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June 17, 2020

The numbers behind nonprofit news: 250 outlets, 60% reporting locally, millions of people served

Erin Gorton works at the InvestigativePost newsroom in western New York. Photo courtesy INN.

In a year marked by the upheaval of so many norms, the growth of nonprofit journalism continues to point to a strengthening sector for local news outlets. Data from two major assessments of the field shows a meaningful increase in not only nonprofit newsrooms but also increased community support for these essential services.

The coronavirus pandemic has seized the stalling of mainstream news organizations that were trying to navigate beyond their advertising- and subscription-based histories:

  • More than 36,000 journalism jobs have either disappeared, witnessed pay cuts, or been placed on furlough between March and May 1. 
  • Many of these outlets have also faced legacies of under-serving communities of color and have struggled to reckon with the future audience and business models for journalism. 
  • These issues were made even more salient by the national movement for racial justice that has gripped communities and newsrooms in the past few weeks. 

At the same time, news outlets with a 501(c)(3) tax status are not immune to the pressures brought on by the pandemic. Many of them also have real work to do to better reflect their communities. But the vitalness of community supported, locally grown news outlets has only intensified, with more than 30 states declaring journalism to be an essential service since the start of the pandemic.

Local Nonprofit Newsrooms Are Growing

The Institute for Nonprofit News counts around 250 news outlets in its membership, of which 62 percent focus on local and state reporting, according to the 2020 INN Index. “It is clear that local reporting is a growth area. More than one-third of the outlets are local, up from one-fourth three years ago,” the Index’s researchers, Michele McLellan and Jesse Holcomb, note. 

The majority of nonprofit news outlets are still small, with a median of six full time employees per newsroom, but these outlets are growing their distribution across revenue streams to strengthen the newsroom for the long run. In particular, local news organizations have a more balanced revenue mix than outlets covering the U.S. or internationally: One-third of local news outlets’ revenue comes from foundation grants, 40% comes from individual giving, and around 25% comes from earned revenue. 

“The overall composition of the field is likely to shift from large, specialized reporting and investigative shops — which will continue to dominate in size and revenue but make up a smaller slice of the whole by number — toward more local news, and local/national partnerships and collaborations,” McLellan and Holcomb write. “This trend means that requests for donors to support news will multiply in many states and communities.”

Collaborative Campaigns Strengthen Small Newsrooms

But many of these outlets are able to learn and grow through NewsMatch, a collaborative fundraising vessel that works with INN and the News Revenue Hub to train outlets throughout the year on best practices for nonprofit news appeals and matches end-of-year donations from individuals with a pool of support from funders. 

In 2019 alone, participants in NewsMatch were able to take an initial $3.37 million in funder commitments and emerge two months later with deeper community ties through a total of $43.5 million raised from individual supporters, the results from the NewsMatch 2019 campaign show. That’s a nearly 1,200 percent return on the philanthropic investments, while local funders’ matching gifts during NewsMatch 2019 more than doubled compared to previous years. In addition, the number of donors grew from nearly 360,000 donors in 2018 to nearly 55,000 in 2019, while individual donors increased by 26 percent. Community support was growing even before COVID-19 hit.

While newsrooms received the money donated by individuals immediately, the matched funds arrived in March — right as the pandemic was ramping up in the U.S. The NewsMatch partners came back in full force to run a campaign alongside Giving Tuesday Now in early May, raising $1.14 million from thousands of donors for 106 participating newsrooms in three days. (Some nonprofit newsrooms, like inewsource in San Diego, even ran their own COVID-19-compelled fundraising campaigns.) “It was really great to have the infrastructure [from NewsMatch] all turned on for this special initiative,” one Giving Tuesday Now newsroom participant shared. “It really helped focus our spring.”

Now, heading into a summer of COVID-19 coverage and continued calls for police reform and a dismantling of systemic racism, and eyeing the elections of the fall, nonprofit newsrooms are poised to connect with their communities better than ever. By setting up the infrastructure to build these relationships not only with their donors but also across the field, these news organizations — small but mighty — are equipped not just for NewsMatch 2020 but also for their future.

Other findings from the 2020 INN Index, as noted by McLellan and Holcomb: 
  • The decrease in reliance on foundations continues: “Foundations accounted for one-third of [the local nonprofit newsrooms’] funding (33%) and individual giving adds another 40% to the total revenue pot for local nonprofits.”
    • Note: This continues the trend of increasing individual giving over foundation support from the 2019 Index, where foundations comprised 43% of the total revenue of nonprofit newsrooms and individuals supplied 39%. 2018 marked the first time that philanthropic funding was less than 50%.
  • Proportion is important: “While the local nonprofits make up more than one-third of nonprofit news outlets, they account for only one-tenth (12%) of total revenue for the nonprofit news field.”
  • Reporting is still a focus: “On average, they spend most of their budgets (61%) on editorial personnel and activities, 18% on revenue generation and the rest on administrative and tech expenses.”
  • Collaboration builds community: “Seven in 10 reach at least a portion of their audience by allowing their work to be published by third-party publications.”
  • Journalists of colors are becoming nonprofit news entrepreneurs: “A growing group of local outlets serve communities of color, covering issues that sometimes don’t attract other media attention at the local level. These include Flint Beat, MLK50, Outlier Media and City Bureau.”

Interested in supporting NewsMatch 2020? Contact us at localnewslab@democracyfund.org

Interested in participating in NewsMatch 2020 as a newsroom? See more information here.

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