• by Melynda Fuller , April 16, 2018

If you’re a supporter of local news, reading the headlines each morning can be an exercise in pain. Too often, another longstanding newspaper has been sold off and stripped for parts, becoming another check in a conglomerate’s notebook.

Unfortunately, with the media industry in peril, few options exist if a paper hopes to survive.

Last week, local newspaper Berkeleyside, serving the Berkeley, California, community since 2009, announced it had successfully reached and closed a Direct Public Offering (DPO), taking in $1 million. The news site became the first ever to undertake a DPO and succeed.

Founded by three journalists with deep ties to the area — Tracey Taylor, Lance Knobel and Frances Dinkelspiel — Berkeleyside had tried out other models to raise funds, from membership programs to subscriptions to events, but came up short each time. 

Then, about two years ago, Berkeleyside did something no other paper had ever undertaken: It pursued and launched a DPO. Taylor and her cofounders applied to the state of California and were granted permission to launch in 2016 with a goal of $800,000.

The paper decided it wouldn’t take investments under $1,000, but in the first year of the DPO, it came up short. The paper was able to raise $500,000 in its first five months, beyond that figure, it became more difficult. So the DPO was extended by another year, and the ceiling raised to $1 million. 

Last Thursday, the DPO ended and the paper met its goal with contributions from 355 investors.

The paper immediately made use of all investments as they came in. To date, the DPO money has allowed Berkeleyside to hire an additional reporter, make its site mobile friendly and expand its events and membership programs. 

But aside from the new possibilities for the publication and its community, the DPO also provides a model for other small news organizations that are struggling to survive, but count a dedicated readership among their assets.

Berkeleyside reports that it has already shared its model with the Sonoma County newspaper Sonoma West, which recently gained permission to launch its own DPO by California regulators.

The Lenfest Institute, which donated $60,000 to Berkeleyside, provides a more detailed account of how the DPO was launched and what the paper learned from it.