: The non-profit organizations worth emulating understand that the way people consume information is changing, the Knight report says — they aren’t just focusing on a homepage on the web, but on new formats such as mobile, building sites that use responsive design and putting a priority on social media.