Pew: Nonprofit news sites are growing, but where’s the business model?

A new Pew report on the state of nonprofit news sites finds that the owners of these sites are optimistic about their future — but are also concerned about finances, since many of the sites operate on initial grants that may not be renewed. And most outlets raised less than $500,000 in 2011.

“One clear takeaway from our new survey is that many of those running nonprofit news outlets do not feel sufficiently equipped to manage long-term business needs,” Amy Mitchell, the study’s coauthor and acting director of the Pew Research Center’s Project for Excellence in Journalism, said in a statement.

Here are a few of the report’s findings:

Nearly half the sites launched during the recession

Of the 172 outlets that Pew identified (it limited its study to “primarily digital” sites launched in the last 25 years), nearly half were launched between 2008 and 2009, with around a quarter starting up since then.


“The majority of outlets limit their reporting efforts to a state (38 percent), a city (29 percent) or a smaller community or neighborhood (8 percent),” Pew reports. “Many of them are clustered around big population centers and the coasts. Still, all but nine states have at least one nonprofit news organization, according to the Pew Research audit.”

Coverage: Niche topics, few long-form stories

Pew finds most of the sites have “niche orientations — they focus on one topic or type of reporting.” Twenty-one percent of the sites, for instance, focus on “investigative reporting,” along with topics like government (17 percent), public affairs (13 percent) and the environment (4 percent).

Stories tend to be “straight news accounts” of 500 words or less; long-form journalism is less common, and opinion pieces and non-text stories (like databases and video) were rare.


Pew also found overall editorial output to be “modest”: “The website audit found that close to half (44 percent)  of the nonprofit outlets examined produced 10 or fewer pieces of original content in the two-week period studied.”

Most outlets pulled in less than $500,000 in 2011

Seventy-seven of the outlets Pew surveyed disclosed their revenues in 2011 (the last full year that data was available):


Pew finds that “most of these outlets get off the ground with the help of seed money-startup grants from foundations, often coupled with donations from wealthy individuals.” The initial grants are often large — 37 percent of them were for $250,000 or more — but they’re often not renewed.



Pew finds that “just because an organization receives a large seed grant does not mean it will raise a lot of additional revenue…seed grants may help an outlet get up and running, they don’t seem to help long-term sustainability.”


Fundraising gets pushed aside, but nonprofits are optimistic

Pew describes an “economic catch-22”: Many nonprofit sites

“don’t have sufficient business-side resources to develop the revenue streams that would help them hire the business employees needed to help achieve financial sustainability. At the same time, they may feel pressure not to devote resources to raise revenue because of a nonprofit culture that prizes spending on services over business development.”

It’s a problem for small sites but for larger ones as well: “One organization with 10 full-time employees and annual revenues of nearly $900,000 declared, ‘We need to invest in a business staff that can sustain a business model.'” And another outlet with over $5 million in annual revenue said “finding new donors and new revenue” was “the biggest challenge to its financial health.”

Nonetheless, nonprofits are optimistic about their future and 90 percent said they expected to maintain or increase staff in the coming year.


However, getting to that future will require new funding sources. “All experimentation welcome,” one survey respondent wrote.

Full study here.

Photo courtesy of Shutterstock / Africa Studio