How Digital Startups and Nonprofits are Different

• DIGITAL STARTUPS
• A CONVERSATION ABOUT INNOVATION
• NONPROFIT MEDIA
• STARTING A NONPROFIT NEWS ORGANIZATION
• STUDENT PUBLICATIONS
• RESOURCES
• NONPROFITS

So far, we’ve discussed the delicate balancing act that newspapers are attempting as they transition from a print-only world to a multi-platform era of publishing.   The costs of printing and distributing a print product – once a barrier to entry for anyone who wanted to own and operate a community news organization– is a financial albatross in a digital era.  It is the still biggest disadvantage traditional newspapers have when compared with digital startups.  But digital startups and nonprofits face their own strategic challenges.

In this final series of lessons, which are designed to get you started on the path of renewal and reinvention, in Lesson 5 we'll begin by looking at the challenge of starting a new business – and how that plays out for both the for-profit and nonprofit digital sites.  Like community newspapers, the founders of new media enterprises must keep three plates spinning at all times.  These news sites must attract, retain and engage a loyal following of “readers” or visitors with the content that is provided.  The founders must also look to attract revenue to sustain the news-gathering effort.  And, at the same time, they must look to match expenses with current and future revenue potential.  Is it any wonder that entrepreneurs work long hours?  We’ll look at what we now know about sustainability of these news sites, which have proliferated in the last few years, thanks to new digital capabilities.

We’ll also look at how the digital revolution is affecting two “nonprofit” news organizations – college and high school newspapers.  Over the last century, these stalwarts have not only trained future journalists and media executives, but also provided a unique community service.  Like community newspapers, they are facing challenges with the digital transition.  In many ways, they are insulated.  But they have seen the future, and know they must adjust.

This section was written and reported by two students, enrolled in a business leadership course at the School of Journalism and Mass Communication at UNC at Chapel Hill.  Charles Duncan is a master’s student at Duke University. Cheney Gardner is a Morehead scholar and an undergraduate majoring in journalism and anthropology.

Digital Startups

While the Web has threatened the future of the traditional newspaper by providing the tools for creation, aggregation and distribution of content to anyone with a computer or smart phone, it has also led to a proliferation of digital news startups.

The definition of a “startup” ranges from academic – “a fledgling business enterprise” – to  abstract – “a state of mind” .  In this lesson, we’ll be defining a startup as a new business that has been created to solve a problem – better creation, aggregation and distribution of news and information.

Digital news startups have created a veritable cornucopia of content for a variety of specialized audiences.  There are sites for everything from hyperlocal news to specialized industries.   Here are two examples: http://www.arlnow.com/ and http://recode.net/. But with few barriers to entry and inexpensive online advertising rates (when compared to print), the market is very competitive. Those that survive – and make it to breakeven – will have managers with an aptitude for constantly evolving and refining their business model to match market demands.  They will be able to match audience interests with supporting revenue.  And they will match their desire for quality content with their ability to pay for creating and distributing it.

Here are some of the unique issues facing digital startups.

Is it possible to stand out in a crowded market?
The Internet has brought consumers a “profusion of choice” in outlets, formats and social media networks. But while this is good for consumers, it can make it hard for digital startups to stand out.

Carrie Brown-Smith at the Nieman Journalism Lab writes that, for digital startups to find their place in the expanding media ecosystem they need to create “a relentless focus on their customers’ problems.”   Startups that understand the needs of their community are going to be in the best position to carve out a place in the media market.

Eric Newton of the Knight Foundation elaborates on the importance of creating a strong community in an interview for “Empowering Independent Media.” When talking about the “Four Cs” of a successful media business model–content, connectivity, community and capital–he says, “Community engagement is key. The content must engage people, the connectivity must engage them, and when appropriate, they need to be asked directly for money to help.”  For digital startups, understanding–and being able to monetize–the community is crucial for sustainability.

How do digital start-ups make money?
It’s no secret that online advertising is struggling to overcome downward pricing pressures and continues to lag behind traditional print advertising. But digital startups can still become profitable by investing in diversified revenue streams that include, but do not rely upon, online advertising.

