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Patterns in philanthropy leave small newsrooms behind. Can that change?

“All of these are choices that funders make, and they could choose differently if they wanted to.”

This is Part II of a two-part series, “‘Haves and have-nots’ in nonprofit news? The view from small news outlets.” You can find Part I here.

Before helping found the nonprofit Sierra Nevada Ally in 2020, Joe McCarthy had lived many lives — from serving in the Army, to running an arts center, to working as education director for the Nevada State Prison. At both the arts center and the Ally, where he’s publisher and chief revenue officer, McCarthy has had to navigate the challenges of fundraising. In his experience, raising money for the arts is “a lot easier than raising money for journalism.”

“There are so many causes that attract people before they get to news,” agreed Adam Gillitt, publisher of the Alameda Post in California. “People are used to getting news for free. And a lot of people don’t see what the value in investing in local news is until it’s gone.”

In the world of nonprofit news, it’s common knowledge that securing the funding to survive is an uphill battle. But the 32 nonprofit newsrooms that have joined the Alliance of Nonprofit News Outlets (ANNO) since last August, mostly comprising small, local newsrooms like the Ally and the Post, say that on top of that general difficulty, specific patterns in the way foundation funding is distributed disproportionately disadvantage their outlets.

“A lot of the large donor money doesn’t trickle down to small organizations like ours, because we’re just so small,” Gillitt said. The Post, for instance, brought in “a little over $100,000” last year, he told me (about double its revenue in 2022, the publication’s first full year of operation), and spent about $80,000. On that budget, “we are not able to fully fund all of our activities or pay salaries yet,” Gillitt said.

ANNO news outlets, as reported in the first part of this series, are advocating for foundations to distribute more unrestricted operating funding directly to newsrooms like theirs, as well as encouraging more overall funding from the philanthropic sector for nonprofit journalism in a similar spirit to the national Press Forward coalition (though Press Forward focuses on for-profit, public, and nonprofit local news alike). These publishers argue that newsrooms like theirs need, and deserve, more such direct funding to “help ensure that more of us survive for years to come.”

The members of this alliance represent a small sample of the brisk growth in nonprofit news outlets over the past several years — especially on the local level — and ANNO’s advocacy is one of the latest additions to an industry-wide conversation about how nonprofit newsrooms can, individually, survive, and collectively, thrive enough to offer a sustainable solution to the country’s local news crisis.

Last summer (before ANNO was officially formed), Marty Baron, former executive editor of The Washington Post, commented in an interview that news nonprofits “are not immune from business considerations” and stressed that they “can’t just be the damsel in distress all the time, saying, ‘Please help us help us. We’re beautiful. We’re wonderful. Come to our rescue.’” (Baron now sits on the board of the Knight Foundation, one of the largest journalism funders.)

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Many of the smallest nonprofit newsrooms, like the Ally and the Post, don’t come across as damsels in distress. The eight journalists who spoke with me for this series describe themselves more like under-resourced foot soldiers trying to do twice or three times the reasonable workload of one person while constantly fighting for financial survival.

These outlets’ reporters and publishers share a dedication to telling stories that nobody else is covering — stories like the ones recognized in The New York Times’ list of local journalism worth reading from 2023, which featured reporting from at least seven current ANNO members. The Post’s featured story, for instance, provided explanatory reporting about how multiple drawbridges connecting Alameda to the mainland got stuck open during a power outage, and broke down the work “bridgetenders” do to keep them operating. EcoRI, meanwhile, was recognized for a charming story about how 10-year-old Silas Claypool and his dad discovered a species of mushroom “never before seen in R.I.” while exploring a local bike path.

The New York Times’ list, which included about 100 local news stories from local news outlets around the country, provides a tiny sample of the kind of work news outlets like ANNO members are doing. When I talked with McCarthy in November, he brought up one of the Ally’s stories he was most proud of twice — a deep dive (completed in partnership with the Institute for Nonprofit News’ Rural News Network) documenting how regional tribes were not properly consulted by the government about a lithium mining project.

The people behind these news outlets believe deeply in their work; they’re also stretched very thin. McCarthy described two of his reporters to me — one who specializes in environmental deep dives, the other an Apache photojournalist who worked on the lithium mining story. What haunts McCarthy, he told me, is, “I’ve got to be able to pay these people better. They deserve to be paid for the quality of the work…they shouldn’t be out there scrambling around, working for three or four or five different entities, trying to put together a living wage, which they still are unable to.”

