A Hard Look at News Sustainability

What's required-- from both newsrooms and funders

Welcome to Second Rough Draft, a newsletter about journalism in our time, how it (often its business) is evolving, and the challenges it faces.

In discussing the future of nonprofit news, “sustainability” is a word you hear thrown around a lot these days. This week I want to ask what that means, what it should mean—and what it shouldn’t.

For me, sustainability means nothing more or less than the goal of building something enduring, an institution that transcends its founders and finds a path to making a continuing contribution to its readers and community. I hope that definition, which feels pretty neutral, can make sense to all of us.

Sustainability means often betting on the tortoise

But if the definition is relatively easy, what are the implications of sustainability as a goal? I think they’re considerable, and fairly profound:

• In the near term, sustainability requires the diversification of revenues as promptly as that can be achieved. I have never been convinced that counting up revenue streams is the key to this. Rather, diversification of revenues means a proliferation of funders, and ideally a proliferation of funder types (individuals making small-dollar gifts, major donors, institutional foundations where possible); plus events when those can be a meaningful net revenue generator; at least a bit of advertising and sponsorship; and other earned revenues as opportunities present themselves.

• From the outset, sustainability requires taking business operations as seriously as editorial. Over time, that means building a robust and independent business staff. As I look around our industry, for instance, I have become increasingly skeptical of the current trend toward indefinitely outsourcing accounting—I think it leaves managers at risk of not fully grasping the dynamics of their emerging businesses, and I have seen this cost some dearly. Similarly, it’s important to establish your own development and human resources functions as soon as feasible, so that you are building capacities that are ultimately essential to a sustainable enterprise. If your content tends toward the risky (as with investigative reporting or work at the frontiers of intellectual property), the legal function should be added to this list.

• As soon as possible, sustainability requires starting to build operating reserves, with the eventual goal of an endowment. The key to realizing this goal is hard-nosed budgeting, by which I mean budgeting rooted in what you have in hand and can realistically and specifically anticipate, not what you would like to have, or even what you think you need to spend to achieve your editorial or mission goals. This is the sort of budgeting that acknowledges that the most reliable growth is organic, and that growth spurts should be rooted in changed circumstances, not merely in your dreams or plans.

Sustainability rules for funding

From the point of view of the news ecosystem (or of funders and others concerned about it), a focus on building sustainable newsrooms should significantly help set the funding agenda, including in ways that are not occurring right now, at least in my view.

First, we should remind ourselves that it is the newsrooms we are seeking to sustainably build, not the intermediaries who serve them. As I said a year ago, and continue to deeply believe, if we find intermediaries thriving and their clients suffering, we should take that as a sign that we are doing it wrong. This past year, overall, does not feel like a success in this regard for news philanthropy.

Next, as implied by what I wrote a few weeks ago, the goal of sustainability is a double-edged sword. It means not throwing good money after bad when organizations, having made mistakes, are failing. The flip side is also true: an emerging newsroom’s success is no reason to discontinue support. Indeed, it should often be seen as a signal to push even harder, and to offer more resources, as its full potential is gauged.

A lesson from market investing

Philanthropy should be, as its rhetoric (but often not its reality) conveys, similar to other forms of investment. But the secret of great investors is not just when to buy, but also when to hold, or to double down. Those who unload every successful investment when they have secured modest returns are doomed to mediocre performance at best.

Sustainability is a key objective in building any new business or sector. But it’s also a shared responsibility, a goal toward which both entrepreneurs and funders can and must contribute. I hope that, in the year ahead, our industry can sharpen its focus in a way that makes the most promising newsrooms genuinely stronger, both in our own moment and with an eye on the future.