Kevin Davis of the Investigative News Network (whose full interview can be found here [INSERT LINK TO DAVIS video below]) encourages new media businesses to think about three different types of revenue: indirect, direct and ancillary revenue.

"Most journalism is indirectly supported – whether you’re advertising-supported, which is someone giving you money to reach an audience, or you’re foundation-supported, which is somebody giving you money to serve the community.

Direct revenue is the ability to monetize the community that you serve, whether that’s membership, subscriptions, paywalls, apps, or tickets to events. "

Examples of digital startups that have created diversified revenue streams includes VOX Media, which generates a significant share of revenue from profitable corporate sponsorships, and Vice, which produces and distributes a weekly TV show with HBO.

What are the drawbacks and advantages of being a startup?
David Carr of the New York Times writes, “While the barrier to entry is low, one big obstacle to long-term media success remains: quality.” With smaller staffs and less editorial oversight than traditional media organizations, it can be easy for digital startups to fall into the trap of thin or poorly reported content.

But while many startups have struggled to create high-quality journalism without a big news room or budget, it is possible. Startup organizations should remember that their size is also an advantage: being small means low costs, flexibility and an ability to react quickly and adapt.

 A Conversation About Innovation

Sara Peach is the associate director of the Reese News Lab, a media entrepreneurship lab in the School of Journalism and Mass Communication at UNC-Chapel Hill. The lab, founded in 2010, works with students and paid interns to develop viable ideas for start-up news and information companies. The program takes students from brainstorming to financial modeling to a final pitch with prototypes of their ideas. Here are excerpts from a conversation Peach had with Charles Duncan, editor and executive director of the nonprofit news organization Raleigh Public Record. 

Describe the process of deciding whether to launch a product.
At Reese News Lab, we work with students to develop a pre-startup plan, which is a period of intensive research where they think of an idea and figure out whether it is worthy of launching. There’s a five-step process that we use.

Step One is coming up with an idea. We work with students to brainstorm about potential ideas. We usually prompt them with really basic prompts; this semester one of the prompts was weather.  After they brainstorm (naming as many products as they can think of), they start to narrow down ideas.  They focus on ideas that nobody has done before, ideas that people would want and would actually make money–or at least that make enough money to sustain the project. Then each student in our group picks an idea to research over a weekend. Then they come back and each student pitches the idea and says, “My fellow students, I think we should spend a semester working on this product and here’s why.” The students then vote on which product they want to spend their time on researching. The vote is our way of narrowing our list of products to focus on to maybe two or three products to spend an entire semester on.

Step Two is exploring desirability.  Does anybody actually want or need this product? During that phase we have students talk to potential users and ask them questions like, “Have you heard of something like this before?” “Would you use this?” “Would you be willing to pay anything for it?” Their idea ends up changing a little, or a lot, based on feedback.

Step Three is when we ask them to start thinking about viability, meaning financial sustainability. At that point students start using spreadsheets to build a basic model of their costs and revenues. We ask them to actually base their estimates on real-world data, as much as they can. Students will come in and say, “Well, we think we’re going to have a ton of customers.” If they can say, “We looked at other similar apps that are doing something akin to what we are interested in and that app was able to get 200 users in the first month,” that’s a pretty good answer.

Step Four is the feasibility stage. This is actually one of the easier stages. Things usually fall apart around the viability phase. In feasibility that’s when we actually start building a basic prototype and do user tests.

Usually we ask them to start with paper prototypes. For example, a team last year worked on a service for delivering international news. By the end of the semester they had a really beautiful digital prototype, well-designed and with lots of different colors. But that’s not how they started. They actually started with paper postcards that they pinned to a corkboard. They took the corkboard around to show (potential users) and got their reactions to the concept.

The idea is that if students start with paper prototypes, then they don’t have to spend a lot of time building a prototype. They can get feedback really quickly about what people like and don’t like about the product, then crumple up that piece of paper and move onto another iteration.

