The Pew Research Center released a new study on Monday that found that nonprofit journalism is "growing but fragile." While the number of startup nonprofit news outlets continues to grow, many struggle to establish long-term financial stability, instead relying on foundation grants to survive.
Pew surveyed 172 active nonprofit news sites created from 1987 to 2012, funded by a variety of sponsors and groups. The survey identified nonprofit news outlets in all but nine states. The outlets concentrate on investigative journalism (21 percent), government (17 percent), foreign affairs (13 percent), and other niches like the environment, health, and arts and culture.
“At one level we wanted to be able to examine these as a collective unit, as people have begun talking about them as a more longer-term element of the news landscape,” said Amy Mitchell, acting director of the Pew Research Center’s Project for Excellence in Journalism. “The other was to examine very closely their financial structure and the degree to which they seem to be situated for long-term sustainability.”
Half the news outlets surveyed reported that 75 percent of their revenue comes from grants, a business model that may not be sustainable in the long-term. Of the survey respondents launched by a startup grant —often a substantial sum, up to $100,000—only 28 percent reported that the grant would be renewed.
Just one third of the outlets surveyed are independent. The study found that most of the independent outlets have at least three different revenue streams, including foundation backers, contributions from readers and media partnerships.
Because of their financial structure, nonprofit news outlets face minimal staff with insufficient business skill and modest budgets that provide insufficient resources.
“Part of what we hear is the extent to which there is a strong sense of uncertainty about how to manage,” Mitchell told Poynter. “They say ‘We don’t really understand — we’re getting mixed messages.’”
Of the outlets surveyed, 78 percent reported having five or fewer full-time staffers and 26 percent have none at all. Fifty-four percent reported being understaffed in the business, marketing and fundraising sector, while 39 percent identified editorial staffing as the more urgent need. Sixty-two percent named "finding time to focus on the business side of the operation" as a major challenge, while 55 percent struggle because of increased competition for grant money.
Mitchell told Poynter that seven of the participating sites went out of business or merged during the six months it took to complete the study.