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Fundraising Strategies for Digital Newsrooms

Top Fundraising Strategies for Digital Newsrooms

With more and more publishers switching to nonprofit status, we decided to take a close look at which fundraising strategies for digital newsrooms are most effective.

Around the country, hundreds of thousands of people are donating to their favorite news organizations. Creative publishers are pulling out all the stops to get their readers involved. Although some of the top fundraising strategies for digital newsrooms are straight out of the traditional charitable organization playbook, others are purely news-driven.

But first, a brief history to better understand how we got here.

Between the years 2010 and 2015, more than $1.8 billion in grants were given out in support of journalism. However, just 4.5% of those funds went toward nonprofit local reporting. Then, NewsMatch came into play. NewsMatch shook up the fundraising strategies for digital newsrooms, and gave publishers a new avenue to explore when it came to soliciting funds.

NewsMatch was born in 2017, when the Democracy Fund, the Knight Foundation, the Ethics and Excellence in Journalism Foundation, and the John D. and Catherine T. MacArthur Foundation came together. NewsMatch was designed to be a national matching-gift campaign, helping to grow fundraising capacity in nonprofit news organizations and promote giving to journalism among everyday donors.

Since its launch, NewsMatch has supported digital newsrooms in nearly every state. In its first year, NewsMatch worked with 109 newsrooms to raise nearly $5 million for local and investigative journalism. The organization inspired 43,000 new donors to give to nonprofit news.

But NewsMatch alone cannot sustain an industry. In order for nonprofit news organizations to thrive, they’ve got think about how they will continue raising money from donors and outside sources of support.

A number of nonprofit newsrooms have already started down this path. In 2018, individuals donated more than $116 million to journalism organizations. (That’s a 50% increase from 2017.)

We’ve compiled a list of the fundraising strategies for digital newsrooms that were used most successfully by nonprofit publishers last year, along with insights into how your publication can implement the same methods. Here’s what we learned.

Top Fundraising Strategies for Digital Newsrooms

1. Matched Donations
Is there a local group that frequently sponsors your publication? What about a particularly loyal business advertiser? Try asking that group or business to match the funds collected from donors during a specific day or month.

These sorts of fundraising strategies for digital newsrooms can be incredibly successful, since donors are more eager to show their support when they know their donations are being matched. Large businesses benefit from supporting these types of projects, as well, in the form of goodwill and positive consumer sentiment.

2. Employee Giving Programs
More and more companies are running employee giving programs as a way to encourage their employees to give back to charitable organizations. You might be wondering how these programs work and how they can benefit nonprofit local news groups.

In most cases, employees simply select a charity from a list provided by their employers. They make donations directly from their paychecks, and the companies they work for match those donations.

Participating in these types of programs as a nonprofit news organization is as simple as registering with a few third-party platforms. Start by registering with YourCause, Benevity, and Causecast. These are three of the most popular platforms being used right now. If your city has a large company that offers an employee giving program, you should call that company’s HR office to see which platform they use. Once you’ve gotten registered, you can promote the fundraising strategy through email marketing or with in-house display ads on your own website.

3. The Institute for Nonprofit News
NewsMatch raised $7.6 million in 2018. The bulk of that money went to the publishers in 154 newsrooms. How did those publishers get those funds? They simply signed up. The newsrooms benefiting most from NewsMatch’s fundraising efforts are all members of the Institute for Nonprofit News, a network of nonprofit newsrooms around the country. Membership dues are based on what news organizations can afford to pay, with most publishers paying between $50 and $350 per year. In exchange for those dues, members get specialized training in revenue generation, along with fiscal sponsors, business training, and content syndication through NewsTex and NewsBank.

4. Sponsorships
When it comes to the top fundraising strategies for digital newsrooms, no strategy is more popular—or effective—than soliciting sponsors. Sponsorships help to create more stable economics for local publishers, and unlike traditional advertising, they are typically relationship driven. What does that mean? With advertising, you’re selling a product. With sponsorships, you’re selling a relationship.

