Sarabeth Berman, CEO of the American Journalism Project, discusses the organization's approach to helping nonprofit news organizations build strong, sustainable businesses. She shares insights from her unique vantage point, having come from outside the world of journalism. The conversation also delves into AJP's collaboration with OpenAI, examining the evolving role of AI technologies in shaping the future of news.
(02:46) – The mission of the American Journalism Project
(06:48) – Coming from outside of journalism with a sense of what’s possible
(16:52) – Why local news matters to communities
(23:34) – AJP’s partnership with OpenAI and AI’s implications for journalism
(34:01) – AJP’s programs for newsrooms
(41:56) – Philanthropy and building strong business teams and practices
(47:13) – Supporting ethnic media and collaborating across the ecosystem
(55:21) – Diversifying newsroom revenue
(58:08) – Rapid-fire questions
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- Tim Regan-Porter: bio, Twitter
Sarabeth Berman serves as the Chief Executive Officer of the American Journalism Project (AJP), the first venture philanthropy dedicated to local news. AJP makes grants to nonprofit local news organizations across the country, supporting the successful launch of new enterprises and partnering with existing news organizations to grow and sustain their businesses. Since launching in 2019, AJP has committed more than $44 million in investments in its growing portfolio of 37 nonprofit local news organizations. Fast Company recognized AJP as one of the most innovative companies of 2023 for its work building a future for local news.
Sarabeth joined the AJP team in 2020, serving as the organization’s first CEO. Previously, she was Global Head of Public Affairs at Teach For All, a network of social enterprises in more than 50 countries, where she led communications and marketing, public-sector partnerships, and research and evaluation. Before joining Teach For All, she spent seven years in China, where she helped build Teach For China and managed a Chinese contemporary dance company. She was a 2006 Henry Luce Scholar based in Hong Kong.
A graduate of Barnard College, she and her husband, journalist Evan Osnos, live in Washington, DC, and have two children. Sarabeth serves on the boards of Capital B and the Mark Morris Dance Group.
Sarabeth Berman [00:00:00]:
People thought of philanthropy as the opposite of sustainable meaning. If you are taking philanthropy, you are not sustainable. And I came from the Teach for America world where they were raising $300 million* a year. I mean, no one was arguing, is Teach for America sustainable? And starting to think about philanthropy as a revenue stream that with a practice and with a real discipline around raising money, you can bring in sustainable philanthropy. No individual philanthropist is sustainable. Over the long term, they may continue to fund or not fund, but in the aggregate, you can build a revenue stream from philanthropy that is sustainable. And that mindset, I found, was somewhat new in this sector and was useful to bring.
Tim Regan-Porter [00:00:58]:
Welcome to the Local News Matters podcast, where we explore pathways to stronger journalism, better businesses, and healthier communities. I'm Tim Regan-Porter, CEO of the Colorado Press Association. In each episode, I sit down with guests from newsrooms and others in the local news ecosystem to highlight the innovative work of local newsrooms and those that support them, as well as the crucial questions they face.
This episode I talk to Sarabeth Berman, CEO of the American Journalism Project.
AJP is one of the most interesting support groups in the local news ecosystem. As you’ll hear us discuss, they bring a unique focus on business and operational rigor to mission-driven, nonprofit local news. Since launching in 2019, AJP has committed more than $44 million in investments in its growing portfolio of 37 nonprofit local news organizations. Fast Company recognized AJP as one of the most innovative companies of 2023 for its work building a future for local news.
Sarabeth joined the AJP team in 2020, serving as the organization’s first CEO. Previously, she was Global Head of Public Affairs at Teach For All, a network of social enterprises in more than 50 countries, where she led communications and marketing, public-sector partnerships, and research and evaluation. Before joining Teach For All, she spent seven years in China, where she helped build Teach For China and managed a Chinese contemporary dance company. She was a 2006 Henry Luce Scholar based in Hong Kong.
If you like this episode and what we're doing more generally, never miss an episode by signing up for our newsletter at lnmpod.com.
And now I bring you Sarabeth Berman.
Welcome, Sarabeth. Thanks for joining me.
Thanks so much for having me.
The mission of the American Journalism Project
So I've wanted to talk to you for a while. I've been following AJP since it was launched, and part of what I really appreciated since that launch announcement was I think AJP American Journalism Project is really doing something unique or at least rare in the ecosystem. Understanding the need not just for good journalism and meaningful and equitable engagement, but know maturity around business and business models, financial, operational practices. It's the disruption in that latter that has really caused us so many problems. And AJP has really, I think, brought a lot of focus and rigor to that and I think that's very much needed. And even beyond that, looking over how AJP describes itself, there's even a more unique spin on the approach. You use the term venture philanthropy, which is a phrase we don't hear often, and you're really bringing that business rigor to nonprofit newsrooms, which is also something we don't see very often. So can you just give me the elevator pitch of what AJP is and what do you see as the unique approach that it is bringing to the ecosystem?
