June 30, 2023

By Sue Cross

The philanthropy headlines were stark last week:

The Chronicle of Philanthropy: “Drop in Giving … Among the Steepest Ever”

The Nonprofit Times: “U.S. Philanthropy Plummeted $17 Billion as Donors Disappeared”

Both are pegged to the annual Giving USA report, which found charitable giving declined 10.5% after inflation from 2021 to 2022.

So how did news nonprofits do? Better. They felt the same pressures curbing donation numbers and size, and there’s a lot of variance from place to place. But overall, philanthropic giving to nonprofit news outlets grew in 2022.

It’s partly because of the growth of the field. Dozens of nonprofit news startups began fundraising for the first time in communities where news philanthropy just hasn’t been part of the picture. But as the number of outlets grows, so too does the whole revenue pie for nonprofit news. As reported in the INN Index Snapshot 2023, the number of digital-first news outlets tracked by INN increased by 17% last year. Their total revenue grew by 19%, to more than $500 million across the sector. That includes earned revenue, but it’s mostly philanthropic funding.

News philanthropy: stable overall but highly varied

Philanthropic growth for nonprofit news is happening at organizations of different sizes and coverage scopes. More than 80% of nonprofit news outlets surveyed in our INN Index reported their total revenue either grew or held steady over a one-year period (from 2021 to 2022). Just 18% saw drops. Noticeably, foundation funding grew for 58% of outlets surveyed.

Individual giving, or contributions from major, mid-level and small-dollar donors, was a much more mixed picture. We believe that reflected some of the economic uncertainty and other pressures cited in Giving USA reports. Of Index participants, nearly half saw individual donation gains — but a third saw drops. The remaining 20% saw individual donations stay flat. The picture varies by community and company. We didn’t see a lot of patterns within that from the initial analysis. Institutional philanthropy also held fairly steady, with no apparent trends between size or types of local publication, but generally a good bit of variability place to place.

Local funders step up for smaller, local outlets

NewsMatch, the national news funding program that provides nonprofit news outlets with matching funds they can leverage to generate broad support from their communities, also showed variability over the last year.

The total amount raised from individual donors reported through NewsMatch declined from 2021 to 2022, but that was mostly confined to the 50 largest news organizations participating in the campaign. Smaller and mostly local organizations saw individual support grow, with average donations per newsroom increasing from $39,000 in 2021 to $43,000 in 2022. And those participants secured a robust $5.5 million in local match funds from local businesses, community foundations and major donors.

Community and local foundations are driving some of the revenue growth to local news. Among 132 local outlets that provided Index revenue data for 2022, nearly two-thirds reported receiving grants from community or local foundations, and four in 10 said that source represented 50% or more of their total foundation revenue. This reflects a promising expansion of local news support from a relatively small number of national funders to broader community philanthropic support for community news.

Foundation support also grows for state outlets; holds for national and global

For state and regional outlets, individual giving and earned revenue held steady, and this group saw gains in grant funding. Overall, state and regional outlets grew their median total revenue by 36% in a one-year timeframe. A major driver: Foundations investing in larger, more established state and regional outlets. Index data alone doesn’t explain why foundation support to state and regional newsrooms is growing, but our reporting suggests growing philanthropic attention to statehouse coverage. National and global outlets saw median revenue hold steady year over year.

Overall, our takeaways from the national philanthropy headlines this month are that 2023 continues to present a challenging fundraising environment for all nonprofits, but even in the face of economic uncertainty cited as a cause behind the national trends, overall support for public service journalism will continue to grow.

This piece was originally published on INNsights.