For 2023, the Ally’s annual revenue fell to just $32,500, McCarthy said. The publication’s annual budget goal for 2024 is $150,000. McCarthy, and executive editor Noah Glick, are both unpaid (and on top of his publisher and chief revenue officer hats, McCarthy currently works as the outlet’s interim managing editor). The Ally paid freelancers about $300 per story in 2023; its 2024 budget “raises that amount to $500 per story.”

Unfortunately, it’s not at all uncommon to do staggering amounts of work for little to no pay in the nonprofit local news world.

Dana Amihere, the founder and executive director of ANNO member AfroLA, told me that running the news outlet is “hands down, the hardest job I’ve ever had in my life.”

“I have worked more, and longer, and more diligently than I have on anything else in my entire life,” she told me. Amihere has done that work as a volunteer for almost two years, out of commitment to the work — and, especially, to the many current and former community college students she mentors at AfroLA as freelancers. (“I’m more of a den mother than an editor,” she quipped.) Amihere simultaneously maintains a full-time freelance career, and teaches, to pay the bills.

At the Alameda Post, “I am one guy,” Gillitt told me. But, “I am the fundraiser. I am the editor-in-chief. I’m the publisher. I’m the web developer. I am the manager. I am the guy who sets up our street fairs.” And aside from earning “some commission from ad sales,” he does all of that, as he testified in a California State Judiciary Committee hearing in December, for free.

Breaking out of that one-person grind can be a catch-22, especially for newer, small nonprofits operating without staff dedicated to applying for grants, building membership revenue, or attending to other business needs. “There’s kind of a chicken and egg thing of ‘We need people to help us make money, but we need money so we can pay the people who help us make money,’” said Corinne Colbert, publisher of the Athens County Independent.

“Fewer, bigger grants”

The factors that leave small newsrooms at a disadvantage when applying for grants from national funders have a lot to do with broader patterns in how philanthropy works, and how funders think about quantifying impact and risk.

Molly de Aguiar, the president of the Independence Public Media Foundation, has spent decades thinking about and working through those challenges as a local news funder and innovator. “Philanthropy in general favors larger, more well-established nonprofits, which is as much about mitigating the ‘risk’ of their investment as it is about demanding impact through scale of people being served by the nonprofit,” she told me in an email in December.

It’s a heavy lift for funders to evaluate hundreds of smaller newsrooms, especially since news is a newer beast for philanthropy compared to areas like the arts or education. It’s a lot less work to give funding to bigger newsrooms with well-established reputations — or to journalism support organizations (“intermediaries”) that can do the grunt work of vetting. “National funders are looking to make fewer, bigger grants and use intermediaries who know the local organizations better than the funders do,” de Aguiar said.

The importance of supporting small, scrappy startups in their early days was a major personal lesson for Sue Cross from her time at INN, where she was executive director from 2015 until last December. “I, like many journalists in this field, come from big media,” she told me in a December interview (before joining INN, Cross worked for the AP for more than 15 years). Similarly, “foundations are also often staffed by people who grew up with traditional news. And so success gets defined that way, rather than innovation, rather than small and impactful.”

Preconceptions about what news should look like are compounded by the philanthropic interest in funding bigger entities, because investments that reach more people can be quantified as having more impact. As a consequence, large, institutional foundations “do disproportionately fund big media,” Cross said. “They’re large institutions, they’re much more comfortable with it…it hearkens back to those traditional metrics of ‘What’s your reach? What’s your scale?’”

Cross said, of the concern that smaller newsrooms are left out of conversations with funders, “I think there’s truth to that. And it must be very, very frustrating.”

Many funders still are inclined to think “it’s so small, it’s fragile, we want to wait til they’re three years old and see if they make it,” Cross explained. But, she said, “I think this is the time for taking risk[s].”

What’s more, in working with hundreds of small news outlets throughout her time at INN, Cross has learned that small nonprofit newsrooms are not necessarily as much of a risk as funders expect, especially because they tend to be much nimbler than legacy media. “If they try something and it doesn’t work, they’re much more willing than large traditional media companies or large established companies to just switch directions and try something new,” she said. “Success doesn’t come from scaling in the way tech loves to talk about it, or this conglomeration of big media groups— you can have quite small companies that are very stable, very successful.”

“Not the first field to call for unrestricted general operating support”

It’s one of the core questions, and classic push-and-pull cycles, for philanthropy: project-based funding or general operating support?

ANNO news outlets generally want, and say they need, more direct operating funding. That’s hardly surprising in that nonprofits, in general, tend to want the most say possible over how they can use the funding they receive. News nonprofits are no exception.

