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Jan. 13, 2017, 11:22 a.m.
Business Models

After 5 years, San Antonio’s Rivard Report finds that being a nonprofit is better than being a “no-profit”

“To recreate it would have been prohibitively expensive for even the most generous philanthropic organization.”

By 2015, four years after it was conceived, the Rivard Report was at a crossroads. The San Antonio news site — founded by Robert Rivard, who spent 14 years as the top editor of the San Antonio Express-News, and his wife Monika Maeckle — was looking to grow and to provide more local coverage of public health, education, and arts and culture. But its advertising- and sponsorship-based business model wasn’t really working.

“It was enough to pay my advertising director, my photo editor, and my one reporter, but it wasn’t enough to pay myself, and certainly it wasn’t enough to go out and grow,” said Rivard, who began planning the site in late 2011 and first published in February 2012.

“After three or four years, I used to joke with people that we were a ‘no-profit.’ We weren’t in the red, but we weren’t in the black either. We were constantly taking money as it came in and paying it out as quickly as we got it.”

Rivard sought out potential investors among his contacts in San Antonio, but he wasn’t able to attract interest because the Rivard Report would never have been able to generate the level of traffic it needed to sustain an advertising-based business.

“I didn’t see an exit strategy,” said John “Chico” Newman, Jr., one of the people Rivard approached. Instead, many Newman and others suggested that the Report become a nonprofit.

In late 2015, the Rivard Report completed the transition to 501(c)3 status. Since then, the site has been able to grow its staff, increase its coverage, and attract new sources of funding.

“If he didn’t [go nonprofit], he was probably going to burn out, and then San Antonio would lose the Rivard Report,” said Newman, who is now vice chairman of the Rivard Report board. (Newman is also a supporter of other nonprofit news organizations, including the Center for Public Integrity, the International Consortium of Investigative Journalists, and The Texas Tribune.) “To recreate it would have been prohibitively expensive for even the most generous philanthropic organization. These things are hard to start. They’re hard to keep going, but they’re really hard to start.”

The Rivard Report now has annual revenue of about $1 million, Rivard said, but needs to reach $2 million to be truly sustainable. In 2016, foundation and philanthropic support accounted for about 40 percent of the site’s income, advertising for another 40 percent, and membership for 20 percent.

Rivard locked down three-year commitments for annual donations of $100,000 from Newman and his wife Ann through the John and Florence Newman Foundation and from Charles Butt, the owner of the San Antonio-based H-E-B grocery store chain. (H-E-B is Rivard Report’s largest advertiser as well.) Support is also coming from a number of other local foundations; Rivard said he hasn’t “quite cracked the code” on national foundation money yet.

Rivard sees membership as the key to the site’s long-term stability. The site signed up about 1,000 members (defined simply as people who make some donation) in its first year as a nonprofit and hired a membership coordinator last year; it’s already held some membership events and plans more, including salon-type gatherings with city leaders.

The Rivard Report isn’t alone in turning to a nonprofit model. The Philadelphia Inquirer, Daily News, and Philly.com are now owned by a nonprofit. Last year, Honolulu Civil Beat, the site founded by Pierre Omidyar, also transitioned to a nonprofit model.

Rivard and his team look toward nonprofit stalwarts such as Voice of San Diego, MinnPost, and The Texas Tribune for guidance and inspiration.

“The Texas Tribune has been incredibly generous — not only in their sharing of methods and lessons learned, but they share their content completely free,” said Katy Flato, the executive director of the San Antonio Book Festival and a board member for both The Texas Tribune and the Rivard Report. “That has been very helpful to the Rivard Report for a bigger spread of subject matter and relevancy.”

While the Tribune’s reporting enables the Report to cover what’s happening in Austin, the site has been staffing up to expand its coverage in San Antonio.

The Report has a staff of 10 full-time and regular contractors, as well as a larger stable of freelancers. Rivard is looking to hire reporters to cover public health, arts and culture, and business and technology; ultimately, he’d like to have a staff of 15 to 20 people, with three or four of those individuals working on the business side. In 2016, the Report published about 3,000 stories, up from 1,800 in 2015.

Spanish is the primary language spoken at home in 40.5 percent of San Antonio households, according to the U.S. census bureau. The Rivard Report has published some Spanish-language coverage, but Rivard said he’d like to see more of the site’s reporting in Spanish as well.

“For those of us of a certain age, newspapers were part of our every day, and that’s what got us into this business. We’d like to see them survive, but we recognize that they’ll never be what they once were,” Rivard said. Nowadays, “people want niche. It’s a model that fits its time and place — who knows where we’ll be five years from now.”

Photo by Nan Palmero used under a Creative Commons license.

POSTED     Jan. 13, 2017, 11:22 a.m.
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