Knight Foundation's Investments in Local News Sustainability – Knight Foundation

In February 2019, the John S. and James L. Knight Foundation (Knight Foundation) announced that it would double its investment in strengthening journalism to $300 million over five years, with a focus on building the future of local news and information, which are essential for democracy to function. In early 2020, Knight Foundation and Impact Architects launched this assessment of Knight’s investments in local news sustainability with the goal to better understand the impacts of these investments and promising practices that contribute to sustainability. This report is an interim learning memo assessing these investments after each of these programs has been operating for at least one full year. Some programs have been operating for at least two years.
The main objective of this assessment is to understand the effects of grantees’ interventions in the context of Knight’s goals for sustainability of local news. Knight defines sustainability as “a newsroom where revenue outstrips expenses in a repeatable fashion, when sources of revenue are diversified, and audience size is consistent or growing year over year.” For this assessment, we leverage data to measure newsroom sustainability through a combination of financial health and audience metrics.
We know that the long-term sustainability of local news cannot be divorced from the need for local news organizations to be diverse, equitable and inclusive, with sophisticated organizational practices, and representation from the communities they aim to serve. So, we include these aspects of organizational growth and development in the qualitative elements of this assessment as well.
The assessment includes ten unique interventions being carried out by nine grantee organizations, all of which are business-to-business (B2B) organizations supporting newsrooms through grantmaking, programming, training and networking. This report is the second annual report, following the first published in 2022.
To test Knight Foundation’s hypotheses with respect to local news sustainability, we are gathering comparable quantitative data from newsrooms pre- and post-grantee intervention, as well as over the longer term of two or even three years post-intervention, with respect to audience, revenue, operations and staff. These quantitative metrics, together with interviews to generate qualitative data, are used to answer key questions and provide insights with respect to:
In total, we have data from 181 newsrooms, although the degree of completeness of data provided varies greatly. We have 2021 and 2022 data from 169 newsrooms. We have long-term data from a total of 85 newsrooms with either 2019 or 2020 as the baseline year. A complete list of data included in this report can be found in Appendix A.
The size of newsrooms included in this assessment vary from extremely small volunteer newsrooms to large newsrooms serving metro areas. There are newsrooms that don’t have a single full-time paid staff person and large newsrooms of more than 100 full-time employees (including one that has more than 300). Among the 132 news organizations for which we have the most recent staffing data, the average staff size is 32 and the median is 16. Newsrooms are nonprofit, independent for-profit and individual newsrooms that are part of larger corporations. Average total revenue for 2022 was just over $2 million, while median was half that. Annual revenues spanned from just under $8,000 to more than $14 million. Newsrooms’ digital average monthly users (DAMU) have a similarly wide breadth, with the smallest in 2022 having a DAMU of less than 400 and the largest over 8 million, with an average of around 440,000 but a median of less than 100,000.
From 2021 through 2022, across all newsrooms for which we have complete data, organizations experienced an average revenue increase of 19.1%. When broken down by nonprofit and commercial media, nonprofits experienced an average increase of 28.2%, while commercial media experienced an average increase of 3.3%. The overall increase in revenue is largely due to an increase in charitable revenue (which includes individual donations and philanthropic funding), which increased an average of 33.6% from 2021 to 2022.1,2
We have enough information to calculate the average ratio of operating expenses to revenue from three grantees, demonstrating that for the American Journalism Project (AJP), Institute for Nonprofit News (INN) and News Revenue Hub (NRH) Sustainable Publishing Solutions (SPS) newsrooms revenue is greater than expenditure, suggesting sustainability.3 Newsrooms associated with these grantees didn’t see a notable change in the ratio of expenses to costs from 2021 to 2022.
During the same time period, digital audiences continued to shrink, as evidenced by an average decrease in digital average monthly users of 10.8% and with a median decline of only 2.4%, including decreases across all categories of newsrooms: nonprofit, commercial and public media. Audiences have generally continued to decline across the industry after a high in 2020,4 so the modest decline of the newsrooms included in this assessment can be seen as evidence that they are faring somewhat better than the industry as a whole.
In general, from baseline (2020 or 2021) through 2022, newsrooms participating in grantee interventions reported both average and median increases in revenue. The majority of the increases in revenue can be attributed to increases in charitable revenue. During the same time period, nearly all newsrooms participating in grantee interventions saw decreases in average DAMU. For programs that serve early-stage newsrooms and/or newsrooms that are early in their transition to digital, such as AJP, NRH and BloomLab, there were increases in median DAMU as these newsrooms are at the beginning of building their digital audiences and reflect rapid early growth. Conversely, programs with newsrooms that already had large audiences at baseline saw the largest decreases in audience from baseline to 2022.
While overall trends are helpful, the purpose of this assessment is to understand the extent to which specific grantee interventions move newsrooms in the direction of sustainability. In the tables below, we have outlined key insights about the impact of these interventions on newsrooms, based on both quantitative and qualitative data.
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