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July 24, 2019, 10:22 a.m.

So how will the American Journalism Project pick the local news sites it wants to back (with a piece of its $42 million)?

“What’s happened with a lot of these local [news sites] — and rightfully so — is that they’ve been really focused on building out editorial functions. But oftentimes, these news organizations aren’t started by people that have business or entrepreneurship backgrounds, so that’s been lacking in this space.”

Editor’s note: Atlantic Media publishes a weekly newsletter called The Idea about “everything new and innovative in the media industry.” It recently featured a Q&A with Anna Nirmala, who is director of portfolio development for the American Journalism Project, an important and comparatively large-scale effort to use venture philanthropy to catalyze a new generation of local digital news startups. (We’ve written about it before.)

One of the key questions — perhaps the key question — for the AJP is how it will select the local news sites it backs. (It calls them “civic news organizations,” or CNOs.) What criteria will the AJP use to decide who gets a piece of the $42 million in investment capital it’s raised so far?

The project has laid out some guidelines, which some have seen as rather rigorous: It has a “very strong preference” for nonprofit news orgs; “the core product” must not be behind a paywall; outlets must have “at least two years of funding in place or committed” from sources other than the AJP. It also prefers sites that already have shown “demonstrated, committed support from local philanthropy” and which have leaders with non-media business experience.

Nirmala plays a big part in that process. She most recently worked at the audience-powered journalism startup Hearken, but before that she worked in consulting and strategy in the non-media world. Here’s an expanded version of the Q&A with her. And if you think your news organization could be a good fit for the AJP, you can start by filling out this form here.

Meena Lee: What is the American Journalism Project?

Anna Nirmala: We are the first-ever venture philanthropy organization that’s dedicated to local news. We’ll be making direct grants to civic news organizations (CNOs), this ecosystem of news organizations that deeply believe in access to civic information [topics like government, environment, education, social, criminal justice, public health] as a public service in and of itself.

If you think of a venture capital firm, we operate similarly except we are philanthropy, so we don’t expect returns on our grants. But we will provide support to these CNOs specifically in the areas around revenue generation and increasing capacity in that space, and overall entrepreneurship.

We’re really interested in local CNO leaders who are social entrepreneurs who share a belief in the mission. Then we can help provide and grow sustainability metrics and measures so that they can not be so concerned every year whether they’re going to have enough funds to be around. We would help provide the funds for headcount for revenue-generating capacity, and our belief is, within a couple of years, those business hires will be bringing in multiples of their headcount, which can then fund the news-gathering side.

So we are really, really interested in increasing spend available for local CNOs, and with that, growing the number of economically-sustainable models that exist.

Lee: To make sure we’re understanding this correctly, there is an expectation that within a couple of years of funding, the grantees will be able to sustain themselves on their own?

Nirmala: Yes, exactly. What’s happened with a lot of these local CNOs — and rightfully so — is that they’ve been really focused on building out editorial functions. But oftentimes, these news organizations aren’t started by people that have business or entrepreneurship backgrounds, so that’s been lacking in this space.

And because sometimes, these hires are a bit more expensive than what these newsrooms can afford, we believe that we can help offset those costs and bring in that talent and help them grow that talent, so that they can focus on the things that they are well versed at and good at.

Lee: Sustainability — or the ability of a local news organization to fund themselves — seems to be something that many haven’t quite yet figured out. How do think the business talent that you bring in will be able to change this?

Nirmala: We’re really encouraged by the success of our founders’ organizations, The Texas Tribune and Chalkbeat, that were able to think about diverse revenue streams from the get-go. [The AJP’s founders are Chalkbeat’s Elizabeth Green and the Trib’s John Thornton.]

Of course, it will be different for every CNO, depending on their market, but overall we believe that revenue can come from three different areas:

  • Philanthropy. We’re really interested in making sure that they are sustained by their local philanthropic organizations.
  • Audience revenues — perhaps a membership program, donors, things like that. And then
  • Commercial sponsorship and strategies from the commercial space — working with local businesses or people that might want to get in front of their readers, while, of course, never compromising the editorial product.