For example, American City Business Journals has offered page sponsorships on its topic pages. Those page sponsors feel invested in the topics they’re sponsoring. In some cases, sponsors may actually be experts on their topics, with the ability to suggest new story ideas to the publication’s reporters.

The key to successfully selling sponsorships is to first understand what your publication is offering to businesses that decide to become sponsors. How will becoming a sponsor help the business? What can your publication do for that company?

Do you have other fundraising strategies for digital newsrooms that have been successful? We’ve love to hear more about what’s worked for your publications.

Local Websites Sell Stock to Readers

When Should Local News Sites Sell Stock to Readers?

Rather than chase investments from outside financiers, a small number of local publishers are turning inward and asking for help from readers in their own communities. But whether local news sites should sell stock to readers is still a hotly debated topic, and as of now, there doesn’t seem to be a one-size-fits all approach.

Questions over whether local news sites should sell stock to readers have swirled for years, but the topic made national headlines again this past week, when The New York Times covered Sonoma County publisher Rollie Atkinson’s decision to do a direct public offering to the readers of The Healdsburg Tribune, The Cloverdale Reveille, The Windsor Times, and Sonoma West Times & News. With the capital raised in the direct public offering, Atkinson is hoping to make necessary website upgrades and raise his staff’s salaries.

What Is a Direct Public Offering

A direct public offering is an investment technique that allows outside investors of all sizes to buy shares of a company. Direct public offers are made to both accredited and unaccredited investors, which is what makes it possible for everyday readers to invest in a local news website. Direct public offerings don’t have to cost much more than traditional reader membership programs, but they give readers a deeper connection to the publication by giving them a financial stake.

While the term ‘direct public offering’ is relatively unknown in the outside world, most people have heard of crowdfunding. Investment crowdfunding and direct public offerings are very similar.

How a Direct Public Offering Works

A local publisher’s decision to sell stock to readers is never an easy one. In the case of Sonoma West, the process started with the hiring of a broker. That broker placed a value on Atkinson’s four community publications, which have a combined paid circulation of 9,900.

Next came setting a financial goal. Atkinson set his at $400,000, with the direct public offering open until March 2019. Usually, publishers will offer a certain dollar amount worth of preferred stock as part of a direct public offering, and then they will let people in a certain group—for example, California residents—buy into their publications.

Readers need at least $1,000 to buy into Sonoma West. Shares of the company cost $4 each, and the minimum purchase is 250 shares. (A prospectus is available to let readers know what the financial requirements are to invest.)

The local news parent startup Whereby.Us started its offering even smaller, inviting readers in Miami and Seattle to chip in as little as $500. In all, the company raised $250,000 from its reader-turned-investors.

Every direct public offering is unique, but it’s not uncommon for investors to be promised a certain annual dividend—for example, a 3% annual dividend—so long as the publication continues to flourish.

Why Readers Buy Stock in Local News Sites

In the local news business, a direct public offering only works when a publication has a strong relationship with its readers. Given the current political environment, there’s a desire from citizens to support local journalism. Publishers can capitalize on that interest by deciding to sell stock to readers now, before interest begins to wane.

More broadly speaking, direct public offerings tend to work best for local publishers in wealthy areas, with Berkeley and Sonoma County being two prime examples. The hyperlocal news outlet Berkeleyside ended up raising $1 million from 355 readers after its direct public offering, which is no small sum for a community-focused publication.

In addition to an annual dividend, readers who invest in local news sites also usually get access to certain perks, like the opportunity to meet with publishers or editors, and early access to special content and live events.

Why Local News Sites Sell Stock to Readers

Rather than chasing down funding from outside financiers, local publishers who sell stock to readers are putting control of their publications into the hands of their own communities. Major decisions, which would otherwise be made by an individual publisher or a financier with no ties to the community, are instead made collectively by that community’s residents.

The decision to sell stock to readers also gives publishers room for long-range planning. With fresh capital in hand, publishers can make any website upgrades they’ve been delaying, like mobile-friendly site redesigns or the development of mobile apps. The additional capital can also help publishers strengthen their coverage of certain areas or topics that matter to readers, like crime or education, or raise their employees’ salaries.