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The Nonprofit QuarterlyJanuary 21, 2010; Editor and Publisher | Can nonprofit, mostly online newspapers compete with the big, troubled print-focused dailies? In Chicago, the Chicago News Cooperative (CNC) is having no trouble. Their stories appear with increasing frequency in major newspapers such as the New York Times. Apparently, CNC’s relationship with the Times distinguishes this outlet from comparable nonprofit online newspapers such as MinnPost and the Voice of San Diego.The Times runs Chicago-oriented stories on Fridays and Saturdays in the version of the paper they circulate in Chicago. Mainstream reporters and editors, including James O’Shea, formerly the Chicago Tribune’s managing editor founded CNC. O’Shea came up with an idea of creating a new online paper as a co-op, got the Chicago-area public television station WTTW to adopt it giving it 501(c)(3) status, and then convinced the John D. and Catherine T. MacArthur Foundation to give it a $500,000 grant. CNC might eventually restructure itself as an L3C (low profit limited liability corporation), authorized in Illinois, that would potentially enable it to tap foundations for PRIs at the same time they tap individual investors for support. O’Shea’s objective is to increase the staff from its current six full-time and seven freelance journalists to between 25 to 30 staff, which he thinks can be done if CNC can land 30,000 to 40,000 subscribers paying $2 a month. As we’ve covered here, a similar local online paper, the Chi-Town Daily, announced plans to convert from nonprofit to for-profit status. Perhaps both Chi-Town and CNC will end up as L3Cs tapping foundations for PRIs. It is still hard to see how the nonprofit model works just on PRIs and possibly grants from foundations. We suspect that ultimately, a foundation would have to provide a pretty substantial endowment to the newspaper to give it the basis for some real long-term sustainability.—Rick Cohen

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