“Journalism is not the first field to call for unrestricted general operating support,” Karen Rundlet, CEO and executive director of INN as of January and previously senior director of the Knight Foundation, told me in an email. “It is a constant discussion in philanthropy. There are many excellent nonprofits in the U.S. working to end homelessness, eradicate poverty, protect the environment, provide services for our children. They too, are calling for unrestricted funding and general operating support.”

Rundlet added that she believes general operating support is important for newsrooms, but that other types of support also benefit news outlets. “It’s a ‘yes, and’ for me,” she said.

ANNO members like Joanna Detz, the publisher of EcoRI News, say that for nonprofit newsrooms, specifically, project-based grants do not give newsrooms the runway they need to make meaningful progress toward sustainability.

“You can really project yourself to death as a small newsroom,” she told me. “Some of the grants that we’re eligible for are [$3,000 or $5,000] grants targeted to a specific project that takes away resources from the journalism, and we don’t have the staff to really make those projects worthwhile.”

Grant opportunities might be focused on audience growth and development, or marketing, Detz said — areas where EcoRI does indeed need support. The problem is “it’s hard to move the needle when you don’t have the staff and the resources to fulfill that grant and do the work,” she said.

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Since 2022, Amihere, of AfroLA, has mostly funded the outlet by cobbling together grants under $8,000 (plus pouring in thousands of her own money). The one grant that was “five digits,” she told me, “helped a lot, but it’s…restricted funding” that she’s only been able to use for a data-driven reporting project. As excited as she is about that coverage, “for right now, it does not help me,” she said. “It doesn’t mean that I can pay myself.”

Some grant specifications are so narrow, Amihere added, that “it’s almost, like, guaranteeing certain places are going to get it…it feels like a very rigged game sometimes, still.”

Cross described the importance of general operating funding for small newsrooms in presentations to funders last fall. Only local news outlets, she said, know how funding can be put to best use, and project-based typically funding does not give them the flexibility to pivot to the kind of work needed. Local outlets “know their communities,” Cross told me. That means they know when to focus on a sponsorship program, or a membership program, and which initiative they should funnel funding toward at a given time. “Funders are removed from that,” she said.

While project-based funding can be useful, Cross said it tends to be more “transactional” and short-term. General operating support, on the other hand, allows outlets “to grow, and get established, and experiment with what’ll work locally.” For the smaller, experimental newsrooms driving much of the growth in nonprofit journalism with very limited staff, “your money as a philanthropist is spent much more effectively if you can give them runway,” Cross added — meaning, ideally, multi-year operating funding, instead of annual funding or even more limited project funding.

The foundations doing the grant-making, though, tend to prefer having more control over how their money is spent. In particular, smaller, local funders, which often have many other priorities besides media, often prefer to provide project-based funding, de Aguiar said. But larger funders may prefer project-based grants, too.

“It’s an indirect way to influence news coverage on a particular topic, or at minimum, to assure that a particular topic gets covered, or that a particular technology or process gets tested, or whatever other pet project the foundation has gets implemented,” said Rodney Benson, a professor of media, culture, and communication at New York University whose research focuses on different types of media ownership, including nonprofit, foundation-supported news organizations. “And it’s a way of ensuring quality control and limiting the up-front commitment, so that once the project is over, it’s easier to move on to something else if they so choose.”1

“Shiny objects”

A sense that funders were looking for “shiny objects,” rather than to simply fund reporting, came up in several of my conversations with publishers from small news outlets. Specifically, some said they see too much funding going toward trainings and tech tools — which can be useful, but not if outlets lack the means to do the baseline reporting such resources are intended to support.

Nancy West, the founder and executive editor of InDepthNH.org, told me she’d taken advantage of trainings offered by the Institute for Nonprofit News (INN), Local Independent Online News publishers (LION), and other organizations over the years, and some had been helpful. But at this point, “we are very well trained,” she said. “We just need to hire people, professionals, that can do that work full-time,” especially on the business end.

Jason Pramas, executive director of the Boston Institute for Nonprofit Journalism (BINJ) and the catalyst of ANNO’s formation, said he wants to see more coordination between funders and support groups to ensure publishers’ needs are actually being met and offerings are not duplicative.2

To some ANNO members, “shiny objects” has another connotation: a funder bias for new outlets over existing ones.

In that vein, Colbert, of the Athens County Independent, voiced some frustration toward the American Journalism Project-supported Signal Ohio operation. “What was set up as and sold as a statewide network turned into a single-city newsroom” focused on Cleveland, she said in October (though Signal Akron, a second newsroom, launched in December). What’s more, Colbert felt the effort had left her outlet out. “They just are not interested in us,” she said. In a follow-up email this week, Colbert told me she stood by these statements since Signal Akron’s launch.