Step Five is giving a formal pitch for the product where we bring people in– members of the public, media executives, venture capitalists. The students present their findings.  They succinctly explain what their research shows, and they make suggestions about how to move forward with the product. They also post reports online about their findings.

How do you go from academia to the real world with your products?
For some of the products that we at the lab think are worthy of further investment, we’ll say, “Let’s go ahead and launch this.” That’s happening right now with a product students researched last summer called Capital Hound, a product that will offer low-cost transcripts of everything lawmakers say during sessions of the [North Carolina] General Assembly.

Right now those sessions are recorded and the audio recordings are available on the Internet, but there aren’t any transcripts. They’re not searchable. If you want to know what happened during a session of the (North Carolina) General Assembly you either have to attend, or read a news article that summarizes some of what happened, or you have to listen to hours and hours and hours of audio recordings. With this product the transcripts will be searchable and also we are going to have an alert service. If you care a lot about what’s happening in Chapel Hill, you can sign up for an alert for the words “Chapel Hill.” The way it will work is anytime a lawmaker says “Chapel Hill,” you’ll get an email about that by the next day. That will have a link to the place in the transcript where “Chapel Hill” was spoken and you will be able to listen to the audio recording.

We’ve been able to find two groups of people who are actually interested in paying to subscribe to this service. Some journalists and news organizations are interested, as you’d expect, especially those that are smaller and not located near Raleigh. They don’t have resources to send someone to Raleigh.  There is another group of potential customers: lawyers and lobbyists, who have expressed interest in paying for the service. We have a sales team working right now to sell the product.

What would you say to someone thinking of starting a digital news organization?
One important lesson, especially for journalists, is that journalists come from the mindset of “wouldn’t it be cool if … ?” We come up with something really cool and we put our effort into creating it, and then we put it out there and hope that people will come. There’s nothing really wrong with that, and I think a lot of cool stories and products get created because we are dreaming up ideas that are creative and exciting. But we are asking students to come at these projects by talking to their audience first. We ask students to find out, whether this solving a problem for anyone.

The other big lesson is about financial sustainability. Think about who is going to pay for this? We are training students to think carefully about who might pay for their products – and how much.

Of course, one big difference between the lab and the real world is that students don’t have to take big risks. The students in class are going to get credit no matter what happens, even if their product fails. In the real world people decide not to take a salary for six months or invest large amounts of their own money into a product that they believe in. And, as we know, sometimes that doesn’t work out.

Click here for the syllabus and lessons on innovation used by the Reese News Lab.

Nonprofit Media

Nonprofit media have long been an important source of information on the local, national and international level, with examples such as NPR, and its affiliates or National Geographic.

However, in recent years, a new sector of online-only nonprofit news organizations has grown rapidly thanks to advancements in digital media and support from foundations investing in the future of community journalism. But without a clear path to sustainability, nonprofit media organizations need to invest now more than ever in diversifying their revenue streams and engaging their communities in order to survive.

Here is an overview of different issues facing nonprofit media organizations looking to achieve sustainability.

How does my organization become an official nonprofit?
For nonprofit organizations looking to get off the ground, the first decision is whether to apply for 501(c)(3) status. Although 501(c)(3) status allows organizations to gain access to private grant funding and receive tax-deductible donations, it requires significant time, money and legal paperwork. Even if organizations have the resources to apply, the turnaround time will likely be several months to a year.

Instead of immediately applying for 501(c)(3) status, consider instead working with a fiscal sponsor. Fiscal sponsors are 501(c)(3) nonprofits that temporarily sponsor projects that lack tax-exempt status. Fiscal sponsors will take care of bookkeeping and accounting in exchange for a small percentage of profits (usually 5 to 15 percent).

Finding an existing nonprofit that fits with the mission of a startup news organization is often the best route for a new site to get up and running. A fiscal sponsor takes pressure off the normally small team of founders so they don’t have to worry about accounting, payroll, paying taxes and other similar important issues.

To learn more about the process of becoming a 501(c)(3) official nonprofit, check out the IRS’s Tax Information for Charitable Organizations. Also, make sure to use resources that exist to support journalism, such as the Online Media Legal Network, which works provides start-up organizations with pro bono and reduced-fee legal assistance.

