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A Nonprofit Grows in Chicago

Welcome back to yet another edition of the NewStart Alliance, and a special welcome to all of our new subscribers, including Tolu, Jess, Maura, Paula, Al, Chet, Brian, Georgia, Jordan, Tom and Greg. We're glad you're here! Now on with the show...

About a year and a half ago, four weekly community newspapers in the Chicagoland area began the transition from a for-profit business called Wednesday Journal Inc. to a nonprofit called Growing Community Media.

I talked with editor and publisher Dan Haley this week about how the transition has been going, and what lessons others can learn from his company being perhaps the first for-profit, legacy print community news publication in the country to make the switch to a nonprofit model.

First, some of the backstory.

Haley was one of several founders of Wednesday Journal Inc. in June 1980. They didn’t have the luxury of relying on what Haley calls “family money,” so they quickly realized they needed to find a way to fund their journalistic endeavors. To do that, they got creative, and sold shares of stock in the company to people in the community. About a year and a half later they had about 70 to 80 shareholders who ponied up about $1,000 each, and the publication found itself on solid ground and rooted in the community.

Eventually the company grew to seven weekly newspapers and several other publications, including Chicago Parent magazine.

But, as is the story for many community newspapers across the country, things changed. Print advertising shrunk, digital revenue wasn’t enough, staffing diminished and by 2019 the company was down to four weeklies.

Something had to change.

“We were either going to run it down to the ground over the next couple of years, or we were going to reinvent it,” Haley said.

Luckily for the communities they cover — Chicago’s West Side, Oak Park, River Forest, Forest Park, Brookfield, Riverside and North Riverside — they chose the latter.

After researching options, Haley landed on the nonprofit model. From there, the first thing Haley did was go to the remaining shareholders in the company and explain the situation. The company has done well over the years, it made money and it paid dividends. Now he was asking them to donate their shares to the new nonprofit entity.

“To their credit, all of the dozen shareholders signed on to that,” he said, adding that they did receive tax benefits from the donation of the stock.

Then came the inevitable task of getting the nonprofit status from the IRS. After receiving a lot of advice from accountants and lawyers on the paperwork (and one math error on the application that had to be fixed), it took about four months to get approved.

From there, it was all about figuring out how to reimagine the business model for a nonprofit newsroom — and, of course, doing so during a pandemic.

The nonprofit status gives Growing Community Media another revenue stream to tap into. They are focused on selling more ads, increasing paid print subscriptions, creating more digital revenue opportunities (they do not have a paywall and do not plan on adding one), and now they’ve added philanthropic donations. Those donations range from someone adding an extra $2 to a current print subscription renewal to up to $1,000. There are also some high-level benefactors who have added much to the bottom line.

Haley said having that additional revenue stream was critical for the organization over the past COVID-impacted year.

“Is this going to work? I think so. I’m not positive. Is it the best option we had? Absolutely,” Haley said. “We had a considerable amount of success stabilizing ourself and growing our newsroom after years of declines. We can invest more money in our newsroom. That’s been the pitch all along to readers and donors. That’s certainly the message that people want to hear.”

And that’s a message Haley and his team are trying to get better at conveying to the community, especially if they want to double the number of folks who can make an annual donation and increase support from community foundations.

Haley has been the one to make a lot of the calls to ask for contributions. He said it is a huge cultural change to be comfortable enough and passionate about what his team is doing to ask someone to make a donation. But, he added, he’s been “surprisingly comfortable” doing it.

“I certainly have sold a lot of ads over the years and sponsorships,” he said. “I’ve been comfortable making the asks. My failing is that I’m not always sure how much to ask for. That’s something I need to get better at. Asking for 20 bucks or 20,000 bucks. I will get better as I go along.”

Along with the uneasiness that comes along with an entirely new business model comes the realization that the move appears to have paid off. In fact, he said some local journalism funders in the Chicago area have been intrigued by Growing Community Media’s hybrid approach, since it combines advertising, subscriptions and philanthropy and is not overly reliant on donations alone.

So far, that diversification has been a source of strength.

“We’re stable. We are operating this year at a little better than break even. That’s great and better than anticipated,” Haley said. “I think this model is going to work.”

Cool Job Alert

I meant to include this next update last week, but you know how it goes when you get old...

You may remember our spotlight on another nonprofit, Foothills Forum, from just about a year ago. They're doing wonderful things in Virginia in partnership with the Rappahannock News. Some of you might have said at the time, "Hey, that sounds really cool. I'd love to work at a place like that."

Well, here's your chance.

The Rappahannock News is currently looking for a Regional Editor. Here's a portion of the job description:

Time for a change? Tired of corporate uncertainties and cutbacks? Want to focus on true local journalism in an environment where reporting about our communities is the top priority? Our locally owned media company has a unique opportunity for the right candidate.

We're seeking a hands-on regional editorial leader to be the editor of the weekly Rappahannock News in Washington, Va., and supervise its sister paper in Culpeper, Va. Located just 65 miles from Washington, DC, Rappahannock County is a rural oasis, filled with interesting people and amazing stories. We’re looking for a guru with experience to write everything from local government meetings stories to features — and shape the publication’s editorial report. The editor is a primary face of the newspaper in an engaged, vibrant community.