I think what you just framed in your question is exactly right. The why of what we do is that we know that the decline of local news is having really terrible implications on the health of communities and on our democracy. And that we think great journalism that is reflective of communities and that engages communities can have really positive impacts on communities. So that's the why. But the what we do is a really sharp focus on building sustainable news organizations that can serve communities and that can thrive over the long term. We see the problem that we're trying to solve is the market failure, the sort of systemic market failure that we've suffered in local news across the country. And therefore, given that is ultimately a business problem. The business of local news isn't functioning the way we funded local news. For a century and a half of using advertising, majority advertising, to fund local news is no longer working. And therefore we feel the imperative is to have a laser focus on building smart, sustainable newsrooms that can bring in diversified revenue, including philanthropic revenue, to support the newsroom. So we call ourselves a venture philanthropy, which means we have raised philanthropic capital and then we reinvest that capital in local news organizations with a focus on getting a return on our investment, not back to AJP, but back to the organization in the form of more diversified revenue that can sustain over the long term. We have a very diverse portfolio in terms of the size and stage of the organizations. So we help to launch new organizations and we also help to grow existing organizations. And we've set a goal for ourselves that for the investments that we make, that we get a two to three X return on every dollar that we invest in the organization. And to date, we're about three and a half years into this. We're happy to report that we've far outperformed that. So we've gotten close to a five X return on our first investments. Meaning for every dollar we've put in a year we're getting close to $5 in more diversified revenue back to the organization. That then can be used to build up reserves and to hire more journalists to do great journalism.
Coming from outside of journalism with a sense of what’s possible
Yeah, it's exciting to read your annual report and hear what you're doing. And when I reached out to you, it was shortly after the Knight Media Forum, which I may have talked about too much on this podcast. But during the Knight Media Forum, you had a reception where you had your grantees stand around in a very large circle and for the guests there, talk about what they were doing. And of know on the main stage, I remember very distinctly, completely blanking on her name, from Mississippi Today…
Mary Margaret White, who's a force. Fantastic.
Yeah, she is fantastic. But I remember her talking about all the things that she has learned working with were some of them were just basics like reserve funds and how much she should have in it. And some of those little things maybe for some were really transformational in helping her shore up the organization and then hearing your grantees just tell story after story about what they're doing in their communities, the journalism they're doing that's making a difference and the revenue they're generating and the sustainability. It was so inspiring. And sometimes these journalism conference can be a little morose and angsty, but I felt very inspired and hopeful coming out of that. And so I'm curious. You came to this job really from outside of journalism, and did you come to it with that kind of trepidation and baggage that a lot of us who've been through this disruption have had, or did you come to it with a sense of what's possible?
I think I came to it absolutely with a sense of what's possible. But most importantly, what I came to it with was a real belief in the importance of journalism and a belief that we really don't have a choice but to figure out how to make this work. And so I agree with you that being in the company of the organizations that we fund in our portfolio is really thrilling. And I think it's because we're in the corner of the journalism industry that really isn't about managing decline. It is about growth. It's about birth. It's about thinking about how you build new models. It's about adding journalists. It's about really re envisioning how these organizations are structured, how they're financed, how they deliver local news to communities. So there's a sense of momentum and possibility, and that is really thrilling. My own background, as you say, is I come from the nonprofit industry. I spent about seven years living in China, where I worked first in the performing arts and then in helping to build an organization called Teach for China, which is based on the Teach for America model. Along the way, I met my husband, who is a journalist. And I think women leaders are often hesitant about talking about the influence their spouses have had on their career. But this undoubtedly had a very essential impact on my career because as a young woman, I was living in China and met my husband, who at the time was the Chicago Tribune bureau tree chief covering China right after the 2008 Olympics. I remember him taking down the plaque of the chicago Tribune bureau because the bureau was closing down, he sent it back home. And we were really feeling the contractions in the industry because, of course, one of the first things to go were the foreign bureaus. He got one of the few jobs that remained as The New Yorker correspondent in China. So we remained for many years. But I got a very firsthand view to both the extraordinary power of journalism and the craft of journalism. But also when you live in China, a country that doesn't have a free press, you become really acutely aware of the value of a thriving press. And I think that's what ultimately made me feel very connected to the mission. After we moved back from China, I started at an organization called Teach for all, which is a network of organizations around the world that are replicating the Teach for America model, or innovating on the Teach for America model in their own countries. And in a lot of ways, Teach for all has elements that are very similar to what the American Journalism Project is trying to do. It's a central organization that is supporting nonprofit organizations around, in this case, the world, to learn from each other, to become thriving, sustainable organizations that deliver impact on communities. And Elizabeth Green, who was one of the co-founders of the American Journalism Project, founder of Chalkbeat, which is a really excellent nonprofit newsroom that covers education in many markets across the country. She was aware of Teach for all from her coverage of education, and she spotted that what we needed was a kind of skill set and mindset around how you build thriving, nonprofit, mission driven, really, movements, which is what Teach for all and Teach for America have. So she was the one who called me up and suggested that I get involved.
I want to dig into a little bit of how that background might influence what you bring. I've long thought and talked about, and certainly others have, but I don't think we talk about it enough in the industry that the problems we're facing as an industry really aren't unique. And there are lots of things we can learn from the nonprofit sector, from other for profit sectors. My own background, I've had multiple careers starting in tech and working with Fortune 500 companies and state and city governments in the early days of the Internet, started a music magazine, started a journalism collaborative at a university, and worked at one of the newspaper chains. And I think each of those experiences, as diverse as they are, allowed me to bring a fresh perspective. And I think I'm certain the same has happened with you coming in. Do you have some reflections on maybe what your background has allowed you to bring to the table and see things maybe a little differently?