What’s the deal with foundation funding?
Foundations are often an important source of initial funding for new ventures. In recent years, foundation support for nonprofit media ventures has grown, and a 2013 Knight Foundation report found that from 2009 to 2011, a total of 1,012 foundations made 12,040 media-related grants totaling $1.86 billion. However, “the growth in foundation support for new media (Web-based and mobile) vastly outpaced the growth in support for traditional media (print, television, and radio).”

Nonprofit media organizations looking to apply for foundation funding should start by searching for private foundations, grant-making public charities and community foundations with an interest in local news. Make sure you understand the interests of a grant-making foundation or charity. The more you know about your prospective partner, the better you can tailor your proposal to fit their values and interests.

Once you have made contact with a grant-making foundation or charity, focus on self-sufficiency. According to a report by the Federal Communications Commission, “Foundation leaders provide seed money and hope not to provide ongoing operation support.” The more self-sufficient your nonprofit journalism organization is, the more likely it is to get funding.

Examples of private foundations and grant-making public charities that support community journalism include: John S. and James L. Knight Foundation, Ford Foundation, Bill & Melinda Gates Foundation, Atlantic Philanthropies, and MacArthur Foundation. For more information on grants, read this article.

However, many large foundations are redirecting their focus toward providing seed money to jump-start an innovation, instead of providing ongoing operational support for startups.   Therefore, you may need to seek funding from local, state and regional community foundations.

What’s the best revenue strategy for nonprofits?
Foundations that provide grants to startups typically expect them to quickly – within three to five years – develop their own sources of revenue. According to this story on nonprofit media ventures from the Knight Foundation, a well-functioning nonprofit media organization may start with foundation funding but is always looking for new and more sustainable sources of revenue. “It operates with the expectation … that philanthropic support will likely diminish over time and needs be supplemented with new sources, such as memberships, advertising, sponsorships, or events.”

Successful nonprofits must strike a balance between foundation funding, donations and earned revenue in the form of events, advertising, corporate sponsorships, syndication, subscriptions and service. Examples of nonprofit media organizations that have created  diversified revenue streams include the Texas Tribune, which generates a significant share of revenue from events and sponsorships; MinnPost, which has a tiered membership base; and ProPublica, which sells original data through a Data Store.

Check out this detailed list of possible revenue streams from the Investigative News Network, a nonprofit that works to help other nonprofit news organizations.

How do I differentiate my news organization?
Do your research and understand what problem you are trying to solve. Determine what your audience looks like. What does it want; what is it currently missing? What potential sponsors might find this audience valuable?  Remember that simply being thorough with your initial market research is not enough.  You need to continue tracking customer engagement in a variety of ways so you can make sure your analytics are producing results for your sponsors and advertisers and that you are serving your readers well.

Starting a Nonprofit News Organization: Reporters Know How to Do the Journalism; Paying for it is the Hard Part

Kevin Davis is CEO and Executive Director of the Investigative News Network (INN) (http://investigativenewsnetwork.org/ ), a consortium of more than 90 nonpartisan, nonprofit news organizations that produce investigative and service journalism. These are excerpts from a conversation with Charles Duncan, editor and executive director of Raleigh Public Record (raleighpublicrecord.org), an online-only nonprofit founded in 2008, with a focus on local government and community issues in the state capital of North Carolina.

What the Investigative News Network (INN) does.
INN is an organization that looks for the collective opportunity. We bring value around how we help more than one organization with a program or project.  For example we have a liability insurance program (to help) organizations that are under-insured or not insured.

We are focused a lot on sustainability. Most people equate sustainability or use it as (a synonym for) revenue, but, actually, sustainability is as much about costs as it is about revenue generation.  We are doing a lot of executive training, teaching journalists how to run businesses. We’ve put almost 100 organizations through CJET, which is Community Journalism Executive Training (a free program offered by INN, through a grant from the Knight Foundation).  We are moving the mindset from, “We’re in this to save journalism,” to “We’re in this to serve communities through journalism and create sustainable businesses.” That is a fundamental difference.

