“When markets fail, it’s time to pay attention.”
With 30 years of experience as a venture capitalist—and nearly a decade as co-founder of the Texas Tribune, the nonprofit darling of digital news startups—John Thornton thus sounded the alarm to Colorado’s civic leaders concerned about the state of Colorado’s local news ecosystem.
“And when markets fail, philanthropy enters,” added Elizabeth Green, CEO and co-founder of Chalkbeat and co-founder of the American Journalism Project.
In November, Thornton and Green joined the Colorado Media Project to discuss the crisis in American journalism—which they estimate to be a $1 billion-per-year problem, based on cratering newspaper economics and journalism workforce. Over two roundtable discussions with civic leaders hosted by the Colorado Forum and the Gates Family Foundation, Thornton and Green introduced the the idea of “venture philanthropy” as the smartest investment vehicle for supporting civic news organizations, or CNOs.
Defined as “adequately capitalized social news enterprises that aggressively combine philanthropic and commercial revenue sources,” CNOs have proven to deliver the only consistent year-over-year growth in the local news business, Thornton stated. In fact, he said that in the last decade, their total annual budgets have increased 10-fold—from $30 million to nearly $400 million—or roughly the size of the daily newspaper subscription market.
Before joining forces to launch the AJP, Thornton and Green independently arrived at this conclusion in parallel, through their experiences launching the Texas Tribune and Chalkbeat, respectively.
Like many digital journalism entrepreneurs, Green bootstrapped her fledgling education news site from a New York City basement before merging operations with Denverite Alan Gottlieb, a former journalist who was running a similarly shoestring operation then known as Ed News Colorado. Neither outlet had specialized business staff on its own, but together they formed what is now one of the nation’s most successful single-issue news networks, with 45 employees (30 newsroom and 15 tech, revenue and operations) covering education news in seven American cities. Disclosure: Gottlieb now works as a consultant for the Colorado Media Project.
Today, Chalkbeat has an entire revenue team, and Green says the network is “positioned to grow as a business, as well as a newsroom.”
Which is where venture philanthropy enters the picture: Chalkbeat is an example of the type of news outlet poised for investment through the American Journalism Project—which currently is raising a first fund of $50 million, which it plans to invest across 25-35 nonprofit newsrooms nationwide. However, rather than to subsidize reporting at these outlets, this money will be allocated specifically to pay for business and technology personnel. This “slack capital” is meant to promote growth and sustainability by ensuring the outlets achieve a balanced distribution of audience support, philanthropy, and corporate sponsorships—a practice that John affectionately deems, “revenue promiscuity in service of mission fidelity.”
More than a fund, the AJP is designed to start a movement, say Green and Thornton—one that they hope prompts a sea change in the traditional role that philanthropy has played in supporting local journalism, by broadening its focus from public radio and television to include more nonprofit digital startups that are poised for impact.
The stakes are high, Green said. “Journalism steers the middle toward informed decisions.” The loss of shared facts and a public commons correlates directly to an “erosion of the political center.”
Thornton called on Colorado’s civic leaders to step up their collective contributions to nonprofit news in the face of such existential threats, suggesting they target the amount currently spent annually on the ballet (which Thornton was quick to point out he also supports, even more over his lifetime thus far than journalism.)
After spending time with civic leaders at the Colorado Forum and Gates Family Foundation events, Thornton and Green said they were encouraged by the momentum surrounding the Colorado Media Project and the community at large. In the face of dramatic upheaval, Colorado has confronted the local news crisis head-on, coming to many of the same conclusions and joining in the same movement the AJP leaders are seeking to spark nationwide.
“It’s an extraordinary energy here in Colorado,” Thornton said. “We wish it were a lot less extraordinary, because it’s going to need to happen in a lot of places.”