16 Nonprofit Model Development
Jake Batsell
An earlier version of this chapter was published as “Earning Their Keep: Revenue Strategies From The Texas Tribune and Other Nonprofit News Startups,”[1] Knight Foundation, April 2015. The author has updated the current version with new information while editing for content and focus. It is republished here with permission and gratitude to the Knight Foundation.
The rise of digital media in the new millennium has triggered an irreversible plunge in print advertising revenues. Consequently, the newspaper industry is shedding jobs. By mid-2016, the American newspaper workforce alone had lost about 20,000 jobs[2] over the previous 20 years, and most in the industry expect that trend will continue. With ad-supported mass media mired in what seems to be a permanent cycle of disruption, a growing number of journalists have shifted their career path toward nonprofit news, a realm that traditionally has depended on more altruistic forms of funding such as memberships and philanthropic donations.
The Institute for Nonprofit News,[3] founded in 2009 by 27 investigative news organizations, had grown to more than 120 members by mid-2017. And in the aftermath of the 2016 U.S. presidential election, the nonprofit news sector—a category that includes public radio and television stations, established investigative newsrooms, and newer startups covering a specialized topic or region—saw an unprecedented surge in donations[4] from readers and foundations hungry for independent watchdog journalism. In March 2017, The Center for Investigative Reporting, the Center for Public Integrity and ProPublica each received $3 million in grants from the Democracy Fund and First Look Media, prompting Inside Philanthropy to proclaim in a blog post headline: “It’s Official: Donald Trump is the Best Thing That’s Ever Happened to Nonprofit Journalism.”[5]
Seven-figure grants can pay for plenty of accountability journalism, but news nonprofits can’t pin their long-term survival on big checks from foundations. The term “nonprofit” generally means that an organization exists to fulfill some sort of social purpose, not to make money for corporate owners. But the bills still need to be paid. If you talk business strategy with any of the civic-minded entrepreneurs who run news nonprofits, you’ll quickly hear a common theme: “nonprofit” is not, by itself, a business model—it’s simply a tax status. Yes, once they clear a lengthy review by the Internal Revenue Service,[6] nonprofit news organizations benefit from 501(c)(3) status, which exempts them from certain taxes and enables them to collect charitable donations. Still, tax-exempt status brings no automatic guarantee of financial success. To stay afloat, today’s news nonprofits must constantly seek revenue from a diverse array of sources including corporate sponsorships, events, subscriptions, and crowdfunding while also cultivating new members and philanthropic donations.
This chapter will ex