 Welcome to The Future of Democracy, a show about the trends, ideas, and disruptions that are changing the face of our democracy. I'm Ashley Zahn, Vice President of Learning and Impact at the Knight Foundation. Before we get started, I want to take a moment to explain why we at Knight Foundation believe that these conversations are important. The Knight Brothers believe that a well-informed and engaged community is essential to a well-functioning and representative democracy. Non-profit newsrooms are becoming an increasingly important part of how we become informed in our communities. They aren't new. An article at the end of last year by Mark Glazier points out that public media honed crowdfunding long before Kickstarter and Indiegogo. And for decades, organizations like the Center for Investigative Reporting and the Center for Public Integrity have demonstrated how impactful the non-profit news model can be for deep dives into important topics. Knight Foundation has been investing in these developments in the non-profit news field and writing about its evolution. We'll share in the chat a link from our archives from 2013 when we were already studying the field. Today, we're talking about the latest trends in non-profit news. In particular, we're going to talk about a report from the Institute for Not-for-Profit News called the INN Index, an important barometer of what's happening in the field. And we'll talk about how these trends are showing up in newsrooms across the country. Today I have two incredible guests. Emily Roseman is the director of research at the Institute for Not-for-Profit News, a national network of non-profit, non-partisan news organizations. And Loretta Chow is vice president of strategy and startups at the American Journalism Project and her team works on incubating non-profit news organizations and understanding local news ecosystems. So welcome both of you. I'm so excited to have you both. Before we dive into far, Loretta, can you tell us a little bit more about AJP and what your team does? Sure. Thanks for having me. AJP is a venture philanthropy organization that is dedicated to sustaining local news. So we do that in a few different ways. We make transformational grants to local non-profit news organizations. We also provide venture support, including incubating startups. And we partner with local philanthropy organizations to make investments in their communities and assess what the community information needs that they should be investing in are. Excellent. Thanks. And Emily, tell us a little bit more about the Institute for Non-Profit News as well as the INN Index. Yeah, sure. So thanks so much for having me. The Institute for Non-Profit News, or we also call it INN, is a network of over 300 non-profit non-partisan news organizations across North America. And my job is the research director for INN. Our big research initiative each year is called the INN Index, which Ashley has mentioned. This is our annual deep dive survey of all of our members that we then turn into a pretty comprehensive report on the state of non-profit news each year. We've been doing it each year since 2017, but this year's index results for perhaps the most exciting yet. Excellent. So yes, let's hear about them. Tell us what are the kind of three most important things to know out of this year's index report? Yeah. So heading into this report, we didn't know what to expect after just a year of crises. We were curious if we would see the field grow or retract. And overall, we pretty much saw growth on almost all measures, which was pretty astounding. First, we saw staffing projections across the field. So employees and leadership, those numbers actually grew in 2020. Secondly, with this incredible demand for news, we actually saw coverage expanding and audiences swelling to non-profit news. I have here a stat. Web traffic grew by 43%, which is just astounding to me. And then thirdly, we actually saw total revenue grow for non-profit news outlets. Close to two-thirds of outlets that we studied grew their overall bottom line last year. Things largely due to foundation support and individual giving dollars. Great. That's really great news. We'll dive into, I think, each of those pieces in a little bit. But Loretta, you spend a lot of time with nonprofit news organizations. So Emily shared with us the data. Tell us what this looks like on the ground and what you're seeing in the newsrooms that you work with. Sure. I mean, it really feels like we are in a historic moment for nonprofit news. It's like this combination of the need just going from a major concern to crisis levels of people needing information on how to survive the pandemic, how to thrive in their communities. And at the same time, there's a lot of philanthropic attention to those needs and how journalism plays a role in communities, too. And that really has led to, I think, this boom in people wanting to start organizations, join organizations, fund organizations. And we're seeing that in our work at AJP in terms of the applications that we're getting and proposals for organizations and in the sort of new startups that we're incubating right now. And we're also just seeing this sort of swelling of support from people who are just really grateful to have verified facts that they need to survive right now. So we're