In New Haven, Connecticut, consumers are able to get in-depth and investigative coverage of their medical system because it’s funded by sponsorship of a health fair, which also brings vital health connections to poor neighborhoods.
In Seattle, the Globalist started writing workshops for non-journalists and from that created one of the country’s most diverse news teams, helping people in the Pacific Northwest understand and keep up with news linking global and local communities.
In Washington D.C., the Double Exposure investigative journalism documentary festival has drawn crowds for two years and generated new financial streams to support journalism done by the nonprofit 100 Reporters.
In each of these communities, small injections of capital for local nonprofit news media – up to $35,000 each – launched these projects and brought reliable news coverage to more citizens, deepened community ties, gave more people a public voice, and generated money to support strong reporting. They illustrate what can happen when public service newsrooms have access to seed funding to try new things.
For communities across the U.S., finding new ways to support journalism in their towns or state or around a public issue is a critical challenge.
To help address this need, the Institute for Nonprofit News has distributed more than $1 million in INNovation Fund grants of up to $35,000 to nearly 40 nonprofit news organizations over the last three years. Funded by Knight Foundation, with Democracy Fund joining in the latest round, the grants are designed to cover initial costs for a news organization trying an innovative project to build revenue, audience or both.
No all succeeded, to be sure. These were experiments and some failed. But the overall finding is clear: giving seed funding to public service newsrooms to try new things is an approach that pencils out well.
The INNovation Fund grants enabled entrepreneurial journalists to take the time and risk to try something new without jeopardizing what they had already built. It covered set-up costs for new ventures and enabled quite a few of the grantees to develop new and ongoing revenue streams or larger audiences.
Of 22 early-round INNovation projects, 16 had positive outcomes and six did not succeed. Five generated clear revenue gains. Five found new audiences that hold strong promise of strengthening revenue as well as readership over the long term. Six reported positive results, though they veered from the original goals and may not generate revenue. Of the six that failed, three finished their projects but the results didn’t materialize and three were a bust due to changes in people, partners or their theory just didn’t bear out.
Revenue gains were modest but in many cases repeatable or ongoing. Many project leaders reported they now feel more capable and confident about taking a risk and exploring new markets or products – which may drive the most long-term impact.
A few threads from across the grant projects and similar experiments:
It takes a few tries to figure out what works. Projects that looked marginal on first try succeeded on the second go. First-try proceeds often were eroded by underestimated costs and effort. When they repeated experiments a year after, organizations had figured out how to do things faster and cheaper and could better project ongoing revenue.
Types of projects that did well include:
- Creating a safe sideline for sponsors. Just as Connecticut Health Investigative Team did with its sponsor-friendly health fairs, many investigative or hard-hitting news organizations create separate products that are affiliated with their main brand but have softer content or are focused on community engagement. This approach addresses a longstanding challenge in accountability journalism -- getting advertisers, sponsors, and underwriters to associate their name with investigative stories. Being next to disclosures of wrongdoing isn’t the brand alignment most companies or sponsors seek. By creating sidelines, the newsrooms were able to create safe sponsorship opportunities without compromising their hard-hitting coverage.
-Generating new revenue around what they already do. In New Orleans, The Lens has a now well-known example: turning speaking requests that were pinching their reporting time into a paid speakers bureau. Others drew dual purpose from content they developed for their publications by repurposing it in events funded by sponsors and ticket sales.
-Carolina Public Press and others saw significant gains in donations after broadening awareness and audience through road shows and public meetings and are continuing to build on that.
What was tough to pull off?
Tech development. Several projects were crafted around developing something the news organization needed itself, with the idea that others with similar needs would then license the software. The difficulty is that while a grant or seed money may cover initial development, the continual updates needed to maintain and commercialize them may be too expensive or outside a news company’s core competency. That said, these projects often created value in other ways -- they added to the knowledge and code base in the open source community, for example.
Some organizations that tried making mobile applications for targeted uses found the cost and execution hurdles too high, or public interest and usage low.
Informal partnerships often flop. Contracts give clarity. Formalizing terms and responsibilities up front is particularly important when the people in a partnership change, and too many projects did not go to that formal stage before committing. Projects fell apart when a champion left or the partner organization changed priorities. We believe partnerships can be very valuable if both sides fully negotiate details and commitments in advance.
One of the biggest learnings comes from proposals as well as the projects: Winning revenue projects usually focus on one revenue play, one focus.
Many new revenue ideas in journalism start with a great editorial or audience engagement idea. Then the organization tries to monetize it in four or five different ways. The feeling behind that is understandable. New revenue plays are all uncertain, so the thinking often is: Try them all, see what sticks. The problem is that time and focus get stretched too thin, particularly in small news organizations.
What seems to work better is the outrigger canoe approach -- one main play, one main focus, with a small alternative revenue play off to the side as your outrigger. Getting everyone in one boat forces all to thoroughly think through the main revenue bet and fully commit to it. That increases success. Having the secondary revenue play out to the side helps smooth things out through the choppy seas of a new venture without being too distracting.
The news business – wildly disrupted as technology drained its advertising revenue and consumer habits changed – needs continued experimentation.
Providing seed funding that can help public service newsrooms try new ventures is a relatively efficient way to foster new capabilities and new revenue lines for nonprofit news.
It helps these nonprofit businesses access the capital needed to expand and experiment, and to open new avenues for revenue and audience-building that can grow their reporting resources.
And the ramifications go well beyond the short-term impact of specific projects. Building the risk tolerance and business skills to start new ventures will build the long-term sustainability these news organizations need to carry out their public mission. Ultimately, that will help more people receive credible information from public service, nonprofit newsrooms.