Nieman Foundation at Harvard
Last week, the Institute for Nonprofit News released its seventh annual Index Report, based on a survey of its members earlier this year about the state of their coverage, revenue, staffing, and audience in 2023. The survey data from 346 member outlets, as “the most comprehensive dataset on nonprofit news in North America,” is an important resource for taking the pulse of trends and changes across the nonprofit news sector.
Over the past seven years that INN has studied the nonprofit news sector, “the signals have pointed in the same direction: growth,” INN CEO Karen Rundlet, research director Emily Roseman, and Calvin University associate professor Jesse Holcomb write in their overview of the latest report.
But this year, “the signals were a little more mixed than usual.” While the sector is still growing, that growth is slowing, by some metrics. And audience data for 2023 shows that across all outlets surveyed, average monthly unique web traffic visits declined by about a third compared to 2022. (We’ll get more information about audience trend data from INN in a separate report this fall.)
Here are some of the key takeaways:
INN membership grew 11% between 2022 and 2023 (INN reports having more than 450 member outlets). That’s a slower rate of growth compared to last year, when membership grew by 17%.
Like last year’s report, this year’s Index notes that this growth “did not translate into more competition over a static or shrinking pool of resources.” In fact, this year, growth in field-wide revenue well outpaced the expansion of INN’s membership, growing about 22%, “totaling just under $600 million” — a small increase from last year’s 19% revenue growth.Local outlets continue to be a key driver of INN’s membership growth, as they have been “over the last decade, and particularly since 2017.” The Index reports that local outlets “continue to launch and join INN at a faster rate than investigative and explanatory outlets,” and expects them to move from their current 48% proportion of members to a majority by next year: “INN expects local outlets providing ‘news of the day’ to make up the majority of nonprofit news by 2025.”
For now, the majority of INN members have a primary focus on either explanatory or investigative reporting, rather than “news and events” coverage: “In 2023, 6 in 10 organizations focused primarily on in-depth, time-intensive news, including investigations and explanatory reporting.”
Around a third of outlets saw a decline in web visitors, while close a fifth reported flat traffic from 2022 to 2023. In better news, a little over half of publishers who provided data for both 2022 and 2023 increased web visitors, and almost six in 10 increased their email newsletter subscribers. (One-third saw their subscriber numbers hold steady, and one in 10 saw a decline.)
There’s a big difference between how local outlets versus national and global outlets reach their audiences online. Because they’re often trying to serve an audience of 100,000 or less, an overwhelming majority of local nonprofits focus on direct distribution, on their own platforms, mostly on the web. Hearteningly, “local outlets are finding success with building revenue from direct audiences (including small-dollar donor giving, and earned revenue).”
On the other hand, national and global outlets are targeting audiences “of multiple millions” and rely much more on third-party distribution, meaning “partnerships with other news sites, print publications and public radio,” to achieve that scale.
INN plans to release an Index Deep dive focused on “additional audience and distribution findings” this fall.
Three in four INN members surveyed either grew or maintained revenue from 2022 to 2023 (down from more than 80% between 2021 and 2022). This growth wasn’t just concentrated among the outlets with the most revenue already (contrary to what the Matthew effect would predict); on the contrary, “The largest organizations (by revenue amount) showed weaker growth in that time than smaller organizations.”
“The reasons for this are likely multifaceted,” the authors write, “tied to broader trends in philanthropy and underwriting, but it does appear that — at least among big-budget organizations — gravity may be asserting its pull.”
A little over half of the 125 local outlets INN surveyed in both 2022 and 2023 saw their total revenue increase within that period. The local outlets that experienced revenue growth tend to be younger, and leaner, with lower annual revenue. On the other hand, “local outlets that saw declines tend to have bigger budgets than the local outlets overall in the trend set.”
Across the nonprofit sector, whereas the median revenue per outlet grew precipitously from 2021 to 2022 — from $373,000 to $477,000 — that growth now seems to have leveled off. 2023’s median revenue was basically identical to 2022.
INN breaks down trends for three specific revenue streams in its report: individual giving, foundation funding, and earned revenue.