seeing a lot of that in all ways as you guys are talking about. Absolutely, for sure. And both of you kind of hit on startup news organizations. So I'd love to hear a little bit more about that. Emily, what are we seeing in the data in terms of how many organizations are starting up and how those trends are moving? And then Loretta, I would just love to hear about a couple of great startups. So Emily. Yeah. So startups are definitely one segment to kind of watch here. So about a third of INN's members, we have a little over 300 members, and about a third are less than five years old. Or to put it another way, which is kind of a mind boggling way to reframe it, a third of the nonprofit news outlets publishing today did not exist five years ago. So that's just such an incredible sign of growth. And we're also seeing the pace of those startups accelerate year to year. So on average, we see about a dozen or more startups launch each year. This has been going back to 2008 or so. There have been 26 launches in 2020 so far, sorry, 2020, and then another few in 2021. So we're seeing this kind of growth continue. And then I'll just mention a few quick stats about startups. So startups typically have smaller staffs and modest budgets. Most startups are local news outlets, which is interesting. Startups we're seeing are also leading the way in terms of racial diversity. Half of all INN member news outlets that are led primarily by people of color launched between 2017 and 2020. So I'll leave you with that fact. Yeah, no, that's fantastic. So Loretta, tell us about some of these nonprofit news startups. Why they're starting, how they're doing. We'd love to hear some examples. Sure. Well, just to name a few that we're working with, Mound State Spotlight in West Virginia was founded and then started publishing all within the course of the pandemic before their team had ever worked in an office together. Actually, they have yet to. So that's sort of one example. We're working with Capital B, which is soon to launch. But it is going to be a national network of newsroom serving black audiences with local news. And the really exciting sort of, and I think Mark's a trend is in Kansas. The Wichita Community Foundation just made a really historic investment in the Beacon. And it's going to be, which is also soon to be launching an independent newsroom in Wichita. So that's just like, I think what that really highlights is sort of all the various ways that people are coming into the startup world. But yeah, that's fantastic. Can you tell us a little bit more about the backgrounds of people who are starting nonprofit newsrooms or what brings them to make this leap? So what's really interesting is that they come from a lot of, I mean, many come from their talent from commercial newsrooms. Capital B, for example, was founded by two women. One who was, you know, Lauren Williams was EIC at Vox. And Anacodo, who was the managing editor at the Trace. And so nonprofit for profit, but coming together and really seeing that, you know, what throughout their careers, they saw this need that wasn't being met. No one was really stepping in to do it. Commercial models really weren't structured in a way that was putting them on a trajectory to do the job. And so that's why they started to do that. You know, in other cases, there's a lot of people who come from local news already who are just, you know, these papers are cutting costs in a way that just makes it untenable to do the sort of accountability and beat reporting and just, you know, original information gathering that needs to happen. And in a lot of ways, never really served all the communities in their sort of constituency. And so people are coming out and saying, like, well, what can we do to address that? That's fantastic. So, you know, a big thing, you know, when you're starting a newsroom, a big thing you have to think about is how am I going to get revenue? So, Emily, tell us a little bit about some of the trends that we're seeing and how the different nonprofit newsrooms are using different revenue models. And then I'd love to hear from Loretta about how AJP supports revenue generation. So, Emily? Yeah, yeah. So that's a great question. And definitely one we're looking at carefully each year with the index. So fairly consistently year-to-year, the nonprofit news revenue pie usually breaks down like this. There's kind of a little less than half in foundation funding. That's a mix of national and local foundations. More than a third, about 36% in individual giving. So that's gifts from major donors, small-dollar donors, membership programs. And then we see for nonprofits around like 14% from earned sources. So that's advertising, sponsorship, underwriting. The really interesting trend that happened last year, revenue-wise, to Loretta's point on kind of community support and serving your community was in individual giving dollars. So in a year where so many people had to retract and, you know, maybe donate less to charity or nonprofits, we actually saw individual giving contributions surge to nonprofit outlets last year. I read that as a testament to the services nonprofit news organizations are providing to their communities. But two-thirds of outlets saw an increase in revenue from individual giving and small-dollar contributions were really