A look at results from the American Journalism Project’s first set of nonprofit news grants
This summer, the Pulitzer-prize winning Santa Barbara News-Press declared bankruptcy and stopped publishing, leaving its readership of 90,000 people without a primary source of local news and information after more than 150 years in operation. Its closure is emblematic of a failure of the commercial news market, in which scores of local news outlets have closed over the past two decades.
As the first venture philanthropy dedicated to local news, we at the American Journalism Project are focused on ushering in the rebirth of local news as we build a strong, sustainable future for the field. Our unique model supports individual local news organizations and a thriving local news movement across the country.
Our approach to advancing local news is robust and unique when it comes to the depth of our venture support and duration of our partnership with our grantees in particular. We look at existing organizations that have growth potential, and we identify outstanding leaders to support at the incubation stage to launch a new organization. We also look at communities primed for a new local news offering, and launch new local news initiatives. We make transformative investments that support business and operations capacity to help local news organizations grow and scale. We provide capacity building that combines financial investment with coaching and peer learning around fundraising, expense management, hiring, audience and more, all tailored to the varied life stages of the organizations in our portfolio. And all of our grantees remain in our network whether or not they have an active grant with us; we’re invested in the long term success of these organizations and so we continue to provide access to our network and our expertise to alumni grantees. We share what we’re learning about sustainability with the local news field, and we’re also sharing with the partner funders in our network what we’re learning about how to best structure strategic investments in nonprofit local news. By supporting both our grantees and the larger field, we aim to catalyze a movement to raise national dollars, cultivate local champions, attract outstanding talent and advocate for local news as a public good.
Since our launch in 2019, we’ve distributed $46 million in grants to 41 nonprofit news organizations, including 37 established organizations and four concepts in incubation. We mobilized an additional $58 million from local philanthropy to launch market-specific local news initiatives. This summer, we completed the first set of grants we made in 2019: $8.5 million for 11 local news organizations across the country with dedicated venture support over 36 months.
Earlier this year, at our annual portfolio gathering, or as we call it, “AJPalooza,” we took a moment to reflect on the progress of our first cohort of grantees, which includes Centro de Periodismo Investigativo, City Bureau, Cityside, inewsource, Mississippi Today, MLK50, NOISE Omaha, The Connecticut Mirror, Underscore, VTDigger and Wyofile. Here are some of the results from our support for these organizations:
- Our first cohort grew their combined revenue by $15 million over three years, resulting in a 4.9x return. We set a goal for each organization in this cohort to see a 3-to-1 return on our grant, meaning that their incoming revenue apart from our financial support would be three times our initial annual investment. The results we saw exceeded our expectations.
AJP’s venture support focuses on advancing the business operations of news organizations with strong ambitions to grow to meet the needs of their communities. We aim to contribute to newsroom growth, sustain new business hires, and advance long-term stability for the news organizations in our portfolio. We mark success here by measuring revenue growth, but also by looking at the sustainability of the news operations, the growth of the editorial staff, and ensuring that the business staff we fund are sustained after our grant cycle ends.
- As a result, our grantees grew their news budgets by 66 percent. Over the 36 months of our grant support, the media growth for news budgets from this cohort was a 66 percent increase, which in turn increased the number of full time editorial staff employed at these newsrooms. Across the cohort, 58 editorial staff were added to these newsrooms, and $5.5 million additional dollars were spent on local news.
- Our grantees saw inspiring growth across different revenue streams. Together, this cohort of grantees saw a 2.8x increase in membership revenue, 2.4x increase in foundation revenue, 2.2x increase in earned revenue and 1.3x increase in major gifts revenue.
In all, these results are inspiring, but they’ve also helped us understand something important as we continue our work: there is no single model for growth. Across our entire portfolio, we’re seeing our grantees find growth success by pursuing a mix of revenue streams, including advertising, membership, major giving and earned revenue.
Here’s what we’re learning through this work:
- Community buy-in is essential: New initiatives should bring in community voices at the very beginning. Our local news initiatives always start with community listening; inviting locals to share what their experience has been with journalism, and what they need from local news.
- Everyone has a role to play: Local business leaders, place-based philanthropists, community advocates, journalists and journalism leaders and policymakers have all contributed valuable support, revenue, perspectives and infrastructure in ensuring the success of new local news organizations.
- Tap shared values: We’ve been able to build a wide tent of local news supporters by helping them understand the connection between local news and major societal issues like democracy, climate, race, health and more.
Diversified revenue streams help newsrooms operate sustainably and independently, alleviating their reliance on a single source of income or revenue. And our grantees are incorporating a variety of strategies for generating revenue regularly. Sahan Journal, for example, leans on its strong relationship with its audience to boost membership revenue and small dollar donations. Through combined advertising and reader revenue, Sahan Journal has raised $600,000 over the last three years. Cityside’s advertiser outreach strategy includes reaching out to local companies that value corporate social good and local nonprofits, and the news organization is approaching a $1 million major giving program. Block Club Chicago has grown its revenue to over $1 million; one of the newsroom’s strategies is including sponsored content in its newsletter.
Our first cohort of grantees will continue to be a part of our network of support and shared learnings. We are thrilled to see these initial results, and excited to support them along their continued growth and success.
The learnings from our first cohort will help us strengthen our support for local news organizations at every stage. We will incorporate them into the evolution of our grantmaking strategy, venture support, day-to-day operations, and share them with others in the local news field. We are encouraged by this initial impact, and inspired by the excellent journalism this work begets. We’re eager to continue making progress towards a ubiquitous and sustainable local news ecosystem.