Nonprofit news remains 'heavily dependent on philanthropic funding,' study finds

Nonprofit news outlets have a lot in common with each other, but one thing they don’t have a consensus on yet is what the ideal funding pie chart looks like for long-term sustainability.

For a new paper published in Digital Journalism, Pace University associate professor Katherine Fink interviewed 21 nonprofit news leaders in 14 states across the country to understand their revenue preferences and whether they’d settled on “an optimal revenue mix.” All the news organizations represented in the study are members of the Institute for Nonprofit News, and Fink used INN’s member directory to find interview subjects for the study.

The study found that, while participants agreed they shouldn’t put all of their eggs in one basket (citing newspapers’ historic overreliance on advertising), there isn’t one common formula for success. Almost all said they didn’t have specific revenue diversity goals for their organizations. Just one participant said “his organization aimed for an even distribution among four revenue streams, which he described as institutional giving, major gifts, memberships, and advertising.”

Participants told Fink that diversifying their revenue streams wasn’t a priority and that their organizations lacked experienced staff to fundraise effectively. In 2024, 51% of revenue to nonprofit news outlets came from foundations, compared to 29% from individual donations and 17% from earned revenue, according to INN’s annual study of its member organizations.

“The nonprofit news organizations in this study remained heavily dependent on philanthropic funding — that is, grants from foundations and donations from individuals,” Fink writes. “That was even as nonprofit news leaders expressed interest in revenue diversification, and as they affirmed what prior research has suggested about the limitations of philanthropic support — suggesting slow progress over the last decade in the search for more sustainable business models.”

Instead, Fink found that participants preferred revenue streams that were “catalysts” for more money to come in; were aligned with the organization’s overall mission; or were renewable and reliable streams for multiple years.

During interviews for the study, all participants expressed positive experiences with one catalyst: NewsMatch, an INN-managed program that pools money from 18 major foundations and then matches individual donations to news outlets from that pool.

The publisher of one organization that had recently converted from for-profit to non-profit status said she believed pooled donor funds like NewsMatch had potential not just to incentivize donations from individuals, but also increase interest from some foundations that had reservations about funding journalistic initiatives. She said foundations that had turned down her appeals for funding had three categories of concerns. First, they said they lacked expertise to assess the value of news initiatives. Second, the foundations were concerned about perceptions that they might be trying to influence news coverage of causes and organizations they funded. Finally, she said foundations were concerned about potential liability if a news organization were to be sued. Participating in a pooled donor fund, she said, “creates a wall for folks that are worried about it.”

Study participants had mixed opinions on foundation funding. With the exception of NewsMatch, some respondents said foundations aren’t always mission-aligned with news organizations, they can be “fickle,” and grant requirements can be laborious. Others expressed preference for community foundations and raising money locally.

“I think that we still need to just keep focusing on how do we build money from our own communities, you know?” one respondent said. “Because I’m not waiting for somebody to come in and save us or to fund us. I think we just have to keep working at that.”

Read the full study here.