Over the past few years, foundations and philanthropists concerned about newspapers’ declining fortunes have put up millions of dollars to launch non-profit online publications covering national affairs (ProPublica), statewide topics (Texas Tribune, Wisconsin Watch, MinnPost, California Watch) and metropolitan areas (the Bay Citizen, the Chicago News Cooperative, St. Louis Beacon).

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These new "watchdog" organizations have produced some distinguished journalism — ProPublica, in fact, won the Pulitzer Prize for national reporting earlier this year. But three separate research reports, released in the past two months, make clear that great journalism isn’t going to be enough to keep most of them alive — neither are the foundation grants and large individual donations that got them off the ground.

Non-profit news organizations will survive only if they find and build a community: Identify people who believe in their mission, engage them online and in person, and make them want to provide financial support.

This is not a new model. It’s pretty much the same thing that public television and public radio have done for decades. But the recent research reports suggest that most of the new non-profit news startups have made only a little progress in this area.

"Getting Local: How Nonprofit News Ventures Seek Sustainability" was a report published last month by the John S. and James L. Knight Foundation. It provides a detailed review of seven non-profit news sites and suggests several key ingredients for success:

  • A business development strategy and the capacity to execute it
  • A high level of audience focus and efforts to build community engagement
  • Technological capacity to support and track engagement

A second report — "Online Journalism Enterprises: From Startup to Sustainability" — comes from the Renaissance Journalism Center at San Francisco State University. Based on a survey of 32 online journalism startups, the authors conclude:

Grants are getting harder to come by for existing sites. Two-thirds of the study respondents said they are at or approaching a crossroad where it is getting difficult to secure a second or third round of grants or financing.

The third report — "Nonprofit Watchdog News: What’s Working?" was published earlier this month by a team of journalism master’s students from the Medill School at Northwestern University. The students are enrolled in Medill’s Community Media Innovation Project, for which I’m the lead instructor.

The students identified eight “lessons from non-profit watchdogs” that other sites might emulate to maximize their impact and sustainability. Several of the key lessons relate to building a community and generating financial support from individuals:

  • Build audience connections and revenue through in-person events
  • Reach out to readers for story ideas and content
  • Diversify revenue sources, with a focus on small donors

DIVERSIFYING REVENUE

Most of the sites described in these reports were able to launch thanks to grants from foundations or donations from a few generous philanthropists. But only a few of them have made substantial strides toward diversifying their revenue sources.

Two organizations that have made significant progress toward financial sustainability are MinnPost and the St. Louis Beacon. These sites have differentiated themselves from other non-profit startups by focusing from the beginning on building a diverse set of revenue streams.

Joel Kramer, founder and CEO of MinnPost, told The New York Times last year that he wanted MinnPost to be financially self-supporting by 2012. "I have a very aggressive definition of sustainability, which is that we have enough revenues to survive without foundation money,” he told the Times.

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MinnPost brought in more money than it spent in 2010, and relied on foundations for just 36 percent of its $1.28 million in revenues, according to the Knight report. Almost 40 percent of its revenues came from individual donations or ticket sales for its annual MinnRoast event. As of March 2011, MinnPost had 2,400 paying members, the Knight report said.

Like MinnPost, the Beacon has built in-person engagement through events, including community conversations about race and monthly "Beacon & Eggs" breakfast panel discussions. Almost 60 percent of its $2.2 million in revenue in 2010 came from individual donations, the Knight report said. On the Beacon’s website, the organization emphasizes its growing community of contributors by highlighting individual donors on every page with messages like "Charlie backs the Beacon." There’s even a separate "I Back the Beacon" page with profiles of individual donors.

There’s no guarantee that any of the new non-profit news organizations will survive. But MinnPost and the St. Louis Beacon seem to be pointing in the right direction.