Sure. I think because I've come from mission driven organizations and nonprofits, I came at this with a sort of starting point that journalism is a public good that is really an essential part of a thriving community and a thriving democracy. And what the task at hand is, is to really help philanthropists and community members understand that and feel the role that local news plays in their communities and then use that as a way to build a sustainable business model. For instance, what we've come to realize with nonprofit news is that this is much less of an exchange of goods. We hand you content, you pay for the content. It really is an understanding that not only do I need this local news, but my neighbors do. And we're calling upon individuals and philanthropists to support it because they believe that this is something that's essential to their communities. I think that mindset is something that I brought from coming from the education sector. I think another mindset is that I've noticed when I came to this sector that people thought of philanthropy as the opposite of sustainable, meaning if you are taking philanthropy, you are not sustainable. And I came from the Teach for America world where they were raising $300 million* a year. I mean, no one was arguing, is Teach for America sustainable? And starting to think about philanthropy as a revenue stream that with a practice and with a real discipline around raising money, you can bring in sustainable philanthropy. No individual philanthropist is sustainable. Over the long term, they may continue to fund or not fund, but in the aggregate you can build a revenue stream from philanthropy that is sustainable. And that mindset, I found, was somewhat new in this sector and was useful to bring.
Absolutely. And I really appreciate the fact that in the way AJP talks about itself and how it works with newsrooms, you're talking largely about nonprofits, but you're using business terminology. You're saying business. My wife works in nonprofits as a development director for a nature preserve. And I keep trying to explain to her, you are a business, it's mission driven, it's all of this. But there's a lot in common that nonprofits have with for profits. Nonprofit is not a business model, it's just a tax designation.
I mean, that's absolutely right. These are businesses and thriving nonprofits are very well run, have great operational infrastructure and capacity and leadership. And to make the nonprofit model sustainable, it takes all of those things. And so we bring a mindset that these organizations need to be really professionalizing and are professionalizing, and that if they do so, this is a very smart model that could really build back local news across the country.
Why local news matters to communities
Absolutely. And before we get too much further, this is a bit of preaching to the choir on a podcast called Local News Matters. But a lot of the people you talk to, a lot of your content on your website, you've got a whole section on why local news. Can you give me the elevator pitch you give to community members and philanthropists on why they should care? Why does local news matter?
Over the last two decades, we've all felt this really seismic shift in local news across the country. Thousands of papers have closed, 60% of journalists and editors have lost their jobs. And so even in communities where there are still local news, many of them are really hollowed out and not able to provide the kind of civic value that they once did. And there are even more communities that often say that they never felt very well served by local news and that there has always been a void in local news in those communities. And the data on this crisis in local news is very clear. There's research that shows that the decline of local news contributes to polarization in our country, meaning people are less likely to split their ticket in markets that don't have a local newspaper. We used to vote on the issues, we now vote by the party. There's really clear data that the decline of local news contributes to the decline in civic participation and voter participation at the local level. That makes sense. Of course, if you don't know what's going on in your community, why would you show up at public meetings? Why would you run for office? Why would you vote? Also, the accountability role of local news is pretty well documented. We often talk about in the news industry about the role of holding the powerful to account. But it turns out that that is real. There's data that shows that government waste increases in communities that don't have a local paper or corporate crime increases. HPS put out an interesting study on that. So, for all these reasons, the decline of local news is really an important contributing factor to the erosion of our democratic system and the culture around our democracy and around the health of communities. And so, for this reason, we really see this as a market failure. And what we mean by that is, look, the rise of the Internet disrupted a lot of industries. Blockbuster used to have thousands of stores. I think. Now it has one lonely store in Bend, Oregon, that was really good for consumers. We all enjoy Netflix and Amazon and the things that replaced that because of the Internet. But in this case, the Internet disrupted the local news industry, and that has been bad for us. We now have far fewer of the frontline, original reporters who are helping us collect information and facts about our communities. And so when we have a market failure, we have a few arrows in our quiver as a society of what we do. One is we have a philanthropic sector that is enormous and should be really looking at this issue as a priority. And increasingly, we're seeing that it is that people that local news really is a foundational aspect of really all the other issues that philanthropists may care about. If you care about education, you certainly want the school board and the charter school board to be covered. If you care about health, you want to make sure that the health care system in your community is well covered. Philanthropy is a really important tool that we have. And then, of course, public dollars is another tool that we have when we have a market failure. And I think that there is a role for more public policy that supports local news in smart ways, that upholds editorial independence, but certainly is something we need to be taking a good look at as we try to rectify the challenge that we're facing right now.
Absolutely. And I think what we're seeing is kind of a falling apart of a whole ecosystem just from the news production standpoint. The New York Times, the Washington Post, Wall Street Journal, the reporting on those national publications is great, and some of them are doing about as well as they've ever done financially. They figured out the reader revenue puzzle. But if these local news outlets aren't there, so much slips through the cracks. I mean, we saw what happened with George Santos and that sort of feeder chain of people paying attention to local news fell apart, and his malfeasance didn't get reported until late. We see that over and over again, where if we don't have people at the local level and what's gone on with school boards, city councils, it's becoming increasingly politicized, and we don't have the reporters there that we used to. And I think that's just one part of our polarization and sort of the increase in all of the problems that you elucidated that happen when local news disappears.