We are also doing a lot of technology support. We have the WordPress platform called Project Largo.  If you are an INN member, we do hosting for you and it’s completely free. It’s an open source system but it’s driven on best practices, particularly around long form journalism and multimedia. Right now, we have 52 organizations worldwide utilizing it, of which 22 are INN members.

We also do editorial collaboration. Initially, we had an editorial director and we tried to get people (in various nonprofits) to work together. It worked but it wasn’t terribly scalable, and at the end of the day we weren’t necessarily bringing in a lot of extra value. We’ve now gone bottoms up. What that means is that INN has a full-time person embedded at the National Institute for Computer Assisted Reporting. Her job is to procure data sets and help organizations localize from those data sets asynchronously. That’s working out to be much more effective.

We are also advocates for the nonprofit movement. I have testified in front of the FCC about the tax issues nonprofit newsrooms face. Really we are here to get information out and be a public voice for nonprofit, public service journalism.

The business models for nonprofit news organizations
(INN has) 92 members with 92 business models; everyone doing something slightly different, the commonality being the mission. I break it up into different groups. There are the national organizations like the Center for Public Integrity and Center for Investigative Reporting .  I think the Center for Investigative Reporting right now has a $12 million annual budget. It sounds very large but compared to the budgets at most major metropolitan newspapers, it isn’t that large. ProPublica obviously is another. These nationals are diverse and they are mainly foundation-supported.

Then we have regional players, or statewide organizations. For the most part, that’s proven actually to be very challenging. With the exception of the Texan Tribune, it’s hard for them (to have the resources) to cover a whole state.

Then we have the metro-area public service journalism outfits, like The Voice of San Diego or MinnPost.  They’re the ones leading the way on (the paid) membership business model. That model holds up well in affluent markets.

Then we have the startups, which are often one- or two-person shops.  And there are the vertical players. These are not geographically based, but subject matter based, such as juvenile justice, civil rights, product safety, education.

Just to summarize: I see three different types of revenues for all journalism organizations, not just nonprofits. You have indirect, direct and ancillary revenue. Most journalism is indirectly supported– whether you’re advertising-supported, which is someone giving you money to reach an audience, or you’re foundation-supported, which is somebody giving you money to serve the community.

Direct revenue is the ability to monetize the community that you serve, whether that’s membership, subscriptions, paywalls, apps, or tickets to events.  Ancillary revenue is basically everything from training, web services, info-graphic outsourcing– it’s all the stuff where we have skills and some capacity.

There few nonprofits that are diversified enough and have enough revenue to support the entire organization. The one exception is Texas Tribune, which has multiple lines of business– events, corporate sponsorship. They’re actually trying native advertising with a specific product now. (Texas Tribune is) well resourced, and as a result they are doing well.

Other places we’re seeing some experiments doing well, including the Voice of San Diego which has about 1,500 paying members. New England Center for Investigative Reporting  has a training business, focusing on training high school students and foreign journalists. Others are doing syndication, but syndication really is a loss leader to get the content out there to increase impact.

What makes for a sustainable business model?
There is no line of business that I know of that can be effectively managed when you are part-time. I say that because, unfortunately, so many of our members do 80 hours of journalism, and then, when their eyes are bleeding, they’ll try and do some fundraising.

Sustainability to me looks like an organization that has dedicated staff on the business side, the technology side, as well as the editorial side.  Sustainability looks like a strategy that understands the market you serve. There’s a business strategy, there’s a content strategy and there’s an engagement-marketing-social strategy. All three of those are equally important in a sustainable model.

Sustainability looks iterative. You think you can make money one way and then you have to be nimble enough to understand that maybe the money may be in a slightly different direction.   Sustainability looks like thinking less about being a news organization and being more and more like a technology organization and/or a community-based organization.

Sustainability is who you work for. You are either working for owners and shareholders on the for-profit side or you’re working for stakeholders on the nonprofit side. How you serve those stakeholders, how you report to your board– transparency– is tied to sustainability.

