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June 5, 2017, 12:38 p.m.
Business Models

The Lenfest Institute’s new local news grant program will take lessons from venture capital

Built around a “venture philanthropy” model, the new programs will offer both significant funding and the test kitchen of its Philadelphia daily newspapers.

The news world has taken many lessons from tech companies. Philly’s Lenfest Institute thinks the industry can learn some things from venture capital as well.

The nonprofit organization, which owns Philadelphia’s two big daily newspapers and Philly.com, is putting up $1 million to fund new efforts in local news innovation. One set of grants will focus on efforts to bring new innovations to news in Philadelphia and metropolitan markets like it. Meanwhile, its entrepreneur-in-residence program, modeled after those at venture capital firms, will let experts in marketing, business development, and design work on projects that align with the Lenfest Institute’s mission.

The Lenfest Institute is looking for applicants with new ideas about reporting, presentation, distribution, and audience engagement. On the business side, it’s interested in new revenue sources and other ways to bring more sustainability to local news. (The fund is a separate effort from the Lenfest Institute’s $5 million collaboration with the Knight Foundation, which is focused on helping newspapers navigate the print-to-digital transition.)

Jim Friedlich, the institute’s executive director, said that what sets the project apart from other journalism grants is its “laser focus on practical, real world business challenges and solutions.” Lenfest is modeling the effort in part on startup incubators and venture capital funds. This “venture philanthropy” model, as he wrote about about for Nieman Lab in December, is designed to be more hands-on and entrepreneurial than the typical grant program:

I say venture philanthropy because smart money is approaching investment in public-interest journalism with the mindset of venture investors. The Democracy Fund, the Gates Foundation, the Emerson Collective, and other philanthropies with financial roots in software and technology view their investments much as do venture capitalists, with rigor and expectation for meaningful returns. In distinction to classic venture investing, the currency of venture philanthropy in journalism is not cash but deep, fact-based reporting, measurable audience engagement, meaningful policy and social impact, and the development of new business models that sustain great journalism and civic engagement. These returns on civic investment will be more valued and more valuable in 2017 than ever before. When the value of investment returns increase, so too does invested capital.

Another factor that sets the new program apart, Friedlich said, is the program’s connection with the Lenfest Institute’s newspapers, which open up new opportunities to try out experiments on existing media properties. “That may be the most unique part of this,” he said. “We’re located within a major city newsroom with 250 reporters, a site with 7 to 8 million unique visitors per month, and have needs for ad tech innovation and subscription experimentation. It’s a wonderful test kitchen in which to cook up new ideas.”

The Lenfest Institute doesn’t have any quotas for how many projects it will fund overall. It could, for example, fund twenty $50,000 grants or ten $100,000 grants, depending on the quality and quantity of applications. “We wanted to leave ourselves flexibility to mix and match funds and opportunities,” said Friedlich.

Photo of Philadelphia by Peter Miller used under a Creative Commons license.

POSTED     June 5, 2017, 12:38 p.m.
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