Signal Cleveland launched in November 2022; Signal Ohio has raised more than $15 million, with the Cleveland Foundation, the AJP, and the Visible Voice Charitable Fund all contributing $1 million or more. “That kind of money, they could have given six figure grants in every county in the state,” Colbert said. “I’m all for having multiple outlets. But before you start supporting multiple outlets in a place, you ought to make sure that places that don’t have anything are taken care of.”

Roshni Neslage, head of communications for the American Journalism Project3, told me in an email in December that “Signal Cleveland was born out of our programmatic work to activate and engage local philanthropies.” Cleveland-based funders approached the AJP “because of the huge information voids they were experiencing,” she told me, which the AJP confirmed with “extensive market research.”

Within that work, Neslage said the AJP saw an opportunity in Ohio “to set up the infrastructure to expand into more communities.” Signal Akron’s launch is the next step toward “what we anticipate will be a large, statewide network of newsrooms serving every corner of Ohio, including the state’s more rural communities.”

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“They’ve got big, long-term ambitions to serve the entire state, and that includes working with existing organizations that are already doing work to reach Ohioans,” Neslage added.

As Colbert sees it, a strategy that prioritizes communities with a strong local philanthropic scene ends up penalizing the places that need news the most.

That’s a disparity the AJP thinks about, too. “It is undoubtedly a challenge to fund local news in rural communities or in communities with struggling economies,” Neslage said, “but we see a path forward: primarily, by engaging donors throughout the state to fund local news operations in the small or rural communities within it.” A networked model means “organizations share business and operations infrastructure, giving way to individuals or small teams of journalists that can report in small communities that would otherwise struggle to sustain a local news outlet” while also drawing in a wider base of funders.

Dr. Alice Dreger, a historian and the founder of East Lansing Info4, said she wants to see a networked model in her own state of Michigan. But to her, the AJP’s work founding Signal Cleveland, as well as Mirror Indy in Indiana, neglected the grassroots news outlets that already existed in those communities.

Dreger still has deep appreciation for the work of the Indy Star, despite generally supporting nonprofit news. “The Indy Star broke the Nassar case, which, living in East Lansing, means a lot to me,” she said. “I’m very devoted to the Indy Star emotionally for having done that work.” So she was frustrated to see that Mirror Indy reportedly poached Indy Star staff.

Pramas referred to the AJP’s approach to creating regional news outlets as “steamrolling.”

“We think what they end up doing, even though they don’t mean to, they shove grassroots groups that have started on the ground in those states out of the way, and sometimes poach their staff,” he said. “And the money that’s being dumped into these regional organizations doesn’t necessarily get at all to the groups on the ground, and then they die.”

I asked Neslage about how the AJP thinks about the merits and tradeoffs of funding new startups, versus trying to sustain existing news outlets, in the context of Mirror Indy reportedly hiring some editors away from the Star.

“When we fund new startups, it’s because we see that as the most effective way to sustainably fund more original reporting and local reporters in those communities,” she told me. “The nonprofit newsrooms we work with are collaborative and seek to fill gaps, not to compete with other news organizations.” She added that AJP-supported newsrooms “do not encourage or engage in poaching or ‘raiding’ other newsrooms for talent” and “we have yet to see a nonprofit newsroom in our portfolio hire a significant percentage of staff away from another local outlet.”

Instead of funders building up entirely new organizations, like Mirror Indy, Dreger longs for “a system of news that is harder to create,” she said, “but could be done, given the proper resources.”

Specifically, using her own state as an example, she said an organization like Bridge Michigan could be connected to East Lansing Info and other hyperlocals, funders could invest in those small newsrooms, and these organizations could share information, reporters, and back-office resources like payroll and legal services and policies — the same resource-sharing Neslage described the AJP envisioning, but essentially building up existing outlets, instead of creating new ones. In Dreger’s view, that kind of collaboration, with regular meetings among the networked news outlets, would save small organizations like East Lansing Info time and money, while allowing them to learn from the standards of bigger organizations like the Bridge.

BIPOC publishers have said this before

If some of these critiques of funding systems sound familiar, it might be because leaders and supporters of BIPOC-led newsrooms have shouted them from the rooftops — especially drawing attention to the acute need for more accessible general operating support.

Funders “are supporting intermediaries that are sucking up dollars and building up their business models on the backs of publishers, particularly publishers of color,” Tracie Powell, the CEO and founder of The Pivot Fund, which raises money for BIPOC-led news outlets, told my colleague Hanaa’ Tameez in a conversation about funding inequities BIPOC publishers face last fall. “They [say] they’ve started these fellowship programs and boot camps for publishers of color. Well, they’re taking all the money and only giving the publishers five, ten, fifteen thousand dollars! That introduces more harm in the system than help.”

