Sunday, April 17, 2011

Funding Challenges, Long-term Aspirations of a Nonprofit Newsroom

Shot of the newly-renovated KETC newsroom in St. Louis, Missouri. The building houses the St. Louis public television broadcaster, as well as the nonprofit online news organization the St. Louis Beacon. Photo from MagneticNorth.

You can’t mention a “model” for funding journalism without a can of mace these days. Mention the word, and you instantly become fodder for journalists, media tycoons, college professors, bloggers, SEO con artists and pretty much anyone with enough fingers to tweet.

Lately, the targets have been the newly-erected paywall at the New York Times and Rupert Murdoch’s iPad-exclusive app, The Daily. With the former, some suspect potential customers will be baffled and irked. With the latter, critics say Apple’s exorbitant fees and News Corp's cumbersome implementation may ultimately doom the enterprise. Other critics say both will fail long-term because they are dependent on closed, vertically-integrated systems that create artificial scarcity that simply does not exist in the rest of the digital world; and it only takes a short hop over the paywall or app store to find freer, greener pastures.

But before the Times and the Daily were whipping boys, nonprofit newsrooms were a popular whipping boy. MinnPost, the Voice of San Diego and ProPublica were the first of these newsrooms to garner nationwide attention. Some praised these operations for filling an enormous gap of coverage that commercial media left open, while others questioned whether it was wise to rely on handouts from a handful of wealthy donors to sustain journalism.

While the long-term prospects of those newsrooms remain to be seen, but they are still alive, vibrant, and producing journalism.

One of the lesser-known nonprofit newsrooms is the St. Louis Beacon. I recently had the opportunity to interview several people from that online news organization, including its founder.

Refugees of a consolidated media market

The Beacon is a nonprofit newsroom based in St. Louis Missouri, founded in 2007. There are eight editorial staff members, seven reporters, four staffers for business ops, two production assistants for web presentation, eleven board members, a chairman and a secretary-slash-treasurer.

The newsroom presents text-based news stories. Rarely, if ever, is there video or audio content. For the most part, it’s as close you can get to a newspaper without needing dead trees and ink. And that’s not just a technological choice, it’s also a content choice -- most of the stories are in a newspaper or newsweekly style, if sometimes a bit longer or thorough than most newspaper stories.

Number of St. Louis Newspapers Drops Drastically 1810-2010 Many EyesNumber of active St. Louis papers, by year. Click to interact.

The St. Louis Media Market, like many metropolitan media markets, is highly consolidated. Many German-language newspapers thrived from the period of 1800-1900, including the Westliche Post, which was considered one of the finest German-American newspapers of the time, and the first paper that Joseph Pulitzer worked for. Around the time the German newspapers began to fold (possibly due to “assimilation” or Anglicization), the number of newspapers in St. Louis reached a peak of about 78 papers, after which consolidation hastened.

Six major newspapers (Post, Dispatch, Globe, Democrat, Star and Tribune) became three major newspapers (Post-Dispatch, Globe-Democrat, Star-Tribune). One of those closed in the 50s, another closed in the 80s, so that by 90s, there was just one major newspaper covering the metropolitan area.

Despite a rise in niche publications (such as business and ethnic newspapers), consolidation remains high. The Post-Dispatch by far has the highest circulation of any St. Louis newspaper (207k). While there are other newspapers in St. Louis, no one category of newspaper has more circulation than the Post-Dispatch.

Newsroom consolidation is an inevitable consequence of newspaper consolidation. When the Post-Dispatch was purchased by Iowa-based Lee Enterprises in 2005, it bought out 130 of the P-D staff. Among those to take the buyout was 34-year veteran Sunday editor Margaret Freivogel, who wanted to do something to increase the city’s news coverage in spite of layoffs.

Newspapers of St. Louis by Type and Circulation Many EyesA tree map visualization of the St. Louis newspaper market. Shows how the market breaks down by circulation, type and individual publication. Click to interact.

Around that time, the Voice of San Diego and MinnPost were beginning their nonprofit operations. Freivogel modeled her vision after those newsrooms. She received a grant from the Pulitzer family, who committed $500,000 so long as the Beacon could raise $1.5 million of their own money. The site officially launched in 2009, and has been expanding its news content and its news staff ever since.

According to, generates 90,954 page views a month. It estimates at that level of traffic, the site could earn $571 a month in advertisements. For comparison, the Post-Dispatch receives 55 million page views a month, according to its Facebook page.

