VTDigger [CC BY-SA]

January 27, 2020; VTDigger

VTDigger is bucking the “dying local journalism” trend in a big way. Its readership has grown to nearly 300,000 in just ten years, and it has produced award-winning investigative journalism. Not only that, but its revenue has grown and diversified, making it a reliable community resource. Digger’s work was noticed last year by the American Journalism Project (AJP), and together they’re taking Vermont’s local nonprofit news to the next level.

AJP is investing $900,000 in Digger over three years. (The paper’s current operating revenue is about $1.5 million a year.) This kind of capital investment extending over a multiyear period is still rare in nonprofit news. Founder and editor Anne Galloway says this strategic investment means three things:

  • Expanding business operations. Galloway’s first hires in 2011 were one reporter and four business staff; she now has 20 reporters and editors, and six business and technology staff. Digger strategists hope that expanding their business capacity will help them grow readership in a sustainable way.
  • Learning from others in AJP’s first cohort; there are 11 organizations total.
  • In their own words, “Finally, and most importantly, this is an opportunity to find new ways of supporting local media and to contribute to a growing national movement that calls on Americans to regard journalism as a public good that should be supported in the same way we maintain our parks, museums and schools.”

That third bullet point is why VTDigger is a good match for AJP. The fund, which refers to themselves as “venture philanthropy,” aims to grow local news to a $1B sector, equal to public radio. AJP is a new player—they started in 2018—but their funding practices sound similar to Ford’s BUILD grants, which NPQ reported on last year. They intend to invest transformative capital, to give their grantees the capacity to grow quickly and support a national movement.

Grantmakers have their own ideas about what makes an organization successful or sustainable, and AJP is no different. They want to see organizations build a base of local donors and supporters. The Digger’s editors agree; they write, “AJP’s investment in our business operations means that more local donations can go toward strengthening our newsroom and news-gathering capacity.” Their most recent form 990, from 2017, shows about a third of their budget coming from earned revenue, and a chart created by the Institute for Nonprofit News shows $330,000—about a fifth of the budget—from membership. That money derived from the readership community is “renewable and reliable,” and thus is worth more in lifetime value than other types of revenue. As a proportion of budget, that compares very well to others in the field.

In 2018, the Institute for Nonprofit News produced a report on VTDigger, charting its founding and lessons learned. The report explained how Galloway had “embrace[d] the grind” and used partnerships with other projects, like the Vermont Journalism Trust, and other newsrooms, like the Banner, to expand her reach. The report also highlighted the crucial role of the board, which served all three potential major functions: fundraising, strategic guidance, and governance advising.

“People with expertise in various fields and standing in the state tend to actually want to be involved, and we try to make sure that happens,” said Curtis Koren, the board chair. “Why have a bunch of movers and shakers signed up for the board if they’re not given the opportunity to move and shake?”

AJP is rewarding VTDigger’s smart strategies: invest early in the business side to ensure sustainability, stay connected to your local community (Galloway still hosts or speaks at community events each week), and stay mission-oriented. Galloway admits that (like another news organization we know), her outlet has sometimes criticized its own funders, but always and only in a spirit of fair-mindedness and professional integrity.

“We published stuff every day that pissed off someone,” she said. “But you have to do something remarkable—you have to do more than just exist.”

This kind of gift, as NPQ knows very well, pays off in big ways in terms of providing a solid financial base for bold and independent reporting. Its accuracy in strategy is unsurprising, in that the endeavor involves seasoned financiers with a well-thought-through national strategy. According to David Leonhardt, the former Washington bureau chief for the New York Times, “The co-founders of the Project, Elizabeth Green (a journalist) and John Thornton (a technology investor), have big ambitions. They think the country needs to raise about $500 million a year in national philanthropy for local news, which could then be matched by another $500 million in membership fees, advertising and other local revenue. The combined $1 billion would allow local publications to approach the size of public radio.”

We congratulate AJP on its good-sense grantmaking and look forward to seeing the results as implemented at ground level.—Erin Rubin