February 16, 2018

The non-profit news sector has been a favorite of foundation journalism philanthropy for more than a decade. But a new idea for how to help is now giving sites a big boost in building their own base of donors.

Back in 2016, the Knight Foundation hit on the idea of applying the venerable formula of a matching grant challenge to more than 100 sites that are members of the Institute for Nonprofit News.

Two more big foundations — MacArthur and the Democracy Fund — joined Knight last year in pledging up to $1 million each. And some impressive results for the October-to-December NewsMatch drive were reported Wednesday.

  • In all, participating donors and foundations raised $4.8 million.
  • More than 200,000 individual donors contributed, 42,000 of them giving to one of the news sites for the first time.
  • The donors gave $33 million in all, including gifts not covered under the terms of the match.
  • 25 more local and national foundations joined in the program during the course of the year.

More of the same is planned for 2018, though a dollar goal and the number of participating foundations has not yet been set.

Josh Stearns of the Democracy Fund, who coordinated the effort, said that the purpose of the exercise was not just to get money to the sites, many of them very small, but more importantly to build their fund-raising capacity.

For some, that meant starting a donors program with "plug-and-play" templates, developed over the past two years, that make the process very easy for both givers and recipients.

For others, the match was a way to ramp up existing giving programs. I spoke to two of the latter, who had more or less opposite strategies for fitting the opportunity to their needs.

Phayvanh Luekhamhan oversees fund-raising for VT Digger, an investigative site in Vermont. She said that the incentive of the match and the endorsement of a big foundation like Knight "carries weight with our readers" and brought many new contributors on board. With an annual budget of $1.3 million, VT Digger brought in $350,000 in gifts during the last quarter of 2017 and gets roughly 40 percent of its funds from donations.

Luekhamhan's counterpart at the Wisconsin Center for Investigative Journalism, Lauren Fuhrmann, chose instead to focus on expanding a major donors' "Watchdog Club" for those giving $1,000 or more. 

The drive helped grow that group from 28 to more than 50. And Fuhrmann crafted a "triple match" for the last months of 2017, in which existing larger donors matched new gifts of $1,000 on top of the foundation match.

The Center lost legislative support and was threatened with being kicked off the University of Wisconsin campus after a 2013 expose annoyed legislators, Fuhrmann said, but has steadily raised giving — by 56 percent just in 2017.

All qualifying sites are members of the INN, which also provides shared services and advice to organizations. The member nonprofits pledge to follow best ethical practices for funding and transparency.

That certification — plus the grass-roots support of readers, Stearns said, is a door-opener for foundations that may "not necessarily have been into journalism." Getting wider interest from community foundations to back digital startups in their area is a big step forward, he added.

The match was structured to cap at $28,000, so that ProPublica and a couple of other larger member sites did not get a huge share of the proceeds. And the October-December window both matches the peak giving season and gave sites time to prepare and promote.

I see the successful campaign as another indicator of a growing willingness of readers to pay for news coverage they think is aggressive and valuable — voluntarily in the case of sites without paywalls.

The high-profile case of that support among large publications is The Guardian, which had 800,000 contributors in 2017 and now has more reader than advertising revenue.

On the local scale, Sean Harder of the MacArthur Foundation noted that when the DNAInfo hyper-local site in Chicago closed, several editors decided to organize a similar service named Block Club. They launched a Kickstarter campaign to raise $25,000 in seed money and had pledges of $120,000 within two days.

Add in the huge digital paid subscription growth at publications like The New York Times, Washington Post and The Atlantic, and there seems to be grounds for optimism that an inflection pooint has been reached.

"I hope that this is part of a trend," Stearns said. "But I think there is still a question of how to cultivate that in smaller organizations."

(Disclosure: Knight, the Democracy Fund and MacArthur all fund Poynter programs).

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Rick Edmonds is media business analyst for the Poynter Institute where he has done research and writing for the last fifteen years. His commentary on…
Rick Edmonds

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