Yeah, I really agree with that. And I think I am fundamentally optimistic that this is a solvable problem. And part of my optimism comes from the fact that it's actually, compared to so many of our big societal challenges, it's not that expensive to solve. There has been several estimates out there about what would it actually cost to bring what we've come to call as minimum viable journalism for our democracy. Right. And estimates span from you could build an industry, a kind of new industry that is somewhere between $2 billion and $10 billion a year. And compared to so many of our large scale problems, climate change, inequality this really is doable. And so I come at it thinking we have to be very thoughtful about it, we have to be very strategic about it. But it is actually doable to fund a new or evolved local news ecosystem that provides original reporting across the country.
AJP’s partnership with OpenAI and AI’s implications for journalism
Right. And I want to dig into the projects you have going, the partners and newsrooms you work with, what the diverse revenue sources look like. Before we do that, let's talk about the news you made last month in your partnership with OpenAI. So describe what you're doing with them and why you're doing it.
So OpenAI actually approached us last month a little bit earlier, two months ago. And they talked about the fact that the kind of edge of collecting information, which is one of the fundamental roles of journalism, going out into your communities and learning new information and documenting it, that is something AI is never going to be able to do. And they know from the data that I was just talking about that it's essential to our country and society to exist. And they felt like the journalism community needed to be beginning to think about how AI could be a tool to support their work. And they came to us and said, we've been watching what the organizations you're working with are doing and we'd be interested in supporting your work. And we came up with a project to really just support the experimentation of smart applications of AI within news organizations. It's our belief that the rise of AI is going to have a fundamental impact on how we as society engage with information and news. And it's essential that news organizations are thinking really smartly about how these tools can and can't be deployed to support them. So they have given us a grant. It's really sort of a no strings attached grant, but it's a significant grant, a $5 million grant, to hire some people internally at the American Journalism Project, what we're calling a product studio that's going to really support our portfolio in thinking through how to use these tools to bolster their work. We are then also re granting out to many of the organizations within our portfolio to enable them to free up the capacity, mind space, time to experiment with these tools. And then we will be trying to capture what's working, what's not working, what best practices we need, what guardrails we need, assessing the tools that are out there. And we also were given about $5 million worth of API credits at OpenAI, which we can use or don't have to use. So we won't exclusively use OpenAI tools, but we have access to them if we'd like to use them. And it is my perspective that local news organizations, really every organization in the country, every company in the country needs to be grappling with the impact of AI on their work, on their workforce, and how to deploy it in ways that bolster the work and doesn't undermine it. And so we signed this partnership. I think the other thing on our mind was that, look, the big media companies across this country are already thinking, deploying teams to look at how to use generative AI smartly. And local news organizations, which are very strapped for capacity, for all the reasons we've talked about, are unlikely to have the mind space or capacity to think about it. And so we wanted to help enable that kind of research and development and testing so that these news organizations that are so important to the health of our democracy are also able to ride with this revolution that I think is underway. This technological revolution that's underway.
Yeah, I think that's great. And it seems like maybe we as an industry were learning from some of our mistakes as the internet and the World Wide Web in particular became a thing where we just kind of slept on it and were in denial. But you're absolutely right, capacity for frontline journalism and editors is minimal and I think they recognize the importance. But they really are going to need support from organizations like yours and mine as well and all of us working together because it's a brand new arena and everybody's figuring it out as they go and if they're not going to be left behind, we need to help them along.
Yeah, I think the key question for us as an industry is how do we use these tools to bolster local news and not undermine it? How do we bolster journalism and not undermine it? And that's the task before us.
Agreed. I know you listened to the episode we did with Dan Grech on AI, and we just lightly touched on sort of where it could go for journalism, which will be a follow up. But I hope we don't just use it to bolster existing revenue. Yes, you can get AI writing your sports story from the box scores and doing some real estate stories and that's great. That's not fundamentally transformational of your business model or the information that's getting out in your community. It's helpful. But the ability of AI to do things like help you dig into data and uncover things that you couldn't uncover at least easily before. I'm talking with Jeff Roberts at the Colorado Freedom of Information Coalition who's also over the National Coalition about creating a chatbot based on their best practices document for open records. So he fields a lot of calls just every day from reporters and citizens as well saying what do I need to do here's the pushback I'm getting, what are my rights? And if they could just ask that to our chat bot and the chat bot is accurate, which is our task, to go make sure it is transformational for reporters and citizens to do their job and hold the government to account.
Absolutely. We put out a call to our portfolio to start thinking hard about ways they want to experiment with these tools and I think from those experiments we're going to learn a lot about the possibilities.
