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Case Study: How Bay City News raised major donor revenue in a time of hardship

This case study was written Vignesh Ramachandran for the Institute for Nonprofit News and published on March 10, 2021.

Introduction

Bay City News, an independent local news outlet that covers the San Francisco Bay Area, raised more than $200,000 from local supporters in 2020, including several major funders. Led by owner and publisher Katherine (Kat) Rowlands, who oversees much of the fundraising and donor development work, these efforts doubled donations over 2019 and tripled the organization’s individual and large donations when counting multi-year pledges.

Like many news outlets, Bay City News faced an urgent need to maintain and build relationships with donors to keep the nonprofit newsroom afloat during the coronavirus pandemic and other extraordinary coverage challenges. As reporters worked overtime to meet the greater demand for high-quality public service journalism during the pandemic, publishers and business leaders rose to the challenge to steer their news outlets through economic uncertainty. 

One reason for success? Bay City News participated in INN’s Major Gifts Training & Coaching Program, an accelerator that helps member newsrooms build their support from major donors — generally considered individuals or organizations that provide gifts of $5,000 or higher. INN research has identified major donors as an increasingly important source of reliable funding for nonprofit news.

ABOUT THE PROGRAM: The INN Major Gifts Training & Coaching Program helps nonprofit newsrooms create strategies for major gifts fundraising, including how to identify prospective major donors and make the ask, then provides ongoing coaching and support. The latest cohort of 10 news outlets participated in the program virtually from May to December 2020. See a separate report reviewing 2019 outcomes. The program is led by coach Diane Remin and funded with the generous support of the Park Foundation.

Below, we dig deep into what Rowlands and her team did to raise funds, and her advice and tips for other news outlets seeking to build support from major donors. The training program, she said, was a long-term investment in her skills as she tries to sustain and grow Bay City News. To maximize resources for journalism, she has been carrying most of the burden for generating the organization’s revenue, with the help of a part-time assistant to keep her organized. 

About Bay City News’ hybrid business model

Bay City News launched in 1979 as a news service for media companies serving the San Francisco Bay area. In 2018, Rowlands— who began her career as a college intern at the news service in the 1980s — purchased the company and became the for-profit news service’s owner and publisher. News organizations subscribe to the business-to-business service which does original reporting 24/7 to create content that subscribers then publish or broadcast to their audiences. That same year, Rowlands founded the Bay City News Foundation, a donor-supported nonprofit arm that publishes free journalism. The nonprofit’s public-facing website — LocalNewsMatters.org — published more than 5,200 public service stories in its first three years. The hybrid model allows for diversification of the revenue streams and the journalism, making both sides more sustainable. Rowlands now serves as president of Bay City News Service, executive director of Bay City News Foundation and editorial director of LocalNewsMatters.org. The organization has been independent and locally owned since its founding.

A diagram of Bay City News’ business structure and how information about COVID-19 reached the region’s residents. For more information on Bay City News’ operations, see this Medium post by Rowlands.

A relationship-based strategy

A key part of major gift fundraising is building and then cultivating donor relationships — both personally and professionally. Throughout 2020, Rowlands did just that. She approached past supporters who had previously given at smaller levels and people who hadn’t yet donated but had a connection to the news organization, with her personally or with staff and board members. 

TIP: The key to major gifts fundraising is focusing on the long game. Establish relationships with your network of supporters, an approach that counterintuitively has nothing to do with money at first. In other words, be far more focused on building relationships and explaining the mission than making cold calls.  

“People often refer to the funnel — the first few touches are getting people familiar with the news, the content and product that you’re creating, and getting them to see and experience the value of what you’re producing,” Rowlands said. Then, over time, that community can transform from potential readers to potential supporters to, eventually, potential large donors. Once they’re familiar with and appreciate the work, it then makes sense to make a large donation ask, she added.

Below are Bay City News’ key, relationship-based tactics for growing revenue from major donors. 

1. Communicate journalism’s importance during a time of crisis

When joining INN’s Major Gifts Training & Coaching Program, Rowlands said she wasn’t expecting to raise much money due to the COVID-19 crisis. The pandemic caused many funders and donors to shift their focus to basic needs such as food, rent, child care and education. “In the world of philanthropy, there’s a strong desire to put resources into those primary needs, first and foremost,” Rowlands said. 

