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February 5, 2016

Rethinking Philanthropy to Support Local News

Lessons from the Local News Lab — Part Five

This is part five of six essays documenting what we have learned about building new networks for local news and fostering more creative, sustainable and community driven journalism. Read part one, part two, part three, and part four.

By Molly de Aguiar and Josh Stearns of the Geraldine R. Dodge Foundation

Rethinking Philanthropy

This project has not only been an experiment with local newsrooms, it has also allowed us to explore new roles for philanthropy, and we have learned a lot about how foundations, particularly community and place-based foundations, can support local news.

Over the past five years we have begun to rethink the barriers to flexible, agile philanthropy, the power of prototyping, smaller experimentation and risk taking, and the importance of being opportunistic.

13 Key Takeaways:

1. Funding Partnerships Strengthen Local News
Our work has been made possible through enormous support, partnership and information sharing from a number of other foundations (Knight, Democracy Fund, Rita Allen, Wyncote, McCormick, Open Society Foundations, and Gates, to name a few). These relationships have not only helped bring much needed resources to local journalists but also have helped guide our strategy and ensure that what we learn here can spread to other foundations and grantees.

2. Support Infrastructure Not Content
We fervently believe that communities and news organizations working together can transform local journalism, and that philanthropy’s most valuable role is to nurture networks, and provide a blend of operating support with experimental dollars. Funding content/beats is not a sustainable approach for news organizations or foundations — philanthropy can’t and won’t pay for journalist salaries indefinitely. Furthermore, funding content exposes both news organizations and foundations to criticism that foundations are deliberately influencing coverage. Instead, philanthropy should try to fund structures and systems that help support a broad array of journalism enterprises that strengthen the overall local news and information ecosystem.


3. The Thin Line Between For Profit and Nonprofit in Local News
While Dodge has provided substantial funding to large public and nonprofit newsrooms serving New Jersey, we also focus much of our attention on the sustainability of very small for-profit hyperlocal newsrooms. We believe local journalism can be a sustainable business, but that philanthropy can play an invaluable role in providing the runway that these “mom and pop” neighborhood newsrooms need to reach a critical mass of support from the community, and stand on their own two feet. These small newsrooms — mission-driven and community-centered — face very similar issues to nonprofits, and are not in it to get rich or return money to investors.

4. Foundations Can Fund For-Profit News
The IRS allows philanthropic foundations to provide grants to for-profit entities that align with the charitable mission of the foundation. More local foundations should consider the way small grants to small newsrooms can help local media adapt to the digital age and develop more sustainable revenue models in order to better serve the community. Philanthropy should understand that an investment in local news is an investment in the whole community, with benefits for a foundation’s entire portfolio of grantees.

5. Philanthropy Needs to Be More Patient
At its heart, this is culture change work and relationship-driven work, which take time and a deep investment in human capital. This work is circuitous and complicated. This is especially true when working with small newsrooms where health issues, community issues and financial issues can unpredictably slow down or derail progress. If we want to ensure that the work is community-grown, not funder-driven, it needs to be tied to the infrastructure and institutions of the community to be sustainable. We still have much to learn about the essential ingredients for a strong and vibrant local news ecosystem in the digital age, and we have to acknowledge that the recipe might keep changing.

Image via Sean MacEntee

6. Philanthropy Can Provide Much More Than Money
At the Dodge Foundation we have a long history of providing in-depth training and technical assistance to our grantees. Through our journalism sustainability work, we have expanded on that idea by providing ongoing coaching, workshops and conferences, and convenings that help facilitate new relationships for our partner sites within communities across New Jersey. By leveraging all the skills and resources of the foundation — and connecting grantees across issue areas — we expand the value of the dollars we provide.

7. Too Much Structure Misses Important Opportunities
Funding innovation in an industry that is undergoing transformation, and supporting ever-evolving civic organizations surfaces how ill-suited philanthropy is to capitalize on time-sensitive opportunities. Typically, the grantmaking process can last for months, with applicants required to submit documentation that takes weeks to complete. Encouraged by the Knight Foundation to take risks and fund experimentation, we focused on lowering the bar of entry by requiring minimal documentation, maintaining an openness to funding mission-driven for-profit ventures, and committing to quick decision-making. Funding decisions that took months now takes weeks or sometimes even just a few days.

8. Philanthropy Is Too Risk Averse
Sometimes making big change means making big bets, and too much of philanthropy is not willing to take those risks. This limits both the kinds of people and the kinds of ideas we seek. Through our Knight partnership, we strive to welcome ideas that might not work, but that could teach us important lessons, and we try to structure grants with opportunities to test, learn, revise and test more.

7512877940_2720e3be12_zImage via Michael Theis

9. Don’t Discount the Power of Small Grants
We continue to be amazed by what entrepreneurial people can do with small grants, particularly when given the encouragement to take risks and test new ideas. Different kinds of ideas require different levels of investments — not every grant needs to be a transformative moonshot to make a real impact in our communities. Small grants to cash-strapped organizations can feel like a windfall and provide the support to take their work to a new level.

10. Redefine Scale
We often hear people in philanthropy looking for projects that can work at scale. This tends to privilege bigger, more established organizations with the staff and resources to replicate projects. We found great value in working with much smaller news organizations, and helping them adapt to the unique context of their community. What we want to do is scale the learning. We know with certainty that there is no one-size-fits-all solution or model in this ever-changing journalism landscape, but we also know that there are distinct attributes of successful local news organizations and some clearly successful strategies for providing philanthropic support to them. Through our writing, presenting and one-on-one advising we’ve been trying to share what is replicable and help people adapt it to their local context. In this way, we are trying to support journalism at a human scale, not an industrial scale, while also sharing what we are learning as broadly as possible.

11. Start-up vs. Bridge Funding
We work with news sites that vary in age from one to seven years and see two very distinct needs in terms of funding. Some sites needed start-up funding to get off the ground and get a strong start. Others needed bridge funding to help them grow from start-up to sustainability, to transform some part of their operations to ensure a strong future. These represent very different challenges for local news organizations and philanthropy can help them both with funding and also with strategy.


Image via Ge.Ne

12. Grants That Buy Something Long Term
Lisa Williams, formerly of the Institute for Nonprofit News, smartly urges news organizations to think of using grants to build their long-term capacity. She puts it this way: “What can a grant from a foundation buy your organization that will help you simultaneously build your organization and reduce your reliance on philanthropic funding?” We tried to build that idea into our grantmaking, helping the organizations we are working with invest in products, programs and people that will ultimately pay for themselves.

13. We Need More Foundations Funding This Work
Across the state and country we need to cultivate new partners and encourage more donors and foundations to support community-driven journalism. Particularly for community and place-based foundations, local news and information is a key component of healthy, thriving communities, and its absence is a key indicator of failing communities. So while many foundations don’t think of themselves as journalism funders, and while journalism historically has not been a charitable endeavor, it’s time for foundations to start valuing and supporting local news as a vital community anchor.

This is part five of six essays documenting what we have learned about building new networks for local news and fostering more creative, sustainable and community driven journalism.
In the final essay, we will share what we’re focusing on for 2016 as well as a full listing of the grants we have made to date.