impressively kind of rising as well. That's such great news. Loretta, like I know that AJP understands the value of revenue-generating roles in nonprofit news organizations. But for those who don't have that context, can you describe what you guys support and how you help organizations to think about those things? Sure. So the background with AJP is that we make sort of transformational multi-year grants that are meant to be investments in the business and operations capacity within these organizations. So, you know, with our cohort, we're seeing a lot of, you know, the INN data sort of being reflected as in, you know, five of the grantees that we've invested in have seen their operating budgets double over two years. And so it really is a testament to what you can do with the sort of large capital injection early on to sort of reach the sustainability rather than sort of building up slowly with, you know, just newsroom talent trying to do fundraising at the same time. So we've seen, you know, for example, like CitySide, CT, Marin and BTZ are all seeing really strong growth in audience revenue, but they're also, you know, making headway and major donors and incorporate revenue. And that is because they have people who are dedicated day in and day out to like really building those pipelines and cultivating them. That's fantastic. What are some of these kinds of roles that are important for newsrooms to have? It really depends on the strategy. So when we're talking about really ambitious growth, you know, you may need a, you know, a revenue strategist, a chief revenue officer, you may need a major gifts person. You may need someone who is capable and able to sort of pursue corporate partnerships or to generate local ad revenue from small businesses. And we've seen, you know, a lot of experimentation with that. I think we're really just at the beginning of figuring out what that means for nonprofit news. And I think it's really promising. Excellent. You mentioned local businesses. So, you know, AJP is investing in civic news organizations. I think everybody probably listening to this knows that Knight Foundation cares deeply about local news. Local news is just one slice of nonprofit newsrooms. But Emily, I'd love to hear what are you seeing as far as trends in local nonprofit news specifically? Yeah, local news is growing, which is so exciting to see, because I think there's an increased understanding of the need for high quality local news. You know, back in 2008, one in six outlets was local and INN membership. Now that's up to one in three. So just to give you a sense of that growth, we see that growth really starting to accelerate just a few years ago in 2018. And this kind of connects with the startup growth points I was making earlier. But we're now seeing an average of one local news outlet launch per month. This has been kind of the pace for the last three years, which is really incredible to see. Yeah. And then just a quick revenue wise, the thing to kind of look out for for locals is that they do tend to operate on much smaller budgets than, you know, larger nonprofit newsrooms that might serve a national audience. So you're looking at like a median revenue of around $250,000 per year. Yeah, we're seeing some exciting trends in terms of local news organizations kind of grow revenue year to year. So our more mature local news organizations, we're seeing make pretty significant revenue gains over the last three years of tracking their revenue, which has been really awesome to see. That's fantastic. Loretta, I would love to hear about just some local news organizations that you guys are supporting, really, like great examples, whether they be startups or maybe like Emily's describing, they're just having some incredible revenue growth. Sure. You know, we do definitely see that there is, there's just such a clear impact when you do make sort of hires that are specifically focused on revenue. So we see that across the board. As far as the types of organizations we support, it really ranges in size. You know, some, you know, we, our grantees include Outlier in Michigan, Cityside in California, in West Virginia, Mt. Valley, as I mentioned, the beacon. And so, you know, and there are also older organizations and startups as well. And really what they have in common from our perspective is that they are trying to, they are creating local news for public good, and they're making it sort of maximally accessible to, to the people that they serve. And they're also really narrowly or sort of zeroed in on serving communities above all else. And that's sort of the, the, the main point of it. And that's how we look at the grants that come in as well. Yeah, I love what you said about they're narrowly focused on, on their mission space, which, you know, as vice president of strategy and startups, I think that's really important as we think about, you know, individual strategies and having a clear and defined focus. You mentioned a couple of great ones, Outlier, especially for those who don't know, can you talk a little bit about Outlier and any others exactly? What do they do? So, yeah, I mean, there are some folks like Outlier in our portfolio that are really not only just thinking about ways to generate original reporting, but how to distribute it and engage with audiences in, in