Can philanthropic funding save independent journalism?

Credit: Katt Yukawa on Unsplash

The pandemic has taught the news industry a few good lessons. One of them was that philanthropic funding of public interest journalism can help newsrooms become sustainable, focus on their communities and remain independent.

In the latest fundraising campaign that run in November and December 2021 in the US, the Institute for Nonprofit News (INN) raised $12 million to support the NewsMatch programme that benefits non-profit news organisations in North America. It saw some 300 independent newsrooms ask their audience to fund their journalism. Every dollar raised was then matched by a national pot of money provided by large funders.

When journalists mean business

According to Sue Cross, executive director and CEO of INN, the idea of donor-funded non-profit news started to take shape around 2009 as a way to preserve investigative journalism. Seven years later, during the 2016 Newsgeist conference, a bunch of media professionals decided to test the model and train journalists in independent news organisations to raise public support and money. NewsMatch was born, started by Knight Foundation which attracted big funders like the Democracy Fund, the Meta Journalism Project or Wyncote Foundation.

"We want to transform how communities think about journalism," says Cross. "It is not a business that will always be supported by ads. It belongs to communities."

2016 was marked by another event - the election of Donald Trump as a US president. Although Cross and her team saw a rise in philanthropic funding of news even before then, Trump’s continued attacks on the press contributed to increased support for independent journalism that felt threatened. This was not limited to philanthropic donations and non-profit newspapers - subscriptions to the likes of The New York Times or The Washington Post went up as well.

But to start creating new revenue streams, journalists needed to learn some solid business skills, which was not a given. By encouraging newsrooms to build their local giving network, however, the programme helped them create deeply engaged communities of readers genuinely concerned with the survival of their newspaper.

Donations are not their sole source of funding - non-profit newsrooms need to have three or four revenue streams to be healthy. INN encourages them to monetise other activities like events and training of student journalists as well as seeking out sponsorship opportunities.

Diversification is key to remaining independent. No newspaper can rely on large funding from a donor that could become an object of investigation and threaten to pull the plug. In that sense, Cross says that philanthropic funding is not dissimilar to advertising - a newsroom must be resilient enough to withstand the pressure of a large advertiser pulling out if they dislike the news coverage.

The success

Public support relies on trust and so organisations must be transparent. That includes publicly available information on who sits on the board, their tax returns, salaries and conflict of interest disclosures. This is even more important for local news since journalists are embedded in their communities and often know the people who they report on and are known by them. In a way, Cross pointed out, the resurgence of independent local news organisations brought back that personal relationship between readers and journalists.

Being part of the communities journalists report on has also increased engagement. Many reporters work from coffee shops or organise events to hear first-hand what matters to people. Journalists are also trying to come up with new ways to distribute content, for example via text messages, since print newspapers are in decline.

But "local" means different things to different people - it can be as wide as Los Angeles or as small as a neighbourhood. That includes organisations who do not report on a geographical area but on a specific topic, say, state-wide health or education sectors. Their work then becomes a source for local outlets.

The experiment proved that even the smallest of communities can support its own news outlets. For instance, the small town of Patagonia in rural Arizona has 913 residents according to the 2010 census. It has its own independent newspaper that operates with the support of this tiny community.

But perhaps the most significant change fuelled by donations as well as the pandemic was the resurgence of service journalism. Local newsrooms went back to providing community information, like how to get a free meal if you struggle to feed your children or where to get vaccinated, instead of just commenting on a story. In turn, readers found local news more valuable and were more likely to part with their money to keep the newsroom going.

What needs to improve

Many independent organisations focus on investigative news so they tend to be heavily text-based. Some venture into podcasting but very few investigative journalists with long careers in print are experimenting with videos or other formats.

Given the difficulty to sustain a local newsroom, journalists are not always rushing to experiment with covering an area where they may not gain enough support.

"More than 90 per cent of startups we worked with survived which is quite exceptional," says Cross, adding that journalists needed business training and that was a big learning curve.

But that also means that some startups folded. Sometimes this was because they were based on the passion and leadership of one founder. If that person left before the outlet was fully established, the project collapsed. Some new outlets moved to campaigning and left journalism. A handful of organisations failed to diversify their revenue enough and when their major donor pulled the plug, they were not able to cope. All these examples showed how important it is to think about a news organisation as a business as well as a news provider.

The impact

Ultimately, success is measured in the amount of good journalism. The 350 organisations that are part of INN today produce some 1,000 stories a day that are not reported anywhere else. The alliance now counts around 25,000 journalists who share their data, learnings and advice with fellow members. The network organises conferences and uses virtual chat tools where journalists can ask for insights and help with specific topics.

One of the challenges going forward, said Cross, is focusing on traditionally underserved communities like economically disadvantaged people, black neighbourhoods or those with less formal education. Can philanthropy support journalism that is not aimed at mainstream or affluent groups?

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