For all types of nonprofit outlets, foundation funding continues to be the biggest piece of the revenue pie, accounting for about half of all nonprofit news revenue.
Local outlets still get less foundation funding in proportion to their national and global counterparts, though the disparity has narrowed a bit since last year. Local outlets employ 28% of full-time employees within the nonprofit news sector, yet receive just 20% of foundation funding; meanwhile, national and global outlets, which employ 45% of the sector’s staff, received 57%.
From 2022 to 2023, about half of nonprofit news outlets grew individual giving, while a fifth saw steady levels of giving and a third saw declines. These trends held true for both larger organizations and smaller, local outlets, but INN notes that “organizations that primarily serve communities of color are less likely than other outlets to have grown their donor giving in the last year.” (INN also reports that “serving communities of color is either the primary mission or one of several core priorities, as outlined in their mission statement, for 60% of nonprofit news outlets,” while more than half say they target an underserved community that isn’t defined by race or ethnicity, such as a low-income, rural, or immigrant community.)
One key area for publishers to think about, if they aren’t already: earned revenue, according to the Index. “Earned revenue, including dollars from advertising, underwriting and sponsorship, is perhaps the most underutilized revenue stream for nonprofit news,” the authors write. But there are signs that may be changing: earned revenue, especially advertising, has made up the ground it lost during the pandemic, with median earned revenue coming to $20,000 for 2023, compared to just $12,000 in 2020.
Earned revenue comprised 17% of all nonprofit news revenue in 2023, compared to 10% in 2017.
Among outlets that are pursuing earned revenue, direct ads are overwhelmingly dominant: “Almost all (more than 80%) of advertising and sponsorship sales in nonprofit outlets are direct sales, as opposed to programmatic or ads sold by another organization,” the authors write. “Direct sales require more staff time to market, sell and place than programmatic or ads sold by other entities but benefit outlets’ ability to set their own price and control the quality of the ad.”
The sector has seen a modest increase in outlets spending money to make money. In 2017, revenue generation accounted for 10% of field-wide expenses; in 2023, it constituted about 14% of those expenses. But bigger outlets are the winners here: INN states that “larger and more established organizations are more likely than their peers to spend more on revenue generation.”
It’s somewhat tricky to separate the advantage of being bigger from that investment in revenue:
That investment seems to pay off, although it’s a bit of a chicken or egg scenario: Outlets that spend 20% or more of their total budget on revenue generation report a total median revenue of $640,000, while outlets that spend 4% or less of their budget on revenue generation bring in about $152,000 in revenue.
More people are working in nonprofit news. Digital-first outlets now employ more than 4,500 people across editorial and other staff (with two in three people working on the editorial side). That’s a 17% increase from 2022 to 2023, compared to a 15% increase from 2021 to 2022. Just one in 10 staff are dedicated to revenue generation (with 7% of all personnel focused on charitable fundraising, and 4% on earned revenue).
Local outlets tend to have around four people on staff, while national and global outlets have a median staff size of 10 — figures consistent with last year’s Index.
A growing number of outlets are reporting that unpaid volunteers “play significant roles in their operations.” More than a third of outlets said volunteers play important roles in executive leadership, editorial assistance, and fundraising, up from 28% five years ago (though INN notes that the question wording was slightly different in that survey). INN attributes that growth largely to the proliferation of local nonprofit startups; almost half (46%) of the 150+ local outlets surveyed said that volunteers play a key role in their organization (and 16 outlets, including eight local outlets, said they have no paid executives).
These volunteers fulfill a variety of functions for the outlets they support — most, six in 10, support editorial operations, and one in 10 supports revenue development or executive administration. Of note in the latter category: At multiple outlets, board members are acting as unpaid executives, and “often take on executive or editorial tasks that are outside their role.”
Volunteers can help keep the lights on, but a structural reliance on them can create risks to operational resilience. “Volunteers represent one way that bootstrapping outlets can operate with lean budgets and more established organizations can engage community members in their work,” INN notes. “Volunteer burnout and churn, however, may pose challenges for managers and ongoing staff sustainability.”