Powell and Dr. Meredith Clark, the director of Northeastern University’s Center for Communication, Media Innovation and Social Change, surveyed and analyzed data from 100 BIPOC media founders and publishers about their critiques of philanthropy, and published their findings last year. Many of their summarized recommendations align closely with ANNO members’ critiques of current funding systems, including streamlining reporting requirements for grants and providing a meaningful amount of funding if requiring “boot camps and accelerators.” But the clearest parallel is in their call for funders to “provide general operating support, and recognize that game-changing progress comes from grants big enough to support at least one new position.”

There is clear data demonstrating that it’s harder, as a BIPOC-led nonprofit news outlet, to get general operating support. Among outlets led by people of color, the “median percentage of foundation funding that can be used for general operating expenses” is 56%, according to an INN report on diversity in the nonprofit news sector published in 2023. For white-led outlets, that figure is 70%. These findings suggest “BIPOC-led outlets tend to receive more restricted grants than white-led outlets,” the report concluded.

But some of INN’s other findings in response to the question of whether there are disparities in foundation funding for BIPOC-led versus white-led outlets were more complicated.

INN’s report noted that “the racial and ethnic composition of personnel in the nonprofit news sector is largely similar to the U.S. population.” At the leadership level, however, “more than two-thirds of nonprofit outlets surveyed are white-led” (about 70%), which INN defined as organizations with more than 50% of executives and managers being white. INN found that “outlets at the state or province level are the least likely to have BIPOC-majority leadership,” and that among all surveyed outlets, just 10% were BIPOC-led, while 83% were white-led.

Demographically, the leadership of ANNO outlets is fairly consistent with that pattern: In the vast majority of ANNO newsrooms, the top editor, founder, or publisher is white. (That being said, some ANNO outlets have white editors or founders and BIPOC-led boards of directors, so the question of which publications are and aren’t “white-led” isn’t totally cut and dried.)

At the state and local level, BIPOC-led outlets report higher levels of foundation funding than white-led outlets. While the median amount of foundation funding received by state and local BIPOC-led outlets in 2022 was $321,726, the median amount comparable white-led outlets received was $122,382.

That’s the opposite of the trend at the national level, where BIPOC-led outlets received a median $435,000 to white-led outlets’ $867,947. It also differs dramatically from the trends in individual giving for BIPOC-led and BIPOC-serving state and local outlets; INN found that individual giving made up a median of just 9% of revenue for BIPOC-led and BIPOC-serving outlets at those levels, compared to 38% of revenue for all other state and local outlets.

There’s also a disparity when you look specifically at startups, indicating recent changes to trends in who receives funding. BIPOC-led startups (defined as outlets launched between 2020 and 2022) at the state and local level received a median amount of foundation funding “six times higher than among white-led startups.” But BIPOC-led outlets launched before 2020 “tend to report lower levels of foundation funding than their BIPOC-led startup counterparts.”

Interviewees observed to INN that longtime journalism funders’ grantmaking priorities and criteria have changed, with “the emergence of newer funders focused on supporting BIPOC-led and BIPOC-serving news organizations.” Also, it’s possible that some new funders — philanthropy organizations that haven’t traditionally funded journalism, but have a “justice-oriented” focus — see more of a natural overlap of their missions with supporting BIPOC-led and BIPOC-serving outlets.

It’s crucial to understand that these medians and averages don’t reflect the experience for all outlets led by people of color. Amihere, who leads AfroLA, is Black. (Dr. Meredith Clark is AfroLA’s board chair.) Data like this, Amihere thinks, is “why I get a little bit of backlash from people who are other news founders who feel like, ‘oh, well, Black folks, y’all are getting all the money.’ And I’m like, whoa, whoa, whoa, whoa — we are not!”

“Maybe the most visible organizations are,” she added — bigger organizations getting grants over $500,000, or $1 million. “But that is not the story for most of us…and I will tell you, it’s definitely not the story for me. It’s not the story for AfroLA.”

Adam Gillitt’s Alameda Post is a good example of an outlet that falls squarely within that 83% of white-led local and state news nonprofits. The Post, he told me, is “a general news source for a suburban city” focused on serving its entire community; its 76,000-person population is about 40% white, 30% Asian, 12% Latinx, and 7% Black.

“I am queer, but we are not a queer organization. My partner’s a veteran, but we’re not a veteran organization,” Gillitt added. “So we don’t really qualify as any sort of covering an underserved community.”