Yeah, absolutely. And one of the things that I'm curious if you have thoughts on this and I think the nonprofit newsrooms will be more insulated in some of this than the for profits. Two of the things that I think back in March, I was really worried that nobody was talking about this but seems like it's coming around. The first thing is intellectual property. And I think the entire, all content producers are struggling with that and I expect Congress will get involved at some point because, as you say, what we do is brand new and unique and can't be generated by AI, but we need to be compensated for it. And I was thrilled to see Open AI cut the deal with Associated Press. They've now come up with some standards. You can now put some things in your robots .txt file, so at least they're going down, I think, the right road to start addressing this. I don't know if hopefully the other players will follow. So that's one issue that I think will get addressed, hopefully sooner rather than later. The other one that I'm worried about that could affect nonprofits as well, is that what happens with our consumption pattern. So if we do come up with the IP and OpenAI and the others are ingesting our information, I don't need to go to your website anymore as a news organization. And the format, it's not just going to be ChatGPT, right? It's going to be embedded in so many apps and audio and video. I can be spoon fed or I can ask it a specific question and never visit your website. And so I think we've got to wrestle with what is our business model. And that's where maybe nonprofits have a leg up because they can still benefit from the branding of it. They'll know who did this work and people will want to donate and support them. But I do worry about subscription models and ad revenue being really affected by just changes in technology and products and usage patterns.
Yeah, I think that that is a very fair set of concerns, and it's why news organizations need to be very nimble in terms of pursuing as many revenue streams as possible to weather what I think is going to be really significant changes in consumer patterns over the coming years. I am a firm believer that as trust continues to erode in really all institutions in our society, but particularly in the press, it's very important to have trusted local purveyors of information. I don't think that the need for that is going to go away. And so I think local news organizations as sort of trusted sources within communities are going to be increasingly important in the era of AI and deep fakes and questions around trust and information. So what we hope is that local news organizations can leverage these tools to support their work, but can really continue to be at the forefront of building the practice around trusted relationships with their communities and around fact finding and fact checking, which is some of the primary role of local news organizations.
AJP’s programs for newsrooms
All right, so let's dig in a little bit into how you work with newsrooms, what kind of services you provide, and what kind of challenges you are working with them on. So how does your relationship start with the newsroom? What are you looking for if a newsroom wants to work with you?
So our programs have several streams. We have what we call our growth grants, where we identify existing nonprofit news organizations that have outstanding leadership, that have already built trusted relationships with their communities, that have strong boards and have already begun to build revenue for the organizations. And we come in and make a multi year growth investment, usually around a million dollars over three years, to help them build out their business and operational teams to strengthen their revenue streams and diversify them. So for instance, we supported VTDigger, which has been around for over a decade in Vermont. It's now the largest news organization in Vermont and really looked to as the sort of paper of record. Although they're a digital news organization of record, they were one of the first investments we made. We helped them build out really their first business team. Their executive director, Anne Galloway, who's a pioneer in the field, did it mostly herself with a little bit of assistance from a sort of junior staffer. And we helped her build, hire a chief revenue officer and a team of folks thinking about advertising, about audience revenue, about more philanthropic revenue, and that resulted in really growing their revenue significantly and being able to hire more journalism as a result. That's one example. So that's our growth investments. We pair our investments with pretty hands on coaching and support every one of our grantees get what we call a success partner. So someone on our team who is helping them think through hiring questions, strategy questions, and how to really build out the business side of the organization. We also do a fair amount of cohort wide learning. We bring our portfolio together in person once a year, we do virtual learning and we provide targeted consulting support for them on whatever it is that their challenges are. So if they specifically have a strategy and an opportunity around audience revenue, we may support them to specifically go deep on building out their audience strategy. Or if they're thinking through their board development, we may bring in a consultant to help them think through how to refine their board and bring on more board members and how to manage their board, et cetera. So those are the kinds of examples that's one stream of work our growth investments. We also are in the startup business and we've been taking two approaches to startups. One is an incubator where we work with talent before their launch, people with really great ideas, really good experience, that make us think that they are well positioned to launch a thriving nonprofit news organization. We give them their initial capital, which is often the hardest capital to get philanthropy, it's hard to be the first mover. So for instance, in the case of Capital B, which you may be familiar with a news organization that launched in 2021 run by Lauren Williams, who was the former editor in chief of Vox, and Akoto Aforeatta, who had been a managing editor at The Trace. They'd both been in and out of black media and mainstream media, digital media, nonprofit media. So they had a really interesting set of experiences, and they also had an interesting idea, which was to launch a nonprofit news organization focused on serving local black audiences. We gave them their first dollars. We also worked with them on creating their business plan, coming up with their pitch, going out and fundraising for more dollars, helping them make their initial hires. And once they were able to raise significantly more capital, we then came in with a follow on investment for a multi year grant. So that's an example of what we've done. We now have a formal incubator program. So earlier this summer, we announced four teams that we're working with in their pre launch stage to help them do market research, help them put together business plans in the hopes that some of them will get to successful news organizations. And then finally, we have a program called our Local Philanthropy Partnerships Program, where we work with local philanthropy directly. We started to hear from local philanthropy all across the country who were very concerned about the state of local news in their community. But philanthropy is not in the business of starting things. They're in the business of funding things. So when you see a problem in your community as a philanthropist, you need to figure out, okay, what do you do about it? How do you support it? And so what we did was develop a program where we work with local philanthropy to do market research and community listening, pretty deep assessments of their markets to understand what is the state of local news right now, how much local original reporting is actually happening in your community. We go out and do surveys and focus groups from diverse community members to really understand what it is that people want from their local news. How are they getting information right now? What do they feel they need? Then we package that all up and we bring it back to local philanthropy and say, here's what we heard. And then we do a solution design process with local philanthropy and other community leaders in that market and really think through, okay, what could we do to meaningfully replace the gaps in local news in these markets? And that has resulted in several cases in the launch of pretty significant news organizations. Last year, we announced the launch of Signal Ohio. They launched in Cleveland first. They're going to be launching in Akron later this year. Houston Landing is another example of this. They launched earlier this year. We have a project underway in Indiana that we'll be launching next year. So, in fact, we just announced the editor-in-chief this week of that new news organization. So we are using that as a strategy to get local philanthropy engaged really early on in doing very big and ambitious projects to replace and really rebuild local news in their markets. And in those cases, when they turn into new news organizations, we have something called our startup studio that is essentially stewarding that process of taking from the capital raise to hiring the senior talent, recruiting a local board. We fiscally sponsor the organization and then ultimately spin it off into an independent organization. So we're using several different strategies to really what we think is really necessary, which is to catalyze the growth of local news across the country and catalyze specifically nonprofit local news across the country.