If someone is considering starting a nonprofit news organization, what would you want them to know?
If people are not willing to give you something for the content you produce, you have to question what value you are actually providing.

Do your research. What need are you filling? What problem needs to be solved? Do not go in thinking my job is to further investigative journalism. Look at how investigative journalism helps meet that need. It’s going to affect your product mix. It’s going to affect your monetization strategy. It’s going to affect your social strategy.

Have a plan. What are you going to need for the first two years, not three months? The notion of hanging a shingle based upon one grant and praying that somebody else is going to come in and save you after three months has proven to be unsuccessful.  If you see there’s a need but don’t believe you can monetize it, look at who you can partner with.

Two of our best and brightest organizations have merged with their local public media – St. Louis Beacon with St. Louis Public Radio, and The Rocky Mountain News with Rocky Mountain PBS and radio stations. Scale helps. Now, they have infrastructure and can tap into a larger pool of money.

I advise against well-meaning journalists going it alone. This is like starting a business. In fact, it’s even harder because you can’t go to a bank and get a loan. Furthermore, the foundations that help start organizations four or five years ago are no longer interested in funding startups.

Startups today actually have a higher barrier of entry offset by the knowledge that organizations like INN can provide. We can now say, “Here are the business models, here’s training, and here’s technology.”  So your cost of entry now has gone down. Your ability to understand what works and best practices have gone up. My question is: Are you going to listen?

Starting your own nonprofit truly requires entrepreneurship. It requires business savvy. It requires technology skills. If you don’t have that, you should probably think twice before starting it. But if you do have it, and you see an opportunity, learn from what we’ve done.  Put together a good board.  There are too many journalists who put together a board of journalists. They are focusing on prestige versus the leverageable assets of a board of advisors. That leverageable asset should be money, experience and a large network. In any business you’ve got to put the right building blocks together.

If you’re going to fail, fail quickly and pivot. What I’m saying to you is what I would say to a tech startup (because) we are effectively are digital technology-based information organizations. We aren’t replacement for newspapers.

Membership dues in INN for nonprofit news organizations range from $50 to $300 annually, depending on size and budget.   Click here for more information.   

Student Publications

Many future journalists get their first taste of the industry on a high school or college newspaper.  There are several business models for these publications.  Some papers are sustained wholly by student fees, which makes them dependent financially and editorially on their school’s administration.   Other papers are semi-independent, supplementing student fees with advertising revenue from local merchants. Still others are stand-alone nonprofit organizations that rely on a business model that is similar to the one used by for-profit newspapers.  Since they are free to readers, they must rely on revenue from advertisers, sponsors and events.

Since school papers typically serve a captive audience – the students, faculty and staff of an institution – they are somewhat insulated from dramatic market fluctuations.  But they also are experiencing – and being challenged by – many of the same economic and cultural shifts as community newspapers.  College newspapers, especially, were affected by the economic downturn of recent years and are dealing with the same readership issues – a younger generation that prefers to receive news on a digital platform.

In these interviews, two school newspaper “advisors” discuss the unique challenges and opportunities these media face.

A Conversation about College Newspapers

Chrissy Beck became the general manager of The Chronicle, Duke University’s student newspaper, in 2008. Before that Beck served as advertising director of The Daily Tar Heel for nine years.  She has just completed a master’s project that examines how various college newspapers are reinventing themselves for the digital age.  

What is the business model for The Chronicle?
We are an independent college newspaper, which means that we receive no funding from the university. For college newspapers, the amount of money received from the university varies widely. It could be half of your budget, or it could be as little as 5 to 10 percent. At the Chronicle, our financial concerns are much more like those of a community newspaper. We are completely dependent on advertising for our revenue.  Unlike community newspapers, however, we don’t have a huge payroll.  For example, we pay our reporters a token amount because this is more like an internship than a fulltime job.

Why did the Chronicle cut back from five to four days a week last year?
We didn’t do it for expense reasons.  Instead, we decided to do it to give the students more time to try new things with digital technology.  We also are preparing our readers, because eventually we won’t be daily. This is a way for us to cut one day and gauge its impact. We felt like we could do it without cutting revenue, and we haven’t. We were able to move all the advertisers to other days of the week or bump them up in ad size.