Alameda is also a relatively privileged area, with a median household income of about $130,000. Yet even in a community like Alameda, rebuilding local news is a financial and business challenge, and Gillitt says the Post needs more funding to survive.

For the Post’s sake, and the community’s, Gillitt’s hope is that powerful funders — including those involved in Press Forward — focus on outlets’ needs “not just based on the demographics of the newsroom, but the financial need of a newsroom.”

Because his news source reports for the entire community, and is not limited to serving a specific underserved demographic, Gillitt worries the Post won’t be prioritized for funding — even though the publication is trying to provide public-service reporting for its community that wouldn’t otherwise exist. “I’m worried that because we’re not serving an underserved community, that people are going to say, ‘Oh, well, we really want to focus on these newsrooms that are reaching people that wouldn’t otherwise get news,’” he said. “The thing is that we are one of those newsrooms. It’s just, the people that wouldn’t get news don’t happen to be disadvantaged. They happen to be people who live on an island next to Oakland.”

Gillitt’s point gets at the reality that the business of local news is challenging almost everywhere, and that even in wealthier areas, local news startups are, as Gillitt argues, in need of supplemental institutional funding. But if the assumption is that nonprofit news outlets in well-off communities can earn enough revenue — via memberships, ads, sponsorships, events, etc. — from readers and local organizations while those serving poorer communities can’t count on those dollars and must rely, instead, on grants, an example of a white-led local news nonprofit with an acute structural need for nationally supplemented funding would be the Athens County Independent. Athens County is about 90% white; its median household income is about $49,000, as reported in Part I of this series.

ANNO publishers I spoke with emphasized that they value diverse newsrooms and serving diverse, and underserved communities, including BIPOC, economically disadvantaged communities, and audiences in rural areas.

Dreger (who is white) is concerned that the recent shifts in philanthropy to support BIPOC-led newsrooms will abruptly reverse, hanging critically important publications out to dry. “My great fear is that DEI is not going to be paid attention to the way it is today in three years,” she told me in October. If that happens, and funding dries up, “I think we may actually slaughter a bunch of potentially viable organizations.”

In general, the unpredictability of “funding fashions” can be devastating to the most precarious newsrooms, Dreger emphasized. Such an “erratic approach to fundraising is very insensitive…to the reality of people doing local news, hyperlocal news especially,” she said.

Her worry about funding fashions extends, specifically, to Press Forward — if a rollout of money now creates news and infrastructure, “but there’s no money after that, what happens is the tsunami washes in and the tsunami washes out.”

AfroLA’s Amihere is not just worried about a reversal in philanthropy’s funding of news outlets led by people of color — she already sees it happening.

“It’s already drying up — the post-George Floyd, Black Lives Matter, white-guilt funding is already drying up,” she told me this month. The people she’s talking to in fellowship cohorts and group chats on Slack, she said, are already saying, “this multi-year funding that started in 2020…it’s going away, and they’re not renewing it.”

“New dollars alone do not accelerate a news business on the path to sustainability.”

Despite the entrenched patterns that incentivize philanthropies to focus grants on larger newsrooms, de Aguiar believes funders could make changes that would channel more support to small outlets.

“National journalism funders could make the choice to commit to a long-term strategy to build up small news organizations with budgets under a certain threshold, and give them five- to 10-year operating support grants,” she said. “There’s nothing stopping them from doing that.” Except, perhaps, the desire for control: de Aguiar cautioned, “it’s hard to overstate the degree to which institutional philanthropy (national and local) believes in its own expertise, and therefore how much structure it puts in place to maintain control over the money it grants.”

Funders could make adjustments to any of the factors that limit the uses of their grants, de Aguiar said, in ways that could benefit nonprofit newsrooms. “The amount of the grant, the length of the grant, the purpose and restrictions of the grant, the overhead restrictions, the reporting requirements, the length of the application, funding or not funding fiscally-sponsored organizations — all of these are choices that funders make,” she noted, “and they could choose differently if they wanted to.”

In de Aguiar’s mind, there’s no question that general operating support would benefit small newsrooms.5 “There are some things about philanthropy that are very complex, and there are some things that are very simple,” she told me. “One of the simple things is that unrestricted funding, coupled with responsive capacity-building support, is the best way to ensure that nonprofits can thrive. It’s just not up for debate.”

Some voices, however, caution against seeing general operating funding as a silver bullet for newsrooms, and give more texture to what kind of “responsive capacity-building support” can be necessary.

