Nearly three years into its publishing life, the nonprofit St. Louis Beacon starts the new year with some breathing room thanks to a $1.25 million gift from the hometown Danforth Foundation. The gift, the largest single donation so far, is being paid in two parts: half banked in 2010 and the remainder due by the end of this year. Combined with other donations, grants and money raised from events and sponsorships, the Beacon ended 2010 with a total raised of $2,894,000 — and even without adding any other funds this year, should push past $3.5 million.
The Beacon‘s staff and supporters view the Danforth funds as a chance to shift from reliance on philanthropy to a focus on developing other revenue streams. That may sound contradictory but the startup finally will have enough of a cushion to start weaning itself from relying on a handful of large donors such as Emily Rauh Pulitzer, the widow of Joseph Pulitzer Jr., who pledged $500,000 in a matching grant — $1 for every $3 the Beacon raises. For a sense of what that matters, look at the breakdown of the funds raised, excluding the second Danforth payment:
— Donations: $2,410,000
— Foundations: $266,000 (includes $90,000 from the John S and James L Knight Foundation and $100,000 from the Missouri Foundation for Health for reporting)
— Events: $210,000
— Sponsorship/Advertising: $8,000
The full Danforth gift is slightly larger than the Beacon’s 2010 budget of $1,142,000, enough to cover expenses for a staff of 21 plus freelancers. More than half of the journalists took buyouts from the St. Louis Post-Dispatch or were caught in cutbacks as the region’s major metro daily sharply trimmed its staff. Most left with pensions and some health insurance. That may help explain why the Beacon was able to operate in 2009 with staffing costs of $700,000, according to its 990 tax filing posted on the site, despite being staffed by veteran journalists — many of whom were top-scale or above at the Post-Dispatch. Some donated much of their services to help found the Beacon. Editor Margaret Wolf Freivogel didn’t take a salary until 2010. That’s also when the community news outlet began to offer health insurance.
The approach varies from some of the other new nonprofit news orgs but the need to find a mix of revenue streams is the same. The size of the gift and the amount of money raised so far is significant but how they will raise enough to sustain a minimum budget of $6 million over the next four years, much less grow, is still unclear. More in therelease.