groundbreaking ways that, you know, because there are networks of people that we see also in our research that were never really, didn't feel like they had a line into the legacy newsrooms, didn't feel like they could, they were being covered or represented and so were detached from what local news was happening. Outliers directly, you know, building a platform to engage with people through their phones so that it's like, it's more accessible. It's native to the way people like to communicate and share information. And so it's really exciting because, you know, this is just the beginning and they may, you know, we may see that model replicated throughout the country for local news. That's awesome. You talked a bit about audience engagement. What are some of the ways that you see nonprofit news organizations engaging with their audiences that are maybe different than traditional or legacy media? Yeah, so this is really interesting because I think traditional media, and also I come from traditional media, that's my sort of background. It was, it was mass media, right? It was like one, it was like your goal with audience was to reach the maximum number of people so that you could grow, you know, the people that were paying you or that you were monetizing with advertisers, but when community sort of service is at the core of your mission, then the way that you report is different, the way that you staff is different, right? You want your newsroom to be reflective of the lived experience of the people that you're writing about. And because you're ultimately serving them versus investors versus advertisers. So that's what's like sort of really exciting. And then what we see come out of that is like real conversations. We see like newsrooms that are getting a significant number of their story ideas from tips from their communities. For example, in Kansas, you know, the beacon is doing a lot of community listening in terms of like constantly having events where they're listening to their constituencies and hearing what they want to be covered. And then prioritizing your coverage that way. So I, that's a trend that I really hope will continue. And then also, you know, City Bureau doing documenters and having people report alongside the newsroom and actually be the ones that are going to meetings and documenting them is really exciting to see too. Explain that for those who don't know, how does, how does documenters work? Sure. So documenters is a network where they are, and it's actually in multiple cities now, but they start in Chicago where City Bureau is, they train people who are interested in journalism interested in in information gathering to go and cover meetings in their communities and creating documents so that reporters can develop content out of it or, you know, so that it's a public resource for people to use. It's just a really amazing way to activate people because, you know, at the end of the day, what are journalists with people who really care about their communities and transparency and, you know, the spread of information. So they're making the profession more accessible to everyone and just and have done it so successfully that a lot of communities around the country are asking them to bring that program to them too. Excellent. That's awesome. You mentioned the importance of the staff reflecting the community that they work in. So Emily last year, INN did its first report on diversity, equity and inclusion in the industry. And you guys repeated some of that analysis this year. So tell us what you found last year and and what you're seeing this year. Yeah, that's a great question. So, yeah, last year, as you mentioned, was our big kind of first deep dive into DEI across the field. We found that nonprofit news outlets are, you know, more diverse than traditional media. You know, that's not a great benchmark. We really are aiming to have these outlets reflect the communities they serve and their local audiences. Gender wise, interestingly, nonprofit news is really excelling. More than 75% of outlets have at least one woman in a top three leadership position, which is great news. But yeah, as I mentioned, racial equity is really where I think we should be focusing our efforts in the coming years. This year, so this past year in our most recent report, we did see some signs of progress in racial equity in 2020 over a third of outlets had a staff where people of color made up 40% or more of total personnel, which is roughly roughly representative of the US population. So that was that was a promising sign. The really kind of high need area is at the leadership and executive level. So a little less than a quarter of nonprofit news executives are people of color. And this this representation is highly variable from outlet to outlet. You know, some outlets are doing an amazing job. Other other outlets have a lot of work to do and don't have any racial diversity at their top leadership level. So that's really kind of a place where we're looking and working on in the next in the next year or so. Absolutely. And I know both of your organizations are doing a lot of work in this space to improve the diversity of the field. So Loretta, tell me a little bit about how AJP approaches this. And then we'd love to hear a little bit more from Emily as well. Sure. I mean, it's it's