In December, LION shared findings from its two-year experiment exploring the relationship between direct operating funding and sustainability. “If there’s one thing our members have consistently told us, it’s that they want more direct funding to help make their news businesses more sustainable,” wrote Lisa Heyamoto, LION’s associate director of member education. “An influx of cash, the thinking goes, is just the catalyst a publication needs to build its team, increase its impact and grow its bottom line.”

LION tested that theory with a Revenue Growth Fellowship launched in 2021. The program provided 12 LION members with two years of direct funding “to hire someone in a revenue-generating role.” Specifically, LION provided between $65,000 and $89,000 “in successively smaller increments over two years” with the goal of having the revenue hire bring in enough money to cover their own salary by the end of this period.

But LION found that “new dollars alone do not accelerate a news business on the path to sustainability.” Only half of the dozen outlets were able to cover the salary of the revenue hire after two years. LION concluded that, “without taking the time to create a strong operational infrastructure, thoughtful employee recruitment and management and a focused revenue strategy, no amount of direct dollars will make a news business financially healthy.”

This fellowship was LION’s “first foray into being a funder.” But the organization’s five-year strategic plan released last fall noted that “while LION has historically given direct dollars to our members through our programming, being a funder is not our long-term strategy.”

LION still provides some direct funding — its largest program, the Sustainability Audits and Funding program, includes payments of $20,000 for participating newsrooms. “In many of the ways that align with the ANNO coalition’s concerns, that program evolved from smaller, cohort-based efforts that tied significant dollars to a lottery-style system,” LION executive director Chris Krewson told me in an email in December. “It felt inefficient, like we were picking winners, and presented too many hoops for participating news businesses to jump through. In other words, we definitely know money alone isn’t enough AND we shouldn’t make people jump through cohort hoops to get funding.”

Beyond direct funding, for small publishers especially, Krewson said LION has found that since many small publishers are former journalists, “we spend time talking about product thinking. How to measure your resources, carefully husband them, track what’s working and stop doing what isn’t, etc.,” as well as basics like building a budget and launching a new line of revenue.

“I’m planning as if I’ll never see any of that money”

In mid-December, the MacArthur Foundation announced its first $48 million in grants for Press Forward, including $32.5 million for a national pooled fund for local news at the Miami Foundation; direct grants ranging from $350,000 to $1 million for eight local newsrooms; $3.5 million for NewsMatch; and additional funding for organizations focused on public policy, legal guidance, and support networks for publishers of color.

Kathy Im, MacArthur’s director of journalism and media, said MacArthur met with ANNO members before the group officially formed last July, and heard their concerns about the challenges of obtaining direct funding from philanthropy. “That conversation helped inform how Press Forward will address the needs of small newsrooms,” she told me in an email in November. MacArthur, as a funder with a history of providing direct, unrestricted support to grantees, “took that input to heart,” she added. (MacArthur recently hired Silvia Rivera as its director for local news to represent MacArthur in Press Forward.)

Still, as Press Forward continues to take shape, Amihere told me she’s “cautiously pessimistic.”

“In my heart, I think there is a 95% chance I will see nothing out of it,” she said. “Even though the publicized intent of that fund is to help organizations like mine, I’m planning as if I’ll never see any of that money.”

Instead, she added, “I think the organizations that are already more visible, that are, you know, ‘already trusted’ in the minds and imaginations of funders, because they have a proven record of success — that’s who the money is going to go to. And I’m not saying that those people are not deserving!…because I think that on the whole, most of them do really good work…it’s not for me to judge who is worthy or not worthy. What I have an issue with is the gatekeeping of saying, ‘you’re worthy, or you’re not worthy,’ and not giving people who you don’t deem worthy an opportunity to prove themselves.”

Pramas, similarly, worries that “the money’s going to go to the groups it always goes to.” Dreger, meanwhile, is apprehensive that Press Forward will cut into the existing funding that small newsrooms rely on, because funders will be incentivized to centralize their contributions through Press Forward. That could inadvertently result in less funding trickling down to the smallest organizations; it could “accidentally defund a lot of us,” she told me.

She’s also concerned that the funders East Lansing Info relies on each year will pull back, thinking that with such major funders pouring hundreds of millions into local journalism through Press Forward, the outlet must no longer need their support. (Dreger outlined some of her observations, and skepticism, about Press Forward in her newsletter this week. John Palfrey, president of the MacArthur Foundation and a key leader of Press Forward, engaged with the post when it was republished by ANNO member InDepthNH.)

“We have heard these concerns, and we are doing are best to allay them because this is not happening,” MacArthur’s Im told me in November. “So far, all the funders that have contributed to the pooled fund are national donors that have not previously funded local news or funders who are going beyond their annual journalism budgets to contribute to the pooled fund.” MacArthur is also tracking local donors interested in creating Press Forward local chapters, she added, and “most of the donors we have heard from are either new to funding journalism or are coming to us to help us raise more money for the projects and organizations they already support and plan to continue to support.”

