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How Honolulu Civil Beat used the ‘runway’ from a billionaire’s investment in news to develop a diversified fundraising strategy

By Jennifer Mizgata 

Back in 2016, Honolulu Civil Beat’s leadership made a big bet: they believed shifting the for-profit newsroom to a nonprofit model would radically transform Civil Beat’s relationship with readers. Their hypothesis was that moving to donor-supported news would lead to long-term sustainability, deepen community connections and bring in new audiences. Seven years later, that wager is paying off. 

Longtime reader Susan Chamberlin originally subscribed to Civil Beat when it was a for-profit news organization dedicated to covering Hawaii, paying $5 a month for access to the website. When Civil Beat transitioned to a nonprofit, Chamberlin, a philanthropist and part-time Hawaii resident, responded to the organization’s call for support and donated $1,000. At that point, the Civil Beat team didn’t have the capacity to reach out to her individually, but hoped she would continue to give at that level. 

A year later, Civil Beat finally had the infrastructure to do outreach and the team contacted Chamberlin, looking to grow their relationship. As a result, Chamberlin increased her individual gift, and learned she had a family foundation in California that invests in education issues with a precedent for funding journalism. Civil Beat asked the Chamberlin Family Foundation to support a new position for an education reporter, and secured a $100,000 gift. The foundation is now in its sixth year of giving $100,000 to fund education reporting. 

About Honolulu Civil Beat 
Founded in 2010 by entrepreneur Pierre Omidyar as a digital news outlet, Civil Beat was relaunched in 2016 as a nonprofit news organization. Civil Beat produces investigative journalism, enterprise reporting, analysis and commentary aimed at citizens of Hawaii and those connected to the community. 

Civil Beat’s strategy has proven to be successful on other levels, too, including a dramatic increase in the number of monthly readers and donors who support the organization. In 2016, Civil Beat had about 1,000 subscribers paying $5 a month, on track to bring in $60,000 in annual revenue from subscriptions. By 2022, the nonprofit news organization generated $792,000 in small donations from over 7,300 individual members, as well as an additional $191,000 from mid-level and major donors. 

Chamberlain’s support — starting at $5 a month and leading to over $600,000 in funding — is an excellent example of how a new business model allowed Civil Beat to develop meaningful relationships, expand its reporting and engage with individuals, funders and foundations in new ways. 

Civil Beat tapped into resources within the journalism industry, drew inspiration from public media and nonprofit membership programs, and hired staff from outside the field to bring in fresh perspectives. As the donor program has evolved over time, Civil Beat has taken a hybrid approach, merging best practices from traditional fundraising and membership programs. 

Building a donor program from scratch

Founded in 2010, Civil Beat had startup capital and a commitment for ongoing funding from entrepreneur Pierre Omidyar, the billionaire founder of eBay also responsible for funding high-profile news outlets such as The Intercept. When the organization went nonprofit in 2016, Omidyar maintained his investment, and continues to do so to this day. 

Ben Nishimoto, Civil Beat’s Vice President of Operations and Philanthropy, told INN that Civil Beat was able to create a new donor program intentionally, thanks to the stability afforded by Omidyar’s investment. 

“We were able to build out our nonprofit revenue program the right way and the sustainable way, because we had a really generous financial runway to sustainability offered by Pierre, who continues to be the single largest donor,” Nishimoto said. “But he has been able to reduce his support of us over time, while at the same time we’ve been able to increase our budget, because of the additional revenue that we’re receiving from donors.”

This runway meant Civil Beat could invest in staff, editorial and technology resources up front, buying time to build the case for supporting nonprofit news. 

Nishimoto joined the organization in 2016, after the nonprofit transition. Before coming to Civil Beat, he worked for PBS Hawaii, where he executed a fundraising strategy for the public television station and also managed its development team, cultivating individual, foundation and organizational donors in Hawaii. In 2016, Civil Beat also brought on an important thought partner for Nishimoto: Mariko Chang. 