It was hard to decide which day to cut.  It had to be either Monday or Friday.  We decided to cut Friday because there are so many sporting events that happen every weekend on a college campus.  Monday is always one of our most heavily read editions.

Describe the Chronicle’s advertising market. Are you primarily reliant on local or national advertising?  On digital or print?
Our digital advertising at Duke is growing. We’ve doubled it in the last two years because we’ve put a lot of effort into it, but it’s still only 10 percent of our overall operating budget. That’s not enough to sustain us the way we currently are. Our hope is that it’s a gradual switch from print to digital and whatever else comes next.

There are only 7,000 undergraduates at Duke, and students tend to live on campus and stay close to campus.  There are a lot of course offerings here, so there is a lot of competition, with professors looking to fill the seats in their classes.  So we get a lot of advertisements for courses, as well as for clubs and other organizations.  About half of our advertising comes from campus sources like this, and half from off-campus businesses – restaurants, bars, apartments and hotels. And there’s a small percentage of national advertising.

Our budget has been as much as $1.5 million. It’s just over $1 million now. We definitely saw the downturn in 2008. It hit us all pretty hard. For most college newspapers, it was the sudden loss of national advertising.  Over the last decade, we’ve had as much as $250,000 in national advertising annually, and as little as $50,000. That’s a wild fluctuation. Local advertising has stayed pretty constant. Our budget did dip in 2008, but after a two-year dip we’ve stayed steady. We’ve made our advertising budget the last three years.   This is our new normal. We don’t expect to get much more than $1 million in revenue.

What’s the future of digital delivery of news and advertising for college newspapers?
As soon as the economic downturn hit, we started surveying students and advertisers for their preference. Ironically, our numbers don’t match up with what we think is happening in the rest of the world. The print product is still the preferred by students over the digital product. We don’t have registered users on our website, so it’s hard to pinpoint folks who are reading it. It seems a lot of out-of- town people are viewing it–alumni, prospective students, people who care about Duke sports.

For us, it’s about finding more and better products that meet students’ needs while getting our organization ready for whatever comes next. The move to digital helps us practice, to get ready to be a more nimble organization, to help us adapt to what comes next and own it. In practical terms this means helping employees adapt to change. You may be in charge of these three things this year, but next year we may get rid of one and add two new things. You need folks who understand that new mindset – that change is part of the deal.

We understand that the Chronicle needs to be a quality product if people are going to care enough to follow it from this device to this device to this device. We want to be there. The real challenges are still to come for college newspapers.

A Conversation about High School Newspapers

As director of the high school media program at the University of North Carolina at Chapel Hill, Monica Hill works with the states high school journalism teachers and students, helping them launch papers and improve their journalism.  Hill also operates the N.C. College Media Association, which organizes an annual conference and workshop each year for college newspapers in the state. 

How do you see high school newspapers making the switch to digital?
The print newspaper is not leaving our high schools any time soon. I find that students appreciate the print products. Advertising support has changed certainly since 2008, but advertisers are still supporting that outlet.   It’s important to figure out how online and print co-exist, and support one another.  High school newspapers are generally published once a month and are very feature-focused publications.  An online site offers high school papers a way to cover breaking news.

A good example of a journalism program that is combining the best of print and online is the newspaper at First Flight High School in Manteo, North Carolina. They had a broadsheet newspaper and switched that broadsheet to a monthly news magazine format. The teacher in charge of the program created an independent website for the school.  The print news magazine is distributed with the local paper.

How do high school newspapers bring in revenue?
When I travel the state and hold workshops, I share the stories of what other teachers havedone to raise funds.  I think networking is incredibly important to high school journalism. That’s why teachers come back year after year to these workshops because they really want to hear these success stories.

We talk about opportunities to work with associations in the school, like the parent- teacher associations. We constantly talk about advertising. Teachers have all sorts of different approaches for teaching students how to sell ads. Some have a business staff; some incorporate business lessons into the journalism curriculum.