Pramas would like to see some of the funders participating in Press Forward supply some widely distributed grants similar to a federal stimulus check. “Break off 10, 20, 30 million [and] give every one of the hundreds of groups out there 30, 40, 50 thousand dollars a year — just give it to us,” he said. “That’s hardly the main chunk of money that they’re dispersing.”

“The priority should be on sending checks and direct bank deposits to as many newsrooms as humanly possible,” the Independent’s Colbert agreed.

Gillitt felt similarly. If his newsroom got a $100,000 grant from Press Forward, that would cover its entire last year of operations, he noted, even though “to [Press Forward], that would be a drop in the bucket.”

Im told me that Press Forward “will be making direct grants to small and mid-sized newsrooms.” She referenced Press Forward’s four investment priorities as the current guideline to how the organization will distribute funding (though final guidelines for national and local Press Forward efforts “are still in the works”) — including “strengthening newsrooms that have the trust of their communities,” which will involve many Press Forward funders “making direct grants to newsrooms.”

But grants won’t only go to newsrooms; many Press Forward coalition members believe it’s critical to support more intermediary organizations and resources that support journalism as well, Im told me. “Many funders also see the value and impact of organizations and projects like the Racial Equity in Journalism Fund and NewsMatch and will be supporting field-wide efforts like these, alongside direct support of newsrooms,” she said. Press Forward also intends to support news “infrastructure, technology, training, legal support, and other services,” as previously reported.

Another of Press Forward’s investment priorities is “closing longstanding inequities in journalism coverage and practice.” Pursuing that goal, Im said, will include supplementing news in “economically challenged news deserts,” including rural areas with less local philanthropic support to draw on, like Colbert’s Athens County. “In many of these places national funding will have to play a bigger role than local funding,” Im said, “and a range of civic institutions, from public media to universities, will have to play a larger role in news production and dissemination.”

Cross reflected that the funders in the Press Forward coalition “have a real challenge,” practically, getting on the ground in so many small, local communities. She hopes that INN can help gather input from local communities, or facilitate conversations with funders.

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To help bring more money from local philanthropy to small newsrooms, de Aguiar would like to see the Knight Foundation — another primary Press Forward funder — or Press Forward itself return to a program Knight previously ran to incentivize and support community foundations in becoming media funders. “Community foundations are the obvious and best choice for supporting small newsrooms like ANNO members, most of which are place-based newsrooms,” she said.

To Benson, of NYU, Press Forward seems to be moving in the right direction. “Whether it’s the American Journalism Project, or Press Forward, or any number of initiatives, any new investment — if it does actually represent new investment rather than a redirecting of existing investment — is welcome,” he said.

“It doesn’t seem like anyone believes any more that the need for foundation support is going to go away anytime soon,” Benson added. “No one believes that there is a path to a pure market-oriented solution to providing the public good of quality news, especially local news. This kind of news is going to have to be subsidized, in one way or another, over the long term.”

Read Part I of this series here.

Photo by Markus Spiske on Unsplash.

  1. In an interview in 2017, Benson told my editor Laura Hazard Owen, “One of the problems that I identify is the way that foundations are moving increasingly toward project-based funding over long-term organizational funding. If the foundation world itself could acknowledge the importance of long-term organizational funding, that would be, I think, progress.” ↩︎
  2. That’s something Anika Anand, deputy director of LION Publishers, emphasized in her Nieman Lab prediction in December. “The problem is not intermediaries receiving too much foundation money,” she wrote; “the problem is the lack of coordination between these intermediaries to enable the most efficient and best use of existing resources.” ↩︎
  3. It’s worth noting that the American Journalism Project has an explicit focus on building some of the capacity ANNO members say is most needed: “operational and revenue capacity of nonprofit newsrooms, including funding new revenue and other business roles.” ↩︎
  4. She stepped away last fall after a decade of work at the outlet. ↩︎
  5. Though de Aguiar believes newsrooms need and deserve more direct support, she does not see that need as any kind of dichotomy with funding journalism support organizations. “I do believe that intermediaries provide valuable support and services and deserve robust funding,” she told me, “and also I would like to see more operating support go to newsrooms. I think both are possible and necessary.” ↩︎
Sophie Culpepper is a staff writer at Nieman Lab. You can reach her via email (sophie@niemanlab.org) or Twitter DM (@s_peppered).
POSTED     Feb. 8, 2024, 4:55 p.m.
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