basically a priority in everything that we do from grant making to sort of like internal operations. And I think the way we see it is also that there is not enough talk about how in the long term sustainability is important to diversity. Right. And I come from personally, you know, back an income and racial and cultural background where, you know, it cannot be overstated how important financial stability is when making career choices. And if we're going to make and build and continue to grow this The field and attract more talent to it in a way that is super inclusive. We're going to have to, you know, basically make sure that people are confident that our organizations are going to be around in 100 years that they're gonna That they're always going to pay fair wages and that, you know, people can have that jobs ability that historically journalists have not had So so that is something that we we think about a lot. And also, you know, beyond representation, it's really important in the coverage. So when we talk about You know, when we do our we do market assessments with philanthropic partners and what we often find looking at what the ecosystem looks like is that entire communities have just Never seen themselves in the coverage. Sometimes they don't even have access because of literacy or internet or language issues. And so I think all of that is part of the sort of full D I picture. Great. Thanks. Yeah, you guys are doing great work. Emily, I know you guys have been thinking about some resources as well. So share with us what I am and is doing also to help improve This Yeah, yeah, so I'm going to pivot away from the index report and talk about a new program that I am in recently launched called the racial equity and inclusion and nonprofit news program Abbreviation for that is rain. My colleague Sarah shariari leads that program. It is it is night funded. So thank you And it is really the whole purpose is to really help our members advance racial diversity equity and inclusion in their organization. And so we're really kind of targeting Nonprofit news leaders and just trying to give them resources coaching workshops materials that are that are for Specifically for for nonprofit news organizations and specifically for smaller kind of organizations with this mission. And The exciting thing is we've just seen an incredible amount of demand for these resources across our members. These are pretty small, you know, workshops and we've already seen more than 260 people from Across the IANA network sign up and attend one of these pretty intensive workshops. So yeah, shout out to Sarah and the rain program, I would say That's excellent. Awesome. You guys are all doing incredible work in this space. And so it's really fantastic as promised this time has flown by. So we probably just have time for one more question. We've talked about just the incredible momentum that's happening in the nonprofit news field. And we just left here from from each of you, you know, what do you think is needed to keep that momentum going. And how do we how do we keep the field growing. So Loretta, I'll go to you first and then to Emily. Sure. I guess what I would say is like, you know, this momentum is amazing, but it comes in the backdrop of like a real crisis where people, you know, they're just aside from used deserts. It's like everywhere is a desert in a lot of ways. And so I think that Thinking like really sort of kind of big about this and like long term about it and considering that we're all sort of like players in building a movement. I think that that we have to continue to go at it from all angles on educating people about why, you know, local support of local newsrooms is really important. But also, you know, making our organizations a friendly place to bring in the best talent from other industries and continue to grow and just imagine that, you know, just always think that growing. What we need to do is that in order to meet everyone's information needs. Great. Thanks so much. And Emily, what are your thoughts? Yes, I want to go back to an awesome point Loretta made just about like understanding the audience purpose of nonprofit news outlets because I think that cracking the audience piece of the puzzle for nonprofit news outlets is the key to understanding this momentum. So You know, nonprofits have a mission to serve the public that does not mean as Loretta said earlier, just like maximizing clicks from the most affluent people in your community. It comes with a really kind of nuanced need for audience research, you know, distinct marketing, distinct branding distinct kind of information needs research to understand what these communities need. So so yeah, I think investing in kind of audience research and growth work is a key to momentum. Awesome. As a researcher research nerd myself. I fully support that certainly. So, well, I thank you guys so much for this wonderful conversation. Thank you for taking time out of your day to join me this afternoon. We'll wrap up here for those of you who like to listen to Night Live. I encourage you to join our smart cities lab next week. And if you have any questions, you can always reach me and Ashley's on on Twitter and you can see this episode and many others at kf.org slash Night Live. So thank you everybody. And thank you all for joining us.