Fundraising can also be a big opportunity for school newspapers. One school had a concert featuring bands at the school. It was a large event for that school and a huge responsibility for that newspaper staff. It also paid a huge printing bill.

What drives the costs of high school newspapers?
Most of the time the school will provide resources like computers, although, when you get into things like cameras, those costs can get quite high. For the most part, the biggest expense is printing.  And printing costs vary a great deal.  In Asheville, the Citizen-Times used to print every high school newspaper in the city for free. That was not uncommon in some communities not too long ago. It was a service that local newspapers in some communities really embraced.

High school newspapers provide a tremendous service in most communities. In Alabama, for example, there was a program run by the University of Alabama which provided grants to high school newspapers across the state that served communities that did not have newspapers. Those high school newspapers would have wedding announcements and obits, just like a local community newspaper.

At the end of the day, most high school newspapers are providing a community service, as well as a terrific learning opportunity for students.

Resources

Digital startups

The Four C’s –  Eric Newton with the Knight Foundation explains what a community news organization needs to be successful: content, connectivity, community and capital.

Searchlights and Sunglasses –  An e-book by the Knight Foundation’s Eric Newton on the evolution of journalism in the digital world.

LION Publishers – An association of Local Independent Online News Publishers. The organization aims to foster the viability and excellence of locally focused independent online news organizations and cultivate their connections to their communities through education and action.

Startups Need to Address Real Needs, Neiman Journalism Lab -  Carrie Brown-Smith predicts which factors will determine the success of startups in 2014.

The Transition to Digital Journalism, UC Berkeley Graduate School of Journalism - A database of trends within the digital media market and list of digital sites that have attained significant market share in the media ecosystem.

What Is A Startup?, Forbes -  Natalie Robehmed attempts to define the buzzy and often amorphous term.

4 C’s of Successful Community Media, National Endowment for Democracy’s Center for International Media Assistance - Eric Newton talks about content, connectivity, community and capital, and the role they play in a successful business model.

Nonprofits

Investigative News Network -  INN’s mission is to help nonprofit news organizations produce and distribute stories with impact; to achieve cost efficiencies by pooling resources and services; and to develop new revenue streams that will help member organizations become sustainable, mission-driven, nonprofit businesses.

Finding a Foothold: How Nonprofit News Ventures Seek Sustainability –  A report from the Knight Foundation on how nonprofit news organizations are working toward sustainable business models.

Growth in Foundation Support for Media in the United States –  A 2013 Knight Foundation report on foundation support for media organizations. The report finds that between 2009 and 2011 foundation support has been growing, but is inconsistent.

The Information Needs of Communities: The Changing Media Landscape in a Broadband Age, Federal Communications Commission -  Steven Waldman looks at how technology will change news media and how it can be used to fulfill the essential need for community journalism.

Non-Profit Journalism: Issues Around Impact, A White Paper from ProPublica - Focusing on the ProPublica, a Pulitzer Prize-winning nonprofit media organization, this paper measures the potential of journalism, especially nonprofit journalism, to create change and reform.

What Journalists Need to Know About Starting a Nonprofit Business, Poynter - Mark Briggs discusses the different revenue option models available to nonprofit media organizations.

Finding a Foothold: How Nonprofit News Ventures Seek Sustainability, Knight Foundation - This report details the different ways nonprofit media ventures seek and allocate funding, paying particular attention to how it is used to cultivate greater audience engagement.

Funding Resources: Foundations, Foundation Center.

What’s Next for Nonprofit Journalism?, Pew Research Centers Journalism Project - Jesse Holcomb breaks down major points from a 2013 roundtable discussion co-hosted by the Pew Research Center and the John S. and James L. Knight Foundation that focused the future of nonprofit journalism.

Nonprofit News Sites Need to Act More like Digital Businesses, Knight Blog - Mayur Patel and Michele McLellan explain why nonprofit media organizations need to act like “digital businesses” by prioritizing “revenue experimentation, entrepreneurship and community engagement.”