Like other nonprofit news leaders, Rowlands faced the challenge of educating donors on how helpful journalism can be to other organizations fulfilling those basic needs. For example, news outlets were instrumental in getting out information on food banks and COVID-19 testing and vaccinations to underserved communities. “It’s not to say that we are in alliance with any of the groups that we’re reporting on, but it is a core mission for many news organizations to provide basic information that is useful to readers,” Rowlands said. 

Bay City News had a story to tell donors about its reporting on crises involving evictions and food insecurity and its informing readers how to follow basic health protective measures. “As things kept changing day by day about best practices [in the pandemic], viral mutations and testing — and now vaccines — all of those issues are things that we wanted to report on,” Rowlands said.

For philanthropic donors, it was important for them to know that nonprofit newsrooms do that kind of information gathering, distribution and amplification in support of basic needs, she added.

2. Get creative when building your donor network

A news organization might find supporters in communities not traditionally thought of as major donors.

Rowlands was creative in thinking about her own professional network from her career in journalism. She said she has stayed in touch with her former colleagues over the years and included them in updates about Bay City News. In regular years, without social distancing precautions, Rowlands traditionally hosts a large, open-house party each winter holiday season with about 200 people. “It’s a chance for everyone that I have worked with, that I’m friends with, or those I might have gone school with, to come and have a great time — talk to old friends and connect with me and friends we have in common,” she said. “People look forward to doing that each year. It’s a celebration that’s very inclusive and I encourage them to bring friends, family and kids.” With the pandemic in 2020 making events impractical, Rowlands sent out holiday cards instead.

TIP: Your fellow journalists can be major donors, too. Rowlands says journalists, while not typically wealthy, are an ideal group to consider as donors because they understand and believe in a newsroom’s mission. “Even if they have gone on to do other kinds of work in their careers, they often still feel a tremendous affinity with journalism,” she said. Bay City News found current and former journalists very likely to donate — even if they give smaller amounts — but also to serve another key role: “They are ambassadors, allies and spokespeople who can do some of the work on your behalf of spreading the word about the mission that you have, the work that you’re doing and the need for financial support.”

During the rest of the year, Rowlands normally entertains over meals and hosts smaller parties or events like book launch parties. “This is not in pursuit of donations; it’s in pursuit of community,” Rowlands emphasized. “That’s the important thing when you’re trying to build something like a news organization. Accept support in whatever form it comes — whether it’s someone telling you about a great person to hire or introducing you to a donor or someone suggesting partnerships for a project. It all fits in with the overall, long-term success of a nonprofit organization.”

Rowlands at first used a spreadsheet to keep track of contacts, readers, supporters, former staffers, friends and neighbors — all people in different circles from the life of the organization and her own. All of that information was consolidated last year into Salesforce. Other nonprofit news leaders also have told INN that as they grew, they replaced such spreadsheets with a customer relationship management (CRM) tool. 

Use this resource: See INN’s Earned Revenue Playbook for more information on how to use a CRM to keep track of relationships and donor prospects (especially page 34 onward). 

3. Establish clear focus areas for your pitches to potential donors
Bay City News sends this overview of its main focus areas to potential major donors. 

One method Rowlands learned in the INN training for approaching major donors is clearly outlining her organization’s three focus areas and communicating them in a short document. This summary  — digital rather than on paper during the pandemic — helps donors quickly understand where their money will go. 

Bay City News’ three focus areas during this fundraising campaign were:

Rowlands advises customizing the focus areas for particular donors. For one donor particularly interested in environmental coverage, she swapped out the “Inspire Me” section and replaced it with a pitch for Bay City News’ current and future environmental coverage. “In making a pitch with three options, the last project I mention is the one that I think the donor probably would be most aligned with,” Rowlands said.

TIP: Reach out to donors using a mix of platforms. While major gifts fundraising is typically built on in-person conversation, nonprofit news organizations have had to adapt during the pandemic. Rowlands says most of the conversations with donors transitioned to phone calls or video chats. But even with those virtual communications, she says it’s valuable to also follow up with a combination of emails and old-fashioned mail correspondence to connect with donors. “In every case, I would have said something like: ‘I really wish we could have met in person and I’m looking forward to when we can get together in-person soon. But for now, I wanted to thank you for adapting to these times and hearing me out on this phone call, Zoom call or email.’”