Hailing from Hawaii Theatre Center, Chang was hired as Membership and Events Manager. Her background in fundraising for Hawaii-based arts and culture organizations complemented Nishimoto’s experience leading a public media strategy. Both had a passion for linking people with causes they care about and were energized by creating ways for people to connect with journalism. 

“I have a background in arts and culture, so to jump into journalism was really, really new. And it’s new, just in general, right? The idea that you can donate to nonprofit news sometimes catches people by surprise, they’re like, ‘What does that mean? What does it mean to support media?’” Chang said. 

This step — pairing people from both inside and outside of media with fundraising experience — shaped a team that was primed to meaningfully engage potential donors. The team was eager to show people the value of supporting local newsrooms and brought inspiration from the fields of public media, the arts and hospitality.

Educating individuals and foundations is crucial to Civil Beat’s success. “As a nonprofit operating in the most geographically isolated island chain on earth,” Nishimoto said, “we have the burden of educating readers and donors what nonprofit journalism is.”

Chang and Nishimoto asked what it would take to connect more people to what Civil Beat was doing.

“We really leaned into the operative question of ‘What does a newsroom look like if it’s optimized for trust?’” Nishimoto said. That trust began with reducing the barriers to the news Civil Beat produced. When they removed the paywall, more people could see what Civil Beat’s reporting looked like.

“Removing our paywall brought us closer to our readers and aligned us with our newsroom’s core belief – that local news and information should be free and accessible for everyone, regardless of one’s ability to pay,” Nishimoto said.

Nishimoto’s team saw many readers respond to their call to support local news so that others could enjoy it for free. “What we found immediately, in the first six months of that transition, was fairly strong and rapid revenue growth,” Nishimoto said. 

In its first year as a nonprofit, Civil Beat doubled both the number of readers paying and the amount they were paying, increasing to almost 2,000 people with an average contribution of $10 a month. 

“Just looking at those baseline metrics, it really validated our move to nonprofit status, and informed our path forward,” Nishimoto said. “All we need to do is develop this audience funnel, attract more casual readers, convert them to core readers and then pitch them for support as owners, with a mission-focused set of solicitations, and build over time.” 

Investing in tech

Early on, Civil Beat was also able to make critical investments in technology that would lead to significant gains; and becoming a nonprofit opened the doors to specific opportunities. In 2016, the organization joined the first News Revenue Hub cohort, where it was one of four organizations that received coaching on setting up a membership program and using tech tools to reach their goals. This led to two core investments for Civil Beat: a donor database built to scale up as the donor pool grew and an email strategy, which turned into a key driver for cultivating readers’ support. 

Civil Beat Reporter Anita Hofschneider conducting an interview with a source. Photo by Nathan Eagle for Honolulu Civil Beat.

That database is still in use as one of Civil Beat’s most powerful tools to strategically engage donors, with information like newsletter signups, events attended, donation history and topics of interest. This database has become the backbone of the fundraising tech stack: by capturing as much data as possible, Civil Beat’s team creates robust profiles that help them match donors with meaningful ways to support the organization.

“When I started, [the database] was something that we really built from the ground up and organized the way that we wanted to,” Chang said. “I really make it a point to capture absolutely everything in there.”

She used the database to personalize her outreach, making donors feel seen and heard. In fact, Chang was helping donors with everything from processing payments to sending individual emails about events on topics that individuals cared about. 

“In those early days, we would call every single donor, and thank them over the phone on a weekly basis, and just building that relationship,” she said. “For me, it was really important to let donors know how accessible we are, because that was a huge point of differentiation between us and other local media.”

This high-touch approach also helped the team get to know individual donors and find new opportunities in the future. 

