Mark Jurkowitz on New Nonprofit News Sites and Their Search for a Business Model

Print Share on LinkedIn More

 

cracks

Editors’ note: Mark Jurkowitz, co-author of Nonprofit Journalism: A Growing but Fragile Part of the U.S. News System, a new study by the Pew Research Center’s Project for Excellence in Journalism, has been writing about journalism in one form or another since 1987, when he began writing a column for the Boston Phoenix, titled “Don’t Quote Me.” NPQ felt that his perspective on the importance of these small, emergent and increasingly vital civil society organizations among us was important to the whole sector but especially for philanthropy. In our opinion, if philanthropy cares about an informed populace and about democracy and healthy communities they will begin to insert some capital into the creation of business models for journalism that make best use of this sector’s strengths and characteristics. But enough of our opinion…


 

NPQ: Mark, we have been following your critical coverage of journalism for decades. There may be no one better to ask this question of – How significant do you think is journalism’s shift from the for-profit to the nonprofit sector?

Mark Jurkowitz: One of the reasons that we did this study is because we look at this fragmenting, changing media ecosystem, for want of a better term, and the trends that have been predominating in recent years, and one of the biggest and most important trends is the scramble to compensate for the loss of reporting resources in traditional legacy and media outposts.

And, the question is, what does it mean for these news organizations? And what is the American news consumer getting now compared to what he or she might have gotten a while ago? The analogy I like to use is icebergs and global warming. You know, the big icebergs—the big newsrooms—have been melting and shrinking for some time now. And emerging in this changing landscape is a bunch of ice flows. They’re not as big as these original news organizations, but they have the potential to become a very significant player, we think, in the redistribution of journalistic and reporting resources.

So, in that context, if you were to put a dollar figure on the nonprofit news sector right now, it would pale in comparison to that of the traditional—even though shrunken, now—media business. But the fact that there are now hundreds of nonprofit news organizations (at least 172 that we’ve identified, and we’re sure we didn’t get every one of them) operating throughout almost every state in the country, and working to fill in these gaps and become an enduring part of the shifting reportorial resources and kind of news that people get, is, we think potentially very significant.

And because there doesn’t seem to be, at least in the short term, any chance of reversing the trend and building back those big legacy newsrooms, the services that these kinds of organizations can provide—the slack they can pick up, the things they can cover, the news they can produce for their audiences, their consumers, their users—is potentially very significant.

Most of the organizations we studied are fairly small. We know that they are not trying to replicate the general interest model of the legacy news media. They are very much interested in having, in some ways, an editorial niche focusing on areas that they think are being under- covered. Look at the biggest of them, such as ProPublica. Their whole raison d’etre was, Look, in tough economic times, investigative journalism is very expensive and is likely to be high on the chopping block. We think those investigative units in which you’re only paying salaries and asking people to produce a story perhaps every six months or so are probably luxuries in a lot of places. So we see ourselves as filling that niche. That, I think, is pretty much the credo of sorts of the nonprofit news universe.

NPQ: Which requires that you have a network of small niche groups that can somehow cooperate in the processing of a whole lot of information. Would you say that’s true?

MJ: Perhaps, yes. Many of these organizations can stand on their own, and with finite editorial missions and goals. Even a three-to-five-person newsroom can produce real news of value. But, the extent to which they can partner with other media outlets helps magnify their editorial voice. It not only helps disseminate but also, to some degree, the folks in this sector are trying to make it part of their business model going forward. It will never completely supplant foundation money or donations, but it is part of this emerging business model. If they can provide content and syndicate content, that would certainly magnify their voice and their power—and, frankly, build a better bottom line.

NPQ: It seems like, far from restraining you, the nonprofit model actually brings some benefits in terms of the business model. It can not only provide additional sources of revenue but also some cost cutting. . . . You pointed out just now not only the role of foundation grants, which have traditionally, although not exclusively, gone to nonprofits, but also that of individual donations. Are we looking at something in terms of these media outlets that approaches public broadcasting?

MJ: I think over time it may more closely evolve into a subscriber model. When you look at the business models for these organizations—and many of them are very young, so they’re evolving—you see a heavy reliance on foundation money. That’s clear in our survey, and I think that everyone who thinks and cares about the nonprofit sector fundamentally agrees that, for the most part, diversifying revenue sources going forward is going to be the key to long-term sustainability. Kevin Davis, at the Investigative News Network, puts it best. He talks about three buckets of giving: the big foundation or individual grant money; earned income, which can be anything from sponsorships to memberships; and partnerships and events.

But then there’s making yourself indispensable to your own community: so, building a base of users. Some of the communities are geographic, and some of them are communities of interest. The traditional legacy model was a geographic community model. As you can tell by what they’re covering, this can be more of a community’s interest model. But, ultimately, Kevin Davis feels (and I think there’s a lot of truth to this) that the road to ultimate sustenance is to build a base of consumers, users, fans—whatever you want to call those who are going to support your organization financially going forward. And, so, yes, to that extent it’s morphing more toward the traditional sort of public media model that we know from television and radio.

NPQ: Another similarity you’ve noted is that a lot of these organizations are also using volunteers pretty actively.

