Nonprofit News Outlets Growing Less Dependent on Foundation Funding, Study Finds

The nonprofit news sector is becoming less reliant on foundation funding, thanks in part to increased interest from individual donors, a report from the finds.

Based on open data from eighteen news outlets, the report, (53 pages, HTML or PDF), analyzed the ways in which nonprofit news organizations raise and spend money, with a focus on audience engagement, revenue generation, and organizational capacity. A follow-up to the Knight Foundation's 2011 study , the report found that most of the eighteen organizations have grown their revenue, some significantly; that many are developing a diverse set of revenue streams, including individual donors, sponsorships, events, and syndication; and that new models for audience engagement and content distribution are emerging. For example, the report found that foundation funding as a percentage of total revenue declined from an average of 65 percent in 2010 to 50 percent in 2012, while the share from individual donations increased 36 percent, to $20 million from $14.7 million.

The report also tracked each organization's ability to experiment with revenue sources beyond foundation support; Web traffic, social media use, and the ability to create unique and relevant content that builds lasting connections with audiences; and investments in editorial and technology tools, as well as marketing and development.

At the same time, the report found that most organizations are devoting more of their resources to editorial than is likely to be sustainable in the long term, and that nearly all have limited technological capacity. While spending on news is critical, the report notes, organizations cannot afford to ignore the technology, business, and audience engagement factors that drive sustainability.

"Nonprofit news organizations have made progress — reducing their reliance on foundation funding, building new revenue sources, and investing in business development and marketing. Among the clear front-runners are those that are constantly experimenting and challenging assumptions around who their audience is and what they care about," said Mayur Patel, vice president for strategy and assessment at the Knight Foundation. "But there is still work to be done. That's why creating a benchmark from which organizations can see themselves in context and examine their effectiveness is so important."

"." John S. and James L. Knight Foundation Press Release 10/29/2013.