Sound intriguing? Of course it does! Head over here to find out more details and to apply.

NewStart Update

If you're in Colorado or Kansas, you really should join Elizabeth Hansen Shapiro, who is the CEO and Co-Founder of the National Trust for Local News, and me this afternoon at the 2021 Colorado Press Association/Kansas Press Association Convention for a session on "Succession Planning for Owners and Newsroom Leaders." It should be a great session. (For more info and to register you can go to this page and make my head spin.)

I'd be remiss if I didn't mention that we're coming down the wire for folks to join our second year of the NewStart program. The next cohort will start at the end of June. So if you're interested in earning a master's degree in Media Solutions and Innovation and learning how to purchase and run a successful publication using sustainable business models, now is the time to join! Head here to learn more.

Oh, and one more thing. This is usually where I plug our Facebook page, but I took a glance at our Twitter account today and we're just five followers away from 500. So head on over there and give us a follow so we can eclipse the 500 mark before we head into the weekend! Thanks!

Quick Hits

Here is a lot of informative news from around the world of local journalism. Enjoy!

Learn:

The subprime attention crisis, by Medialyte

"The book captured my interest because my reading of it coincides with larger, more existential questions about the future of digital advertising. Cookies are disappearing, Apple is letting customers opt out of tracking, and the public has begun to sour on the notion that everything is better at scale. In what could be a stroke of good fortune for some publishers, these changes have led to an increased focus on 'contextual advertising,' or good old fashioned 'Your brand is cool, we want people to think we’re cool, so we want to put our logo on your site' advertising."

CNHI's first purchase in 14 years brings fresh attention to its recent contractions; news VP Ketter says it's stronger now, by The Rural Blog

"Community Newspaper Holdings Inc. made 'its first acquisition of a newspaper in 14 years . . . after a dramatic contraction that included the closure or merger of 16 of the company’s papers since the start of the Covid-19 pandemic,' Dan DeWitt reports for the Brevard NewsBeat in western North Carolina. DeWitt competes online with The Transylvania Times of Brevard, the paper CHNI bought this month.

Axios is the latest media company to try to make money from local news. History is not on its side., by Washington Post

"Axios, the Washington-area-based national politics site, says it will establish online newsletters focusing on news in eight places this year, with a goal of expanding to 50 by the end of next year. The initial list comprises D.C.; Atlanta; Chicago; Dallas; Philadelphia; Columbus, Ohio; Nashville; and northwest Arkansas."

How to gain 1,000 new Instagram followers in two weeks on a small budget, by Indie Publisher

"In anticipation of The Resolve’s launch, we at Indiegraf were tasked with finding and building an audience of potential readers on social media. We decided to focus our limited budget on Instagram. In less than two weeks, we grew our audience on that platform by 1,000 new hyper-engaged followers."

To navigate all the junk on the internet, you need powers of critical thinking — but also critical ignoring, by Nieman Lab

"Learning to ignore information is not something taught in school. School teaches the opposite: to read a text thoroughly and closely before rendering judgment, with the implication that anything short of that is rash. But on the web, where a witches’ brew of advertisers, lobbyists, conspiracy theorists, and foreign governments conspire to hijack attention, the same strategy spells doom. Online, critical ignoring is just as important as critical thinking."

MDIF Ventures to invest $1 million in young independent media companies

“We’re looking for the next generation of mission-focused media entrepreneurs,” said Mohamed Nanabhay, Deputy CEO of MDIF. “While there has been a lot of gloom around media business models, at MDIF we believe that despite tough media markets, there are opportunities for entrepreneurial operators to build media companies that are high impact and sustainable."

Launched on May 18, the JTI online platform represents new dawn for media integrity, transparency and sustainability, by Reporters Without Borders

"Reporters Without Borders (RSF) launches new web offer designed to identify and reward trustworthy news sources; Media outlets can use the online app to check, disclose and promote compliance of their editorial processes with best practices; The initiative represents a radical and innovative step forward in the battle against disinformation."

Freedom of the press comes at a cost. But who’s going to foot the bill?, by The DePaulia

“People are beginning to feel the absence of good media,” Herrera said. “The hope and the optimism is that we can push back against this kind of oppressive, monolithic, corporate-driven media culture where there’s only a set number of approved perspectives, and we can find our voice again [sic] around shared interests and around shared beliefs.”

How New York City Is Saving Its Local News Outlets, by The New York Times

"At a time when newsrooms nationwide are laying off reporters and some are closing down, a program begun by Mayor Bill de Blasio’s administration has been helping to sustain small, independent media outlets in every corner of the city."

Thanks!

That's all for this week.

You can follow NewStart on Twitter @wvunewstart (Drive for 500!), and you can @ me @jimiovino. You can follow us on the Facebooks here.

Interested in supporting our students in Year 2 and beyond? I'd be happy to talk! Wouldn't it be great to offer more fellowships and scholarships? You can help!

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Thanks again, stay safe, and we'll talk soon.
Jim.