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Oct. 1, 2019, 9:19 a.m.
Business Models

“So where are we?”: A McClatchy newspaper is raising hundreds of thousands of dollars to support its education reporting

“Asking people to support the Bee via digital subscription can be a path for us. However, that path is long. This effort can help serve as a bridge.”

Local philanthropy dollars are seeping into local journalism — even into commercial outlets, operating in the traditional market where advertising has dropped so quickly that subscriptions can’t yet (if ever) catch up.

Your friendly, neighborly rich people are interested, though. Journalism philanthropy has quadrupled in the past ten years, according to recent nonprofit media reports, and 40 percent of revenue for news nonprofits comes from individuals and families. The commercial news space, starting with independent major metro newspapers and now spreading into the corporate chains, wants a piece of that action.

The Seattle Times was one of the first to significantly supplement its reporting budget using philanthropic dollars. Led by Sharon Chan, the Times worked with a local foundation to raise and shepherd $5 million for specific reporting projects. (Chan is now at The New York Times to perform a similar feat on a larger scale.) The Boston Globe recently built up an education investigative reporting team with a $600,000 grant from a local foundation here.

But can chain newspapers pull off the same trick that’s worked at locally owned papers in Seattle and Boston?

McClatchy is trying, following the playbook of building relationships with local philanthropists (and a local foundation to coordinate the tax-tricky donations) in order to support quality journalism that needs an extra financial boost. An early test: California’s Fresno Bee.

McClatchy — with outlets in 30 markets including Miami, Charlotte, Kansas City, and Fort Worth — faces the same challenges as any newspaper company these days: Its advertising revenue continues to fall (down 20 percent in Q2) and it has emphasized digital subscriptions. (It has 185,500 — up more than 50 percent year over year, but still not a giant number for 30 markets.) While McClatchy tries to suss out what might work locally — some Google News Initiative money is supporting an experimental trio of new sites, and CEO Craig Forman is still expecting “greater digital advertising revenues in the future” — there’s a newfound opportunity in The Fresno Bee’s local philanthropic community, focusing on education journalism.

“As you look at the fundamental challenges the news industry faces, as you hear the big sigh in my voice, our traditional advertising model is challenged. Certainly the print model is challenged,” Lauren Gustus, McClatchy regional editor, said. “We know that by doing work the community values, we can find a way forward. Asking people to support the Bee via digital subscription can be a path for us. However, that path is long. This effort can help serve as a bridge.”

This project comes with a $600,000 price tag for four journalists (some of whom must be fluent in Spanish) over two years. The Bee has already raised $246,000, from the Central Valley Community Foundation, the California Endowment, and various wealthy Fresno folks. It isn’t just a stopgap, though: The methods outlined in the plan for the money would be a pretty rapid adoption of best practices for audience engagement, transparency, and community relationships. Here’s how the Bee outlined the project with the Central Valley Community Foundation:

The goal is to create a broad conversation among parents, students, teachers and others in Fresno and the central San Joaquin Valley. We will do this by providing essential, solutions-oriented journalism and regular opportunities to engage.

This goal will be met by:

  1. 1 weekly enterprise story with video and photos that build understanding of the challenges, successes and opportunities in our education communities.
  2. 2–4 daily stories per week that leverage data, offer high-utility news or let readers know how they can engage over the same timeframe.
  3. Potential publication across McClatchy’s five California news organizations — Fresno, Sacramento, Merced, Modesto and San Luis Obispo.
  4. Regular in-person listening sessions.
  5. A quarterly webinar, where we’ll share what we’re working on, what’s worked and input on the issues we should cover next.
  6. Public events in Fresno to put the spotlight on this topic at least once a year.

“Our goal is to flip the script. How do we change the trajectory and quicken the pace of advancement in educational outcomes? We do it by working together,” Fresno Bee executive editor Joe Kieta said in a video announcing the initiative.

This is part of a broader fund with the community foundation, which is led by former Fresno mayor Ashley Swearengin. (It would be reasonable to assume that there are similar projects and partnerships in other McClatchy markets coming, I’m told.) The Fresno Bee is one of dozens of McClatchy outlets, but had the best — well, most unique — opportunity to pilot this method in the central region of California.

“We started to have the conversation with other community foundations in other communities that McClatchy serves,” Gustus said. “The community foundations want to make impact and if there’s an entity that’s going to work with them to make impact and to raise money to make an impact, generally that’s positive for both of them.”

The Bee also has the wild card of having its high-profile congressman suing the outlet (and a Twitter cow). Republican Devin Nunes, who has played a significant supporting role in various elements of the Trump-Russia investigation, filed a defamation lawsuit against McClatchy in April over an article mentioning others’ certain party behavior involving a winery he has invested in. He’s been outspoken about his hometown paper before, saying that the Bee works with “radical left-wing groups” to advance “fake news”.

The situation has placed quite a spotlight on the news outlet, but it’s also given the Bee an opportunity to draw financial contributions from supporters beyond a subscription or advertisement. “There are many people who read about The Fresno Bee’s coverage of Devin Nunes and wanted to help,” Gustus said. “Previously we didn’t have an outlet for those people. Now we do. That’s big — it reframes our relationship with the community.”

High-profile lawsuits, whether with news outlets or fake cows, don’t happen in every community. But this shift from a purely commercial transaction to one with philanthropy on the financial sidelines presents a new mindset for the company overall.

“We have an opportunity to engage our communities in a new relationship which ultimately can lead to a new model for local journalism,” she added. “I think that local communities are more prepared than ever to have that conversation with us. So where are we?”

Screenshot taken from the video announcing The Fresno Bee’s lab

POSTED     Oct. 1, 2019, 9:19 a.m.
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