September 14, 2023

By Ha Ta

Each year through the INN Index survey, hundreds of nonprofit news outlets send in their revenue, staffing and audience data to the INN research team to compile and produce research into the state of nonprofit news and how it can thrive. This year, the research team took it a step further.

Leveraging Index responses across 348 outlets, we parsed through the data to identify 12 distinct groups or models of nonprofit news outlets — from hyperlocal community connectors to large investigative powerhouses — and called these 12 groups “Pods.” The result? Better benchmarking data and more targeted peer connections for INN members.

This past spring, INN’s research team virtually convened each Pod to introduce members to their group of similar organizations, review these benchmarks, and collect member feedback on the data they need to make strategic decisions within their organizations.

Our insights from convening similar groups of nonprofit news outlets:

1. Startups benefited most from the benchmarking data — which helped position themselves in the market and pinpoint their distinct success.

The purpose of benchmarking data can vary, but typically they are used to identify where an organization excels and where to focus on making improvements. One thing we didn’t anticipate the benchmarks to do? Give startup outlets a degree of relief and hope. Operating a startup comes with worries of lagging behind or doing something wrong. By comparing their own numbers against fellow startups within their geographic scope, our startup members were able to establish realistic expectations and alleviate some of the pressures that come with early-stage operations. Beyond that, we learned startups are using the benchmarks set by more established outlets in the sustainers and heavyweights phase to set clear growth targets.

Benchmarking data was also considered invaluable for startups in supporting their fundraising efforts. Startups can present concrete data to funders, donors and boards, showing how their performance aligns with the median performance of the field, demonstrating they are on track for future revenue diversification or growth.

2. Sustainers face a chicken-and-egg problem in developing capacity.

Many organizations in this sustainer stage are working to diversify their revenues to carve out a sustainable earned revenue model, and at the same time, securing resources to afford the next hire to support these expanded operations.

News outlets that experienced success in individual donations revenue strongly emphasized the need of having development staff on their teams. In many cases, member outlets who have made their first hires outside of the founding team (roles including development staff, fundraising staff, audience engagement staff or advertising revenue staff) said foundation grants helped them make that next hire. Members noted that funders tend to prefer funding reporter positions due to their measurable impact through the number of stories and reach, making it challenging to demonstrate the impact of audience/revenue-generating staff.

Some Sustainers expressed having difficulties acquiring foundation funding due to the resource-intensive nature of the application processes as well as the time and staff commitment it takes to maintain existing relationships and establish new relationships with foundations. This, in turn, hinders their ability to expand their funding to hire development staff who are dedicated to revenue generation and diversification.

3. Sustainers and Heavyweights are optimistic about growing earned revenue and individual donations.

Some of our members had success increasing earned revenue through sponsored content, events and webinars in 2022 and early 2023, offering encouraging anecdotes for other organizations aspiring to build their own earned revenue operations. Foundation funding remains a highly desired revenue source, but the time-intensive nature of the application processes remains a barrier for many smaller outlets with less resources.

Some members said they are prioritizing individual donations — including small, mid-level and major donors — viewing this revenue source as both a sustainable way to fund nonprofit journalism and a means of developing relationships with community members. Two strategies many members are taking to increase individual giving dollars? Employing third-party companies to help with the mechanics and messaging of donation campaigns (shoutout to News Revenue Hub!) and launching new loyalty and perks programs to retain existing, recurring donors.

Members are also ramping up their messaging frequency with more consistent donation appeals (either as site popups or in newsletters), or as one member put it: “making sure people who have the potential to give are at least asked.”

4. Newsrooms of all sizes are trying to figure out how to acquire and cultivate new audiences via third-party platforms.

Members expressed concerns about the volatility of third-party audience acquisition through social media, Google search and news aggregator platforms. Changes in policies and algorithms on these platforms are becoming increasingly frequent and unpredictable, making it difficult to craft a clear strategy tied to set goals or metrics. That said, some find third-party publishing platforms like SmartNews useful in helping determine what types of audiences the outlet is reaching.

Although many outlets, particularly Sustainers, reported difficulties converting social media followers to donors, some consider devoting staff time and resources to distributing their coverage via social media as a way to invest for the future — cultivating a culture of news reading among young people.

From these Pods meetings, we gained insight into INN members’ resourcefulness in the face of tumultuous media landscapes, their eagerness to share lessons and strategies to help fellow members, and their determination to serve their audiences.

Our hope for the future is that Pods will evolve into a program that, besides the benchmarking data and peer groups components, will also include mentorship and training components to support members’ distinct challenges and missions.

INN members who completed the most recent Index survey can access the full benchmarking data that include revenue and expenses, audience and distribution and NewsMatch trends.

Please reach out to INN’s research associate, Ha Ta, if you’d like to learn more about the program.

About INN’s Index Pods

Pods is a response to the rapid growth of the nonprofit news sector, particularly among INN’s local members. With 425 member outlets and counting, INN needed a better way to identify and support the distinct missions, revenue and audience models of our varied membership.

Six years of INN Index data allowed our research team to identify 12 small groups of members, or Pods, based on three core factors: the outlet’s geographic scope of coverage, the outlet’s age, and capacity (a combination of total revenue and staffing). We broke this down even further by three growth stages: Startups, Sustainers and Heavyweights.

• Startups: Outlets within their first three years since launch. This year, all outlets that launched in 2020 or later qualify as a “startup.”
• Sustainers: Outlets beyond startup years whose revenue and staffing capacity are small to mid-size. Many Sustainers have succeeded in identifying one or two revenue streams or audience platforms that work for their organization, but they’re looking to grow revenue and audiences in the next several years.
• Heavyweights: Well-established outlets that have a comparatively higher revenue and staff size and serve larger markets than many other nonprofit news organizations. Some heavyweights are still working to build or maintain a revenue base; others have stabilized and are shifting more attention to maximizing mission, impact or reach.

Read more about INN Index Pods schema here.

This piece was originally published on INNsights.