Philanthropy and building strong business teams and practices
Yeah, so much great stuff there. I want to dig in. I want to highlight a few things. I love the philanthropy work you're doing, with the work you're doing with philanthropy. It's an increasingly important part of local news ecosystem. And with the forthcoming Press Forward from MacArthur, Knight and others, the importance of that's just going to grow. And as you say, a lot of philanthropists, philanthropy organizations, particularly as you get down to the local, but not only that, they're very problem oriented and programmatic in their thinking. So they want to throw money for a program. And starting with that design process, listening to the community is so important and then envisioning possibilities. And also tied in with what you're doing there with philanthropy, your own funding, you're trying to build the teams that will make and keep these organizations sustainable. And as someone who's been around philanthropy for nonprofits for a long time, in and out of journalism arts organizations, many others, one of our chief complaints as recipients is funders tend to not think about the structure, of the needs of the organization in terms of structure. They don't want to fund overhead. They want to fund new programs. And so you're constantly running yourself ragged coming up with something new when you don't have the capacity to do something new. And you're not looking at how is this sustainable, how do we feed what we're learning back into the organization, et cetera. So I love both of those aspects of what you're doing.
Yeah. So, for instance, in the case of the local philanthropy partnerships that have resulted in startups, we have also invested in those startups and our investments are tied entirely to their launch business team. With the point being that if they, from the beginning build strong business teams, they will be able to take this initial philanthropic capital and turn it into diversified revenue, bring in more donors, bring in smaller donors, bring in reader revenue, begin to get advertising revenue, run events, et cetera. And so we stay very focused on making sure that these organizations, alongside getting funding for the great journalism work and the great programmatic work they do, are also building the sort of unsexy but incredibly necessary part of the work, which is the kind of business, financial and revenue raising parts of the organization. I actually shouldn't say unsexy because I think that part of the work is incredibly fun. And that we are attracting some extraordinary talent across the country. That's thinking about it and it takes real kind of community building and entrepreneurial thinking to build these organizations in smart ways. But I think you are accurate in saying that that is always the hardest part of nonprofits to fund.
One of the things that Alberto Ibargüen at Knight said at that Knight Media Forum that he says this has always been his pitch to philanthropy whatever your first priority is, journalism should be your second because that's how people know about your issues, that's how they get involved. Do you find the local philanthropy organizations you're working with, do they understand that? Is that part of the education you're doing?
Yeah, I think that is definitely part of the education. And I think also part of the education is, for instance, we'll talk to an arts funder and help them see that they should absolutely be funding arts reporting in their community and that that is very important to their own arts priorities. On the other hand, we also want local funders to not just care about this as their second issue, but to really understand the ways in which local news helps foster community engagement. One of the funders of Houston Landing is the Houston Endowment and they have really two pillars to their priorities. At least this was the case when we were working closely with them several years ago, which was one is education, an educational opportunity and the other is civic engagement. They want Houstonians to be engaged with their community. And as they thought about what would be a really powerful investment to support civic engagement in Houston, they ultimately decided to make a really significant investment in the launch of Houston Landing because they came to see that there just wasn't enough local news for such a dynamic, diverse and huge city and complicated city as Houston. And so what they came to really understand from this research that we did with them was that local news isn't just sort of secondary to their education priority, which it is, but it's also essential to an informed and engaged community, which I think a lot of local funders do care about.
Supporting ethnic media and collaborating across the ecosystem
Absolutely. I also appreciate it that you mentioned URL Media because I think journalism philanthropy has been a little slow on the uptake for ethnic as well as hyper local community news. People like Joaquin Alvarado and Andrew Ramammy have been beating that drum and working with them. Joaquin, when he was at our convention last year, was talking about going into Houston. There were a lot of philanthropic dollars going in a number of years back and no one talked to the Black publication that had been there for like 100 years. So I'm wondering, are you working with many ethnic publications? Would you like to see more of those pop up?