Nonprofit models are what we’re most interested in — and independent organizations that aren’t out to make a profit — because we believe that news is a public good.

Lee: Can you tell us more about your role in the organization?

Nirmala: We have just been around for a couple of months. I’m privileged to be a part of the founding team.

As director of portfolio development, I’m responsible for leading the building of our pipeline and funnel and ultimately the portfolio of grantees. This means everything from understanding the local CNO ecosystem to having conversations with CNOs that might be ready for transformative growth, to building systems and processes to support all of these efforts so that we can make sure, as a super-lean team, we’re being as efficient and equitable as possible.

Our funders have done a great job of raising a tremendous amount of money, and now we’re focused on figuring out who can make the best use of these funds so that their organizations can grow and be sustainable.

Lee: One of your seven funding criteria is that the grantee be committed to “offer[ing] a core product free to all.” Does this mean no paywalls?

Nirmala: Yeah. It’s something that we are constantly in dialogue and thinking about, but something that we believe is really important is making sure that news is not just for those that can afford it, but for all citizens of all economic backgrounds.

We understand that there are organizations out there that are doing great work and have a paywall. But for the time being, we believe that [for our grantees] things shouldn’t exist behind the paywall, but that they can think more about membership or what public media has done, where you can be a member, and you understand that you are donating money because you believe in the mission of the organization and that that money then also enables other people that can’t afford to pay for news to be able to access it.

Lee: How many grantees will be in your first class and when will that cohort launch?

Nirmala: We’re still figuring out the specific numbers, but we have invited our first set of proposals and we’ll be evaluating those proposals this summer and conducting due diligence. We hope to make our first set of grants at the end of the year. I would say it could range anywhere from four to eight grants, because we’re very cautious of giving out too much money too quickly while we’re still building and figuring things out. The big part of what we’re going to do is supporting these civic news organizations, so as a small team, we want to make sure we’re really giving the attention that these organizations deserve.

We’re expecting with this first fund to support 25 to 35 civic news organizations [in total], and we want to make sure that that happens as quickly as possible. We’ve just recently made two new hires and increased our capacity there, so we’re excited to get the support started and to continue making grants [on a quarterly basis].

Lee: What are some of the biggest challenges that you’ve encountered so far?

Nirmala: I think we really benefit from having a team that’s well versed in startup culture, so we’re all really comfortable with ambiguity and understand that things change day-to-day and that we need to be open-minded and flexible so that as we learn, we can iterate and evolve and grow.

I think the biggest challenges have also been the most fun parts of just building something from scratch. So like figuring out our internal systems and templates and what tools we want to use. Our leaders have done a really great job of building an initial board — what does governance look like? Building a pipeline and a funnel has been an incredible challenge of making sure that we know everyone that’s out there. (Of course, there are probably people that we don’t know yet.)

I think for me personally, another big challenge is just understanding how insular this industry can be. Especially when we talk about diversity, equity, and inclusion [commitment to which is another ask of potential grantees], I think one of the biggest challenges is the fact that there are very, very few leaders of color in this space. We want to figure out what our role is to encourage those that do exist and support them, but also there’s just so much opportunity I think for people to step into this space and to really push journalism, especially local journalism, in the direction that it needs to go to be truly representative of all the communities and people that exist in these local areas.

So that’s been an incredible challenge of: We set these criteria and we have this rubric, and now understanding, okay, where are the gaps, and what’s our responsibility to help build this space?

Lee: What is the most interesting thing that you’ve seen recently in local news?

Nirmala: I’ve been really encouraged to learn more about NewsMatch and to see the impact that it has had all over the country. It’s a national matching-gift campaign that grows fundraising capacity in nonprofit newsrooms and encourages giving to journalism among donors all across the United States. What it does is it aggregates gifts from local and national funders to match small-dollar donations to nonprofit newsrooms. I’ve seen firsthand that for these really small resource-strapped orgs, the impact has been tremendous.

Last year, NewsMatch became the largest-ever grassroots fundraising campaign for nonprofit news, raising more than $7.6 million, which was a record-breaking year for charitable giving to journalism. So that’s been really amazing to see.

POSTED     July 24, 2019, 10:22 a.m.
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