MJ: Yes, one of the key findings here is that by and large most of these organizations are small. The overwhelming majority, roughly about three-quarters of them, have five or fewer full-time paid staffers. Many are heavily reliant on volunteers, and that includes those that have more staffers. So, it’s not simply a function of not having anybody on staff and so taking interns off the street. The volunteer component, I think, at least in the early stages, is helping to sustain these organizations, and produce content, and do other tasks that are necessary. Over time, if these organizations become successful, more entrenched, build a healthy bottom line, you might see some reduction in the level of volunteerism as opposed to building bigger staffs. But, for now, it’s clearly an important element. And I think it probably speaks to something else, which is the “labor of love” mentality. A lot of these organizations have been founded by people, many of whom were legacy journalists, who may have worked at the big legacy outlet in town and feel very strongly about the need for journalism. A number of these organizations on the local level are staffed by people who have a passionate commitment to their communities or the issues they’re covering. And, I think, that atmosphere invites volunteerism and people who feel the same sort of commitment to the editorial mission.

NPQ: The differences between the organizations that were sponsored—umbrellaed by other organizations—and the ones that were independent are interesting. Can you talk a little about that?

MJ: It is interesting, and I’m not sure what to attribute it to. Initially, we identified and did an audit of 172 organizations, but only 93 agreed to fill out the survey. What we found was that, of the 172, only about a third were independent. And when it came down to looking at the smaller universe of survey responses, they were clearly less reliant on major seed grants. Less than half of them started with a major seed grant, and for us, by definition that meant a grant that counted for one-third of their initial funding, while two-thirds of the outlets sponsored by another nonprofit or a news organization or a university were reliant on that. Another interesting thing is that the independents were more likely to have more revenue streams than the sponsored nonprofits. I guess that would go hand in hand with the idea that if you’re not going to be reliant on big grants—at least in the case of startups—then you’re going to have to get out of the box quickly and multiply your revenue streams. Why that is, what the thinking is internally at those organizations, I wish I could tell you. I don’t even have really good informed speculation on that.

NPQ: What findings in the survey surprised you the most?

MJ: There are two really interesting things in the survey that in some ways play off against each other. First, the size and the scope of these organization are interesting, because, frankly, when people have written or talked about nonprofit news, a majority of the coverage has focused on the large well-known ones: ProPublica, Texas Tribune, MinnPost, Voice of San Diego. Many of these organizations are right down in the trenches, very lean and mean, but out they are really doing the job. And, so, first and foremost, it’s good to get a handle on how many of these organizations are really doing their thing with a very small staff and minimal resources but also to understand that it doesn’t mean they won’t survive.

I think the two fundamentally interesting things are: one, the level of optimism. We have 81 percent of the folks that responded in our survey saying that they’re very confident or somewhat confident that they’ll be financially solvent five years down the road. That’s impressive. I’m not sure what kind of numbers you get if you ask people running legacy media outlets and regular newsrooms these days. Four times as many said that they expected to add—rather than reduce—staff in the coming year. So, clearly, among the people working and leading the nonprofit news sector there is the sense that they will make it. Some of that may be psychology. You’re so immersed in this really interesting—young, in most cases—startup organizations, and you’re so involved in the mission, there’s a real buy-in psychology.

But, it appears that the biggest single challenge they have to their success is finding the right business skills and resources. On the one hand, it’s logical, because many of these organizations no doubt were founded and overwhelmingly staffed by journalists. If you’re a “nontrepreneur,” you’re probably not thinking about starting a seven-person nonprofit news organization—you know, with your MBA. So on some level it makes perfect sense.

When you see the numbers and read some of the open-ended responses we got on our survey questionnaire, you see that they feel that they understand that to make this model work, they’re going to have to be better and richer on the business side—which on its face would seem to contrast with the optimism a little bit. To me, that’s fundamentally the most interesting finding.

You see that in the legacy media, too—even in the newspaper industry, which is obviously the hardest hit to some degree. And this is anecdotal, but the folks that are still around—the folks that are working on paywalls—they’re also rebuilding their business model. And, with respect to the folks that have been part of this transitional effort—as bad as the numbers have been in recent years, if you stuck around and you’re fighting the good fight, then I think it’s human nature to be optimistic about what you’re doing. And, more largely speaking, the nonprofits are obviously in a new universe, and their business model is going to be very different from the legacy media’s business model. But it’s interesting that on some levels their task, although maybe on a smaller scale, isn’t all that different from the task of the legacy media, for whom, to some degree, advertising was the foundation. And, as that model breaks up, particularly in the digital world, they find themselves trying to create a whole set of new and different revenue streams—nontraditional ones.

NPQ: Do you find this moment in journalism exciting or do you find it terrifying?

MJ: I find it exciting. I think once you get past the hand wringing that comes with the economic upheaval and the carnage that’s been done to the legacy media sector, you realize that the news universe is changing in ways that we haven’t seen in a generation or more. And to me the nonprofit sector is one of the most exciting and potentially interesting players. There have already been a couple of phases of this. The hyper-local journalism, the Citizen Journalism Movement, which still exists obviously, to some degree. And I think it was J-Lab that, a few years ago I believe, issued a report in which they identified about 700 or 800 of these types of operations, and many were mom and pop ones, led by people who cared about a particular civic issue. Forget about business models—many of them weren’t even looking to make money. And, of course, understandably there was this tremendous sort of churn and burn. People burned out, and these entities died out.

This is a different animal. This is a sector that, as a piece of this news landscape, is another attempt to build the puzzle out, and that does require professionalization—that does require building a business model. I think if the nonprofit sector, to a significant extent, becomes successful and proves that there is a model for doing this, potentially that’s great news for the person who counts the most at the end of the day: the American news consumer.