Absolutely. So when we work with local philanthropy in these markets, one of the very first things we do is go talk to every single local news organization that's there right now and really help the philanthropists see the assets that already exist in their markets and then think about how you bolster them. So for instance, in the Indiana project that I mentioned, we are launching a new news organization. We also supported investment of several reporters in the historically black paper there. Some of the resources are going to sort of shared services for the existing ecosystem. So really when we go into these communities, we think it's really essential that we are supporting the local news organizations that exist that already have strong roots with their communities and the trust of their communities. And also when we do community listening, we make really concerted effort to hear from the many different communities that exist within a community to understand what is it that the Vietnamese community? How do they currently get news? Where are their gaps right now? How would they like to get news? And make sure that when we come back to philanthropy, we're giving them as a robust picture as possible of how we serve the diversity of each community as we've built our portfolio. We think it's a real opportunity that this moment provides, which is a moment to build a local news ecosystem that is far more representative and reflective of an increasingly diverse country than what local news ever was historically. And so we have funded many organizations that are really at the front edge of ensuring that they are reaching the most diverse audiences and also audiences that have not historically engaged with local news. So for instance, we fund an organization in North Carolina called Enlace Latino North Carolina. They were launched by Latino immigrants and their aim is to serve the a million people in North Carolina who are Latinx immigrants. And they are really innovating in terms of how they reach those audiences. They've created a WhatsApp channel because they found that their audiences were on WhatsApp and that's where they were getting information. And so they're doing reporting and then disseminating it through those WhatsApp channels. They have really deep engagement from their audiences. They're reporting out in Spanish, so in people's mother tongue. So that's an example. We have funded an organization in Detroit called Outlier Media whose mandate is to serve those in Detroit who are not being well served by local news, many of whom are brown and black communities, many of whom are low income. And they found that text message was a really strong way to reach those audiences. And so they have the numbers of Detroiters across the city and they message them news and information and then they hear back from their audience and can answer questions and really develop relationships with their audience in those ways. And what's exciting about funding these organizations is not just supporting them in their own work, but also the ways in which the rest of the field is learning from their practices and beginning to adopt those practices so that they can reach more and more audiences and serve more and more audiences.
Yeah, and I think that last part is so important. The things that are really exciting and sexy and those are great examples, every one of them, and there are a lot more. And even the reporters starting a substack to focus on city government, some of those are doing great. And it's so exciting to see what a small group of people can do with a new approach and unburdened by some of the baggage that legacy institutions can have. But I'm curious too. I think there's an increasing recognition in the industry that it's going to take all hands on deck, it's going to take all players and all approaches. Nonprofit, for profit, newsletters, podcasts, print, digital and ethnic publications, hyperlocal, metro dailies. There aren't enough of us to meet the information needs, and we need to kind of work together and learn from each other. And of course, you've really zeroed in on nonprofits. But do you work with any for profits? How do you envision the lessons that you're seeing with your cohorts getting out and disseminating so that these legacy institutions who, ten years ago, their biggest problem might have been hubris, now it's capacity. As we were talking about earlier, they are doing good work. They would like to evolve if they had ten minutes to think about it. So how do you see this sort of fitting together and evolving in ways that kind of lift all boats?
Nonprofit news, these organizations exist to serve communities, to reach their mission of providing information, with the information that they need, providing communities with the information they need, and holding those in power in their communities to account. And because of their business structure, they really can be extraordinarily collaborative in their orientation because their goal is to reach that mission. Meaning almost all of the organizations in our portfolio make their content free and available for republication. So you may be reading a for profit newspaper, but the actual story you're reading has been written by a nonprofit news organization that's in our portfolio. So that's one way that we're collaborating and lifting all boats. I think also we're seeing these news organizations are very collaborative with other news organizations in terms of taking editorial projects on together, really thinking about not trying to compete, but to be additive to the ecosystem, figuring out where are the gaps and how can they contribute to the news organization, to the news ecosystem rather than competing with what already exists. Our perspective is that nonprofit news certainly won't be the only way that people consume news and information in the future, but it is going to play a very significant role in how we fund local original reporting, which the market is not no longer providing at scale. And so our take is that nonprofit nudes needs to grow and can grow significantly. And that's where our focus is. And we are confident and already see the ways in which that is going to support the broader ecosystem.
Diversifying newsroom revenue
Two questions before I go to rapid fire. So, one, you talked early on about working with newsrooms and diversifying their revenue. In what you've seen in working with these newsrooms over the past few years, what does a diverse revenue look like? What are the components that maybe people haven't thought about?
So we think about diverse revenue in several ways. I mean, one is in terms of revenue stream, I think the big revenue streams are advertising and corporate support, philanthropic support, both institutional and individuals, and then also reader revenue. So small dollar donations or small dollar sort of memberships, those tend to be the main revenue streams. But then diversity within those revenue streams, you don't want just one funder, you want lots of funders. And so making sure that you have within each revenue stream as much diversity as possible to make sure that have as little exposure as possible and are able to sustain yourself over the long term. So we're seeing different markets are able to sustain different proportions on their revenue pies. And still within our portfolio, institutional philanthropy remains the largest revenue stream. But we think that actually needs to increase. There needs to be more institutional philanthropy investing in local news across the country. And that that can be leveraged to then bring in more individual funding, more small dollar gifts, more corporate revenue, and more advertising revenue.
Great. And on your website you've got your annual report for last year and an Impact report, which I'd encourage anybody to go read. There's some great stuff there. If you're wildly successful, continue to be wildly successful in five years, what does that look like for AJP and the newsrooms you're working with?