At the same time, News Revenue Hub had emphasized the power of email to reach readers, which Civil Beat took to heart. Hiring a newsletter editor in January 2017, Civil Beat devoted significant staff time and resources into the Morning Beat daily newsletter. The newsletter ran Monday through Friday at 6:00 a.m. with “hefty summaries” for each of Civil Beat’s stories, giving people information they needed at no cost, deepening trust and showing readers the value of what the newsroom was producing. The emails included “Read more” links after each story, but since they weren’t selling advertising in the newsletter, the team was less concerned with click-through rates; instead, they looked at whether readers built a habit of regularly opening the emails.

“We look at the Morning Beat as our primary news product for core readers,” Nishimoto said. “My thinking was that we could create a really strong news product that cultivates habitual readers who, over time, are more likely to become donors.”

When someone signs up for the Morning Beat, they’re sent an educational “drip” campaign: a number of emails aiming to convert them into a supporter. These emails include messaging about why it’s important to support nonprofit newsrooms, as well as emails written by journalists about why they do the reporting work. 

The investment in the newsletter, new technology and more connections between readers and the newsroom had a major payoff: more newsletter subscribers, more readers and more revenue. From 2016 to 2022, newsletter subscribers rose from around 4,000 to 45,000. By 2022, average monthly readers had climbed to 550,000 from 167,000 in 2017. 

As more readers came to the newsletter and the website, more people gave to Civil Beat and the average gift increased. In 2017, its first full year as a nonprofit, small donors gave $217,000. In 2022 alone, Civil Beat brought in over $983,000 from individual donors. As Civil Beat has continued to invest in its fundraising strategy, its donations from midrange and major donors have grown as well.

Evolving the strategy to fit a unique community 

Civil Beat’s business model has evolved through multiple phases before reaching its current state: a nonprofit with a fundraising strategy encompassing grassroots contributions, major donors and foundations, incorporating best practices from membership models. The strategy interacts with the needs of a small, diverse community, which includes Hawaii’s 1.4 million residents, part-time residents, and others living abroad.

When Civil Beat was founded in 2010, the subscriber model assumed that readers would pay for a premium journalism product. When it became a nonprofit, the staff initially embraced a membership model in 2016, removing the paywall and encouraging readers to donate to support the work. Nishimoto and Chang educated potential donors about the nonprofit model and embraced a customer service mindset. As they worked more closely with individuals who cared about Hawaii, their thinking about the relationship with readers evolved. 

Two years into becoming a nonprofit, Civil Beat began interrogating aspects of its model. Like other public service organizations, it often relied on donor tiers and perks like special access to events. It felt too transactional, Nishimoto explained. “ You can really become dependent on promoting member benefits at the expense of your core mission.”

Photographer Cory Lum covering the Kilauea eruption on the Big Island. Photo by Nathan Eagle for Honolulu Civil Beat.

Civil Beat could reach out with a different value proposition: that supporting news is good for the community, good for democracy and fits with readers’ charitable giving practices. 

“A lot of our messaging focused more on, ‘Support Civil Beat by making a tax deductible donation’ as opposed to ‘Become a member to receive X goods or access to these events,’” said Nishimoto. “To me, it was a stronger distinction between the transactional relationship of subscriptions and the more trust- and value-based relationship generated from donors.”

Currently, Civil Beat operates with a valuable hybrid approach: while the team thinks in terms of cultivating donors, they draw inspiration from membership best practices as well. When readers click “Support Us” on the homepage, they are directed to a simple form that encourages a $15 per month donation, asking people to become supporters. 

Internally, Nishimoto and Chang think about donors in two categories: grassroots (small donors) and major (anyone who donates more than $500 a year). When encouraging people to re-up their yearly recurring donation, Civil Beat has found that referencing membership can be motivating. These messages specifically include telling donors that their membership is about to expire. 

Growing grassroots donors, major donors and foundations concurrently

In 2018, after two years of growth, Civil Beat chose to cultivate grassroots and major donors concurrently: using a funnel approach to scale up the pool of small donors, while investing staff time identifying more mid-level and major donors. Chang was promoted to Major Gifts Manager and a new events and membership manager was hired in September 2018 to help support the team. The major gifts program grew directly out of the work Civil Beat had done early to educate and cultivate readers. 

