The idea of creating a nonprofit, hyperlocal news outlet never occurred to me when I threw my hat and publication into the entrepreneurial ring. Why build a business that doesn’t aspire to make money, I thought. In the end, my business failed to make a profit anyway.
Looking back, I should have given the nonprofit model more consideration. It would not have guaranteed my publication’s solvency, and it probably would have taken just as much work on the marketing and management end as a for-profit business. But it would have been one more option to raising revenue.
Contrary to my earlier belief, nonprofits are permitted to make money. The catch: That money must go towards funding the organization’s goals, not revenue sharing with employees or investors. Some nonprofit news organizations have done well for themselves. In 2009, the MinnPost publication in Minneapolis brought in $458,000 in donations, while the syndicated AlterNet press service raised $300,000 from reader donations plus $600,000 in grants.
Also contrary to another earlier belief, nonprofit publications are allowed to sell ads to supplement the donations they receive. Last year, the MinnPost raised $217,000 in ad revenue. AlterNet made half a million dollars in ad sales.
So can a hyperlocal news organization, one that reports on the community level, make that kind of money? My guess is no, but that doesn’t mean a hyperlocal nonprofit can’t have a healthy bank account. I’ve never performed any kind of fundraising, but I have a few ideas on how to kick start a nonprofit newsroom:
- Hit up local homeowners associations, neighborhood civic associations, and co-op and condo boards for donations. As residents and property owners, they stand to benefit the most from hyperlocal coverage.
- Try professional organizations with a strong presence in the neighborhood. For example, if there’s a hospital in the area, a local branch of the medical association might be interested in donating.
- Ask a local business to contribute some percentage of one day’s receipts to the publication. It seems like a win-win when the local pizzeria donates $1 for every pie sold and still pulls $5 in profit from the sale.
- Ask readers to donate money. The best time to hit people up for charitable donations is right before the New Year, when homeowners are looking for tax deductions. Reminder: Only incorporated nonprofits can receive tax-deductible donations.
- Ask readers to donate time. Residents might not have expendable income to contribute, so give them the opportunity to volunteer for a “street team” that will promote the publication to new readers and potential sponsors.
I’m sure there are far more creative ideas for fundraising, so I encourage readers to share them in the Comments section below. Also, there may be distinct conflicts of interest between nonprofit news outlets and the organizations that sponsor them. I’ll explore that in a future post.
Photo courtesy of Flickr user Heather Durdil.
