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Jan. 25, 2010, 3:39 p.m.

How two nonprofits saw the path to sustainability in 2009

It’s annual report time, and our friends Joel Kramer at MinnPost and John Thornton at Texas Tribune each put out their year-in-review posts this afternoon. (Thornton, who launched in November, called it his 12-week report, but whatever.) There’s a lot to consider beyond just numbers.

While each has had to focus on his own shop’s finances in a tight economy, each also has done a service in showing what a path to sustainability looks like — the hard work of building an advertising base, corporate sponsorships and grassroots support.

Just as importantly, each has explained his publication’s progress in a way that funders and readers can understand. There’s a lot of confusion and misunderstanding out there, but Joel and John show how the nonprofit model is well suited to foster the kind of financial stability and support for newsrooms that we once took for granted at newspapers.

Thornton, a venture capitalist, put it this way:

You may be thinking: “A business? I thought the Tribune was a non-profit.” True enough. But we must behave like a business if we hope to achieve our mission of maximizing the public good we produce. … We will continue to seek large contributions from wealthy families and foundations, but the right way to think of this is truly as equity capital rather than revenue. In that sense, we’re no different than a startup that my firm would fund. Such a venture seeks to raise enough equity capital to sustain it until its revenue and expense lines cross. The more we raise, the longer we have to establish a sustainable business model.

Kramer offered a similar view in his post:

[We] generated a substantial increase in our revenues, a truly impressive result in light of economic conditions:

— Revenue from advertising and sponsorship rose from $160,000 in 2008 to $217,000 in 2009.

— Revenue from individual donors and from MinnRoast rose from $356,000 to $458,000. (This excludes from the 2008 total the last payment on one of our 2007 founder gifts.)

These two revenue streams are the key to long-term sustainability. Based on these results, I am confident that we can fulfill our goal to be sustainable by 2012, relying on foundation grants only for special projects but not to keep the lights on.

In his book, Leading Quietly, Joseph Badaracco makes the case that leadership is made of “patient, unglamorous, everyday efforts.” And leaders, he writes, “don’t spearhead ethical crusades. They move patiently, carefully, and incrementally. They do what is right — for their organizations, for the people around them, and for themselves — inconspicuously and without casualties.”

This is the kind of leadership that Kramer and Thornton are showing.

POSTED     Jan. 25, 2010, 3:39 p.m.
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