“What’s been so wonderful is as the organization has grown, and revenue has grown, so has our team. And so it only made sense, a few years later, that we built out this major gifts role,” Chang said. “The opportunity is very unlike other nonprofits that I’ve worked in, because in those you would make cold calls, you’d rely on your board for those introductions. It was less organic. Our major gifts position and individual support in that area really came out of our grassroots donors.” Chang went on to become Civil Beat’s Director of Philanthropy in 2022. 

Honolulu Civil Beat’s salaried staffers in recent years:
2020: 26 FTE
2021: 28 FTE
2022: 35 FTE
2023: 35 FTE

In Civil Beat’s small community, the overlap between individuals giving small monthly donations, those who could donate more, and those who were connected to foundations was significant. Chang had already built strong relationships with the current donors and could leverage the database to identify who might be able to give more than a small recurring donation. 

“I’ve never been part of a fundraising operation where we had enough time to basically focus on individual small donors and then build to include major donors,” Nishimoto said. “I think that’s totally the right way of doing it.”

Rapid growth after laying a strong foundation 

In 2020, Civil Beat’s website traffic more than doubled, as readers sought out information about COVID-19 and how it was impacting Hawaii. Average unique monthly site visitors increased from 310,000 to 680,000, and newsletter subscribers went from 27,000 in 2019 to 45,000 in 2020. The organization was able to convert many of its casual readers into supporters, bringing in over $611,000 from grassroots donors alone. While the team had worried that their 2021 numbers wouldn’t stay on pace with the rise they saw in 2020, and had predicted a steep decline in the number of donors and their average gifts, this didn’t happen. In 2021, the number of donors and their average gift size continued to increase, even as the number of average monthly readers declined slightly. 

“In 2020, our casual readers grew at a much faster percentage than our core readers, for obvious reasons, but over the course of 2020, and into 2021, we were able to convert enough of those casual readers into core readers, so that our donations continued to increase in 2021,” Nishimoto said. 

2020 also led to shifting dynamics in the population of Hawaii. Many part-time residents moved to Hawaii full-time during the pandemic, since travel back and forth was challenging and Hawaii felt like a safe place to ride out lockdown. Many of these people live in Maui, where Civil Beat has been expanding coverage and sees an opportunity to connect with donors who want to support the community. Civil Beat’s editorial and fundraising teams were prepared to respond to the shifting demographics because of their work to better connect with audiences over the previous five years. Notably, as the newsroom expanded coverage to include translations written in Hawaiian, Civil Beat found a small group of donors to support that work. 

Looking ahead

As Honolulu Civil Beat approaches its seventh year as a nonprofit, it continues to invest in growing a community of donors. And the organization’s early work is still critical.

“I still consider our membership base to be the strongest currency that we have, even though I’ve been focused on major gifts for three years,” Chang said. “That was the community that we cultivated that has stayed with us, and it shows in the retention. Those are the people that are going to tell their friends to read us, share stories within their classes, at the dinner table… that’s where the trust and the name recognition is. And that’s what’s so important in Hawaii, which is word of mouth.”

With this in mind, Nishimoto acknowledged that scaling revenue and sustaining growth can be challenging as a nonprofit.

“It’s still an open question as to whether a population of Hawaii’s size can fully support a really robust digital newsroom, and allow us to operate in a way we feel best serves our community here,” Nishimoto said. 

Civil Beat sees a lot of opportunity. Between expanding coverage on neighboring islands and reporting on environmental issues, finding local donors to match giving campaigns, pairing major donors with new editorial initiatives, and engaging new full-time residents, the team keeps exploring new ways of engaging donors. 

“A general question that I think all nonprofit fundraisers have is what their ceiling is,” Nishimoto said. “The good thing is I don’t think we’re near that, or have hit that yet. I do foresee several years of growth.”

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