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Feb. 11, 2016, 10:04 a.m.
Business Models
LINK:  ➚   |   Posted by: Joseph Lichterman   |   February 11, 2016

In June 2014, the Geraldine R. Dodge Foundation launched the Local News Lab, an initiative in New Jersey to help local news sites develop new and sustainable business models. Supported by a $2 million grant from the Knight Foundation (disclosure: Knight also supports Nieman Lab), it has worked with a handful of local outlets in the Garden State.

This week, the Local News Lab is out with a new report — written by Molly de Aguiar, Dodge’s director of informed communities, and Josh Stearns, Dodge’s director of journalism and sustainability — that looks back on the lessons it’s learned over its first 18 months. The report focuses on a number of overarching questions that are broken up into chapters that examine how local outlets can experiment with new revenue models, engage their communities, and create a more sustainable news ecosystem. The report features case studies and examples of best practices that are worth checking out in full.

Another chapter is focused on how foundations can continue to support journalism. “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,” de Aguiar and Stearns wrote.

As the business model for local news has floundered, many outlets, especially nonprofits, have turned to philanthropic support. The ways foundations can support journalism has become a topic at the forefront of many conversations of late as last month H.F. “Gerry” Lenfest decided to donate Philadelphia’s newspapers to a nonprofit.

The situation in Philadelphia shows that the difference between for-profit and nonprofit journalism can be small, and foundations should focus on supporting both types of newsrooms, especially when working with small hyperlocal sites like Dodge is doing:

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.

And when foundations do decide to support news organization, de Aguiar and Stearns recommend that they focus on supporting operations and infrastructure, not specific beats. The report outlines several ways to do this, including through training and technical support, but the report emphasizes that funding content isn’t always in the best long-term interest of the organizations. Foundations should be looking at ways to make grants — even small ones, which can be immensely helpful to tiny outlets — that help the news organizations build toward a sustainable future:

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.

The report also stresses that foundations need to make it simpler for organizations to apply for support. With so much changing in the world of media, news organizations often can’t often go through time-consuming applications. As a result, Dodge says it has sped up its processes. “Funding decisions that took months now takes weeks or sometimes even just a few days.” Similarly, the report recommends that foundations be open to taking more risks by funding “ideas that might not work, but that could teach us important lessons.”

Many foundations, when funding journalism projects, look to support projects that can be scaled and replicated elsewhere. The report cautions that this approach can overlook smaller local organizations. Throughout the report, De Aguiar and Stearns stress the capacity for foundations to help rethink and support community news while also creating networks for outlets to share and learn from one another:

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.

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