Name: Growing Community Media, Oak Park, IL

Profile: Growing Community Media publishes four weekly community newspapers on the west side and near west suburbs of Chicago: Wednesday Journal, Austin Weekly News, Riverside-Brookfield Landmark and Forest Park Review.

Trigger for change: After four to five years of steadily declining advertising revenue, Dan Haley, editor and publisher, and his fellow owners understood their newspapers needed new revenue streams to stay in business more than another year or two. Their work was born in community activism of the 1980s and so they reached out to the community for answers. “The business model is broken. A lot of things are broken these days beyond newspapers, but we aren’t selling groceries,” Haley said. Figuring out a new way to support community journalism was more complicated, he concluded, than morphing into an untethered digital business. They needed people with feet on the ground, covering the community by being in the community. Haley and his team were determined to find a way.

Their story: The Wednesday Journal Inc., publisher of the four newspapers, began in 1980 when a small group of friends decided to start a local newspaper as part of an urban renewal and social justice movement in the Oak Park and Austin neighborhoods of Chicago. They sold shares to about 70 people who each invested $1,000. It was a healthy business for decades, but “the last four or five years were pretty brutal, and it was clear we couldn’t continue as we had been,” Haley said. They considered seeking more investors, but Haley said he could not, in good conscience, ask friends and the community to invest in what was no longer a viable business model. Haley started looking at other options, including riding out the decline or becoming a nonprofit.

He attended the Institute for Nonprofit News’ INN Days conference and loved the energy and commitment of the publishers he encountered. Haley conferred with his four fellow board members and they decided to convert to a nonprofit. It wasn’t an easy decision because the 14 shareholders would have to donate their stakes to the nonprofit, giving away a retirement nest egg. These were investments they had hoped they eventually could sell.

To guide him, Haley reached out to Case Hoogendoorn, an attorney active in nonprofits. They knew each other from community work over the years. After an analysis of the business and outreach to community leaders and other nonprofits in the region, they decided to create a new nonprofit organization called Growing Community Media with a deep focus on community journalism.

Hoogendoorn helped Haley develop a business plan with a new revenue mix that included donors, subscriptions and grants, as well as advertising. A difficult decision was made to sell a monthly magazine, Chicago Parent, to raise some money and focus solely on community journalism. The sale required creating two independent staffs, separating design, circulation and other departments. “There was grieving over losing colleagues and a publication we were proud of and had invested in over the years,” Haley conceded.

Their goal is to build a new revenue mix of reader subscriptions, community donors, foundations and advertising. The business model counts on donations ranging from $250 from individuals to tens of thousands of dollars from major donors, grants and foundations.

Haley has concluded the issues facing for-profit newspapers run deeper in the publishing industry than just the ad-supported business model being broken: Owners who took 30% profits without substantially investing in innovation, investor-owned newspapers that no longer have community roots, and even the way news is conceived. “The way we gather news, the people we choose to talk to, is also broken… Who are we talking to, how do we choose stories, how do we tell stories differently …Race is a gigantic issue… how do you cover equity issues?” he mused. “It’s a hell of a moment.”

Growing Community Media wants to be more about community, and a convener of voices, especially voices not often heard. It will focus on equity, race issues and sustainability. It will talk less to school superintendents and more to parents. It also plans to draw in people from the community and mentor them to foster the next generation of reporters and community leaders.

Form of transition: A new nonprofit, Growing Community Media was created. The 14 shareholders of Wednesday Journal Inc. donated their stakes to Growing Community Media. Wednesday Journal, Inc. was dissolved in January 2020.

Current status: The IRS approved Growing Community Media’s application for tax-exempt 501(c)(3) status in April 2020.

Legal resource/attorneys: Hoogendoorn & Talbot LLP,

Chicago Community reaction: An initial fundraising drive raised $100,000 from more than 1,000 readers in a few weeks. “There is a sudden realization in Chicago that community journalism is on the verge of extinction and they need to step up,” Haley said. He held a series of breakfast meetings with community leaders and was heartened by the understanding of the role of community newspapers and pledges of support. “You are the glue that holds this whole place together, people said. If you aren’t here, how do we know the work of the other nonprofits; where is the accountability of government?”

Fundraising: The goal is to build a sustaining blend of advertising, reader revenue, local philanthropy and foundation and corporate support. Early on, Haley reached out to the local community foundation, which has been encouraging and supportive, including with a recent $5,000 grant to support coronavirus coverage.

Haley received conflicting advice on hiring a development director – “It’s your most important hire to don’t hire one” – “so it feels like a crapshoot.” The nonprofit brought on a development consultant in late 2020. Fundraising has involved a mix of a lot of one-on-one meetings and meetings with affinity groups of 20-30 people to ask for funding for specific editorial positions to cover equity or environmental stewardship.

The community has been supportive. As of March 2021 the nonprofit raised more than $300,000 from readers and donors and built a 14,400-person email list. More than 1,000 people agreed to donate. A fundraising appeal letter at the start of the pandemic brought in $40,000 in two weeks from 600 people. “I am kind of stunned,” Haley said, “People are giving $500 or $5,000. Readers are coming around to the idea that they need to pay for it,” Haley said. But it’s a never-ending task: “You gotta ask and ask.”

What changed: In re-orienting to be a fundraiser and even more community-based, Growing Community Media will move from a five-person board of owners to a nine- to 11-person community board. The goal is to be more inclusive, with representatives of the seven neighborhoods they cover, with diversity of gender, age and race. Haley will move off the board and become executive director reporting to the board. Also, the pandemic accelerated a shift into digital publishing.

Nonprofit funding mix: Pre-conversion, the revenue mix was 70 percent advertising and 30 percent print subscriptions. The website is free. The post-conversion plan was to replace advertising with a 30/10/60 share of donor revenue, subscription and advertising. Events may be part of the mix, but Haley is cautious about counting on them for much revenue. The newspapers had hosted community conversation events, and some had great attendance, but others flopped.

Biggest surprise: “Our mission for 40 years was to be a for-profit, but never solely focused on profits,” he said. Still, being a nonprofit “is a really different mindset and I don’t think I really understand that fully. I am still figuring it out,” he said. “The culture in the company needs to be different in how people think of connection to community, even though I am proud of our community connections. We need to think differently about connection to readers.”

Pros & Cons: For many news organizations, political commentary and endorsing candidates for election are important editorial functions that Hoogendoorn warns may be difficult for some publishers to let go of in order to maintain nonprofit status. He expects a publisher may challenge that concept, which he said, has never been constitutionally tested.

Advice:

• You must answer the fundamental question, Hoogendoorn warns, of “do you really think that you can raise donation dollars?” What are the demographics of your community? Is there enough wealth to provide support? Do you have the kind of community relationships that will result in financial support?
• Fundraising needs to be woven into the work of the nonprofit and will be a large and ongoing part of the chief executive’s job. “Heavy donors want to get some face time with the head of the organization,” Hoogendoorn said. Staying close to your donors is a different relationship than staying close to your advertisers, and a new challenge.
• Be cautious in working with fundraising services that take a percentage, which the IRS and nonprofit best practices frown on, Hoogendoorn warned.
• Think about how you will stop making political endorsements and anything that could appear to be political promotion. That’s a big change for many publishers.
• If you’re considering the nonprofit path, get going. “For legacy publishers, I don’t see any other path. It’s this or disappear,” Haley said. “The advertiser-driven model isn’t going to succeed in future.”
• Plan ahead. IRS reviews are taking six to nine months. “You can’t do it fast,” Hoodendoorn said.