Philanthropy-supported publishers see an increase in local individual funders

In February, a coalition of philanthropists and charitable foundations raised more than $10 million to launch the Indiana Local News Initiative, aimed at supporting 12 local publications in the state as well as launching a new local branch of Capital B in Gary, Ind.

This initiative, spearheaded in part by the American Journalism Project, represents an ongoing trend in creating philanthropic revenue streams for news publishers, both locally and nationally. But a new and growing subset of the coalition are actually individual funders and local donors who are also part of the Indiana community.

“This effort in Indiana came about because there were local philanthropists there who were concerned about the decline of local news in their communities,” said Sarabeth Berman, CEO of AJP. And just as community theaters, school fundraisers, museums and libraries have been supported by local philanthropists and individuals for years, Berman and his team believe that local journalism is now seen as a civic institution in this same capacity.

To date, more than $130 million in funds for local journalism have been raised by local funders and national philanthropies combined through AJP, but community giving from local funders is one area of significant interest to new initiatives the organization is working on, according to the AJP. However, it is not just the initial investment in the community that is attractive. AJP management also believes that local philanthropy could potentially be a more sustainable source of revenue for local media.

The Houston Local News Initiative, which was also created by the AJP in January 2022, raised $20 million of three local philanthropies based in Houston, Texas, to create the nonprofit Houston Landing news organization, which is slated to go live later this year.

Lumina, an Indianapolis-based private foundation that was originally created to support higher education opportunities for high school students in the state, is one of the local funders that has become involved with the Indiana Local News Initiative. . Over the past two years, the foundation has expanded its support to include the media, including the launch of Capital B, in hopes that journalism support will provide greater coverage of community issues, such as higher education, according to Lumina’s Director of Strategy for Communications. Kevin Corcoran.

“Lumina has never committed to something of this scale and scope before with other local funders. … We hope that other local funders will continue to join us. It’s big and bold and exciting, but it’s also an unproven startup, so it’s scary,” Corcoran said.

Unlike large national funds that initiate the initial start-up or provide investments over a set period of two to three years, local philanthropies and funders – because they are based in the same communities as the publications they support – are more likely to develop long-term relationships, as they are part of the target readership that these news outlets seek to reach.

Take the AJP scholarship. All funds coming from the organization are limited to hiring commercial and operations teams, “because we think it’s really important that from day one you hire and develop the capacity to bring in other sources of income,” according to Berman. Thus, journalism professions and editorial initiatives are not covered by the AJP.

“That’s not the sexy part” of philanthropy, Berman added. “Most philanthropists are there because they want to support journalism.” And many other funders included in the Indiana Local News Initiative allocate their grants to journalism jobs and editorial initiatives.

The hope is that local philanthropies will stay well beyond the initial investment period and continue to fund non-revenue-generating journalism jobs, keeping philanthropy a smaller, but stable, part of the revenue pie. these local news outlets — the way they’ve funded other civic institutions for decades.

Tracie Powell, founder of the Pivot Fund, is a great example of how local philanthropies are advocating more for local media within their communities. Born and raised in Atlanta, Powell said she recognized a decade ago that local journalism needed the support of philanthropic dollars, especially publications founded and designed for marginalized communities. While not limited to Georgia-based publications, the Pivot Fund currently supports seven state news outlets in various ways.

“I had no idea the organizations we currently fund existed until we did our landscape analysis,” Powell said. But after witnessing the polarization and inaccuracies coming from national news outlets trying to fulfill the role that local news outlets would play in her communities but not having the financial backing to sustain it, she said: ” There is a [growing] recognition among funders that it depends on us. It is up to the communities to tell their own stories. And the way we do that is to invest in credible news and information from the community.

Word in Black, a nonprofit media collaboration formed in 2020 by the Fund for Black Journalism, the Google News Initiative and 10 local black-owned media outlets, derives about 45% of its total revenue from philanthropy – the majority of which is devoted to the production of its journalism.

“We meet with funders who have an interest in a subject to understand the inequalities that exist in black America, who want to see more journalism [and they] fund the pace. They want to make sure the stories get out there,” said Nancy Lane, CEO of the Local Media Association, which helped found the Fund for Black Journalism.

To date, nine Word in Black journalists have been hired and supported by individual funders and philanthropic organizations. But while these journalists focus on the national level, Word in Black’s network of 10 local newsrooms also receives financial support to cover these stories on the ground in local communities, said Larry Lee, president and publisher of the Sacramento Observer, one of 10 publications. included in the Word in Black network.

Even at the national level, the Guardian’s philanthropic arm — — provides anywhere between 5% and 9% of annual revenue per year on the North American side of the business, and lately a notable portion of donors have been individual contributors. In the publisher’s fiscal year, which ends March 31, about $300,000 in revenue came from individual donors who contributed between $5,000 and $10,000, according to Rachel White, president of and Vice President of Philanthropic and Strategic Partnerships at The Guardian. This represents between 7% and 13% of the total philanthropic income earned this year in North America.

“We have not actively encouraged this, but due to the success of our low dollar reader contribution program [which drove over half of The Guardian U.S.’s revenue this year] we would be remiss if we did not inquire whether [high-value individual donations] held potential for us in a more expansive way,” White said this year.

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