4. Keep your donors in the loop

Bay City News is mindful of how the organization communicates with its donors to make sure that they feel informed, valued and part of the journey.

The newsroom has two newsletters that are sent each week to the most loyal readers. In almost every newsletter, Rowlands includes one or two sentences that serve as a thank-you note to supporters, gently but persistently reminding them that Bay City News values contributions, and providing links to the donations page.

Rowlands sends simple thank-you notes promptly to anyone who donates. The letters are automatically generated via email if someone gives online, or sent via postal mail if someone is a paper check donor. After the end of each year, in January, Bay City News also sends another letter summarizing everything the newsroom has worked on in the previous year, as well as an acknowledgment of the total amount a donor has given, ahead of annual taxes.

5. Tap the buddy system

The INN Major Gifts Training & Coaching Program teams up each participating newsroom with another, often similar, newsroom so they can share ideas and experiences. 

“It is great to have somebody to hold you accountable — whether it’s a goal to send five fundraising emails per week or make two phone calls per week or stop procrastinating on sending thank-you notes or putting together an annual report,” Rowlands said. “It definitely helps to have an accountability buddy to remind you — and commiserate sometimes if you’re having a mental block on something.”

The sounding board influenced Rowlands’ approach to major gift fundraising. For example, one of her cohort buddies encouraged her to be more methodical about building a mailing list, not just of donors but of readers and other potential allies. “Ultimately, it’s not just looking for money. It’s looking for other types of supporters — people who might not have resources themselves, but could certainly be an ambassador on your behalf.”

TIP: Don’t lose your empathy. Especially during tough economic times, keep in mind that some donors might be financially strained. Learn when to spend social capital and when to hold your ask for when your prospect might be more willing to support the organization. “Depending on what kind of outlet you are, it might feel tone-deaf to ask for money during this time. Yet, it’s more critical than ever to support local news operations,” Rowlands said. It’s important here to remind your donors that nonprofit news supports and amplifies other essential services during a crisis like the pandemic. “We’re part of the ecosystem, and we’re in it for the long haul — not just for this year.”

Conclusion

While participating in INN’s Major Gifts Training & Coaching Program, Rowlands raised $200,000 from Bay Area-based supporters for the organization’s nonprofit arm (about double the organization’s revenue from similar sources in 2019 and triple if counting multi-year pledges). That amount includes a $25,000 annual pledge for three years of general support, as well as another $25,000 annual pledge for three years to support environmental coverage. The remainder of the total was raised via one-time gifts for the year from several other large donors and many small donors. “It’s really about building sustainable sources of funding over multiple years,” Rowlands said. 

Rowlands said she feels more confident about making requests for larger donations moving forward. “The worst somebody can say is ‘no.’ They might surprise you with a ‘yes.’ And there might be something in between like, ‘I like what you’re doing, but I can’t support you right now.’” Any answer is helpful, Rowlands said: “It helps inform you to be more strategic about the long game, and it helps you refine your own message based on the feedback that you get, too.”

By March 2021, Rowlands was seeking to hire a development associate to help build revenue for the organization via grants, foundations, sponsorships and fundraising campaigns. She also hopes to take additional courses in fundraising and development.

A year of multiple crises across the United States — the pandemic, the Capitol siege, racial reckonings, economic uncertainty and natural disasters — created great pressure on journalists and newsroom leaders. “It has been hard,” Rowlands said, “but try and remember that it’s a marathon, not a sprint.”

Credits

Vignesh Ramachandran is a journalist and co-founder of Red, White and Brown Media (on Medium and Substack), focused on building media representation and sharing South Asian American stories. He’s recently been published in The Washington Post, Kaiser Health News, NBC Asian America, San Francisco Chronicle, The Colorado Sun, Colorado Public Radio (NPR station), Nieman Lab, OpenNews Source, Fortune and 5280 Magazine. He’s also a deputy news editor for PBS NewsHour’s digital platforms.

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