On being a nonprofit: relying on community engagement for your next meal

Community interaction through social media has been a goal of the Beacon since before it launched. It primarily uses the Public Insight Network, a database started by American Public Media. Readers are encourage to register in the network, and those registrants are asked questions about how a news topic has affected them, and what news topics they wish to learn more about.

The Beacon says this has two enormous benefits: it allows them to search for sources who are most relevant for a story, and helps them locate stories that might be under the local media’s radar.

“It’s to ask people to give information about what they already know and tell us what they’d like to know,” Freivogel said. “We used it both ways. Often times you’ll see that sources from the network have been used in our stories.”

Community interaction through partnerships helps the Beacon gain recognition. One of the longest, most continuous community partnership has been with the Missouri History Museum. Together, the Beacon and the Museum host town forums and lecture seminars on special topics.

The seminars focus on one topic for an entire year. In 2010, the topic was race relations in St. Louis. This year, the topic is class relations in St. Louis. Freivogel says it plays to the Beacon’s assets, particularly longer-form reporting and investigating beats that aren’t covered by commercial media, but are still relevant to the community’s well-being.

Said Freivogel: “We did what we do best, which is reporting on a subject and looking in-depth at something we feel like has a big impact on the community but wasn’t getting as much coverage that it deserved.”

How not to let money ruin your street cred

Sustainability is always one of the foremost goals of a nonprofit. In comparison to other nonprofits, the Beacon has a relatively wide range of options of how to fund its operation in the short and long-term. It is primarily funded by a handful of “big donors” (all of which are disclosed on the Beacon website -- and although the Beacon lists the ranges of the contributions, the exact dollar amounts are not disclosed), but is seeking to diversify its revenue stream in a number of ways.

Foremost, it wants to change from relying on major contributors to relying on more community with smaller donations. A common belief is that 20 percent of donors donate 80 percent of the revenue for a nonprofit, but Freivogel said it’s hard to rely on such large contributions from people year after year. Smaller, more dependable donors mean less revenue volatility over time.

“We’ll always be looking to donations, but we want to build up the number of small donations so we're not heavily dependent on large donors,” Freivogel said. “It’s far easier to sustain small donations than large donations year after year.”

Secondly, it wants to develop multiple streams of revenue besides donations. The Beacon is planning to use benefit concerts and other entertainment offerings to increase revenue. It’s also looking at producing book-length works of journalism and historical reference, which it would publish for money.

Freivogel said the Beacon will be seeking advertisers in the near future, and already advertises room for sponsorships on its website.

Objectivity has been a concern amongst critics who say that nonprofits might be subject to the political and ideological whims of large donors. Freivogel said she understands the concern, and that revenue diversification will help make sure that no one party has undue influence on the well-being of the Becon.

The concern is that the St. Louis community might perceive the Beacon as serving something other than the community: “We talk to all the donors about how the integrity of the journalism is really the most important thing and I think they understand that and realize that if we lose that, we lose our value to the community.”

Contenting with the outside forces, facing the competition

The Beacon also sees reporting on the outside forces that influences the community as a prerogative. To help with this, the nonprofit recently enlisted the help of a veteran journalist -- former longtime Washington correspondent for the Post-Dispatch, Robert Koenig.

“The Beacon is offering new perspectives in many areas, including the coverage of health care, the arts, and aspects of politics and government,” Koenig wrote in an email. “I was hired as the Washington correspondent last fall (Nov. 1) and I have tried to cover some news stories -- mostly with an impact on Missouri and Illinois -- that are not being covered well by other news organizations in the St. Louis region. I also have tried to bolster the Beacon's coverage of Illinois issues.”

The online news cycle has always been a challenge for all news organizations. The Beacon, for the most part, tries to ignore the pace of some popular blogs, preferring instead to sink time and money into comprehensive reports.

Said Koenig:

“When I worked at the old St. Louis Post-Dispatch (when it was still an evening paper), we used to joke that our news product's slogan should be: ‘Yesterday’s news, tomorrow.’ That, of course, has changed at traditional newspapers, where there is now more and more pressure to write blogs or file interim stories as quickly as possible. Here in Washington, the advent of Politico, The Daily Beast, and other fast-breaking news operations that are deploying many reporters to cover Congress and the federal agencies, is pressuring traditional news reporters to report “scoops” immediately rather than hold them for the newspaper deadline.”

But, he added, sometimes breaking news happens in Washington, and the Beacon publishes his work as soon as he writes it.