Yeah, we see ourselves as supporting a network of really significant nonprofit news organizations that are expanding into more and more markets across the country. I think in five years from now, we are going to see significantly more philanthropy from the national and the local level, investing in local news. We are going to see more startups getting off the ground, and we're going to see the organizations that exist right now being much larger, frankly hiring more reporters, expanding into more markets across their states. So we really see ourselves at the front end of building a kind of new corner of the local news industry, which is a thriving digital nonprofit news industry.
All right, so now for some rapi-fire questions. And my questions will be short, but your answers don't have to be compared to a year ago. Are you more or less optimistic about the future of local news?
Absolutely more. And if you want the longer answer, I'm more optimistic for a few reasons. I see more funders investing. I see news organizations that are becoming stronger and more sustainable and then most importantly, I see reporting that is having real life impact on people's lives. You mentioned Mississippi Today earlier on in this call. They won a Pulitzer Prize several months ago for their extraordinary series called The Back Channel about the misuse of welfare funding in the know. Several years ago, Mississippi Today did not exist. And it was because of a group of philanthropists, journalists, community leaders who came together to launch Mississippi Today that they now exist and are thriving. And it's those stories that give me real confidence that there is a light at the end of this tunnel.
Absolutely. Stealing from Reid Hoffman, messy desk or clean desk?
Good. I'm not alone. Best single piece of advice you've been given.
So one piece of advice I got, which I really try to practice, is to really try to envision the opposite opinion of yours. And I think in this work, there's not always a clear cut way to go forward. And so what I try to do is really build my perspective, but then also really think through what the counterargument would be. And I find that it doesn't always mean I change my opinion. It means it often doesn't mean I change my opinion, but it helps me be able to really kind of see things in their full nuance. And so often one makes a decision that isn't that there kind of either is no wrong answer or there's no right answer. And so my grandfather used to always say you make a decision and then make it the right one. And so I try to take that one on board as well.
Is there a piece of common advice or conventional wisdom that just drives you crazy in its wrongness or oversimplification?
I got at one earlier, which is it drives me crazy when people think of philanthropy as the opposite of sustainability, because I think that's just not accurate. So that is a piece of conventional wisdom that drives me crazy. That's one that's coming to mind.
As you know, particularly in the startup world and particularly in Silicon Valley, failure is lionized, but failure is an important part of the learning process. Do you have a favorite failure of yours that propelled you to a different place?
Well, I sort of mentioned this early, but I've had an extremely nonlinear career. I started my career in dance. And I don't think of this as a failure, but certainly when I was a young person in college and you told me that someday I'd be working on running a venture philanthropy for local news, I wouldn't at all believe you because I thought that I was going to be involved in dance. And so I think the kind of lesson there is to just let your path there's this Chinese saying follow cross the river by feeling the stones. And I think having your sight set on something too much can cut off opportunity. And so instead I sort of have crossed the river by feeling the stones and have ended up in this really extraordinary perch right now, which feels really exciting and really important. I guess that's to say, in terms of being a dancer, I failed.
Well, I'm glad you're in this industry now, in this industry can chew people up, can drain you, and nonprofits in general can do that. So do you have a favorite thing you like to do or place you like to go to restore yourself and maintain your sanity?
I have two fabulous kids, a five year old and a seven year old. They both maintain my sanity and add to my insanity, but that is most of what I do outside of work.
And then stealing from Reid Hoffman again. Do you have a creative measure of success that you've set for yourself or your team?
Well, what I can say is we went through a vision and values process. I think a lot of companies and organizations write their values, and a lot of them just get pasted on a wall and people roll their eyes because they feel like corporates speak. I love our values. You can see them on our website, and we invoke them all the time. Things like constant learning, things like local first, just a deep commitment in what local communities want. Say what? Local? The needs of local communities. A focus on integrity, a focus on equity. We use our values all the time in the language of our organization, how we make decisions. So it's a kind of compass that I think if you can articulate values that genuinely reflect how you want to operate and then you use them, they can be really motivating for a team.
And then the last question. Three to five pieces of media you would recommend? It could be fun or work related, any format. Print newsletters, podcasts, TV, books.
So I'm a huge audio person. I have my earphones in all the time. I listen to audiobooks. I listen to podcasts. I'm really excited about the New York Times new audio app. I was a very loyal Audm listener, which reads magazine pieces, longform magazine pieces. The New York Times purchased them, so that app has now been retired. I love for fun. I love listening to Smartless. I think they're really funny and just enjoy sort of tuning out and listening to them. And I love hearing kind of creative people talk about their creative process. I really get the delightful privilege of, I make a practice of subscribing to every single one of our local news organizations in our portfolio. So my inbox is very full. But it does mean that unlike most people who are bombarded with national news, I am bombarded with local news. So I get a sense of what's happening in Wyoming and Nevada and Mississippi and Memphis every day in my inbox. And I think that is in a time where I think we all feel like there's an over focus on national trends that is a very refreshing way to consume news and information.
Well, thank you so much for your time. This has been fascinating, and I really appreciate all the work that you do and your whole team.
Thanks so much. That was fun.
Thank you for listening to the Local News Matters podcast, and thanks to Sarabeth for your time and for all that you and your team do for local news and for communities.
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* Corrected, 3:59 p.m. MT, September 13, 2023