Commentary

Nonprofit News Outlets Should Target Recurring Revenue

As publishers transform their business models amid shifts in consumer habits and media spending, more nonprofit news organizations have emerged to provide independent journalism. Like their profit-seeking counterparts, nonprofit news outlets should seek recurring contributions as a key source of revenue, according to the Institute for Nonprofit News.

Recurring donations make up only 5% or less of total giving from individuals for two out of five nonprofit news outlets surveyed by INN. Its membership includes ProPublica, Mother Jones, The Salt Lake Tribune, Chalkbeat, Texas Tribune and the Intercept.

Nonprofit news outlets have room to grow those contributions, if public broadcasters are any indication. The average public media station converts 40% to 50% of their small-dollar and mid-range donors into monthly contributors, according to benchmarks cited by INN.

Its recommendation to boost recurring donations comes as many nonprofit news organizations last year saw revenue gains, despite the economic pressures of the pandemic. Fifty-nine percent of INN members reported their revenue grew from the prior year, and 63% received more donations from individuals. Median revenue from individual giving rose 41% from the prior year to reach $118,000, according to INN’s analysis of organizations with comparable financial data.
In addition to seeking recurring contributions from individuals, nonprofit news outlets also should urge donors to increase their giving. Mid-range donors, or those who give $1,000 to $5,000, cut their contributions by about 20% last year. However, INN’s research determined that more than 40% of small donors have the financial wherewithal to increase their giving.
Nonprofit news outlets tend to be most dependent on major donors, or those who give more than $5,000 a year. They made up 62% of total donor revenue, but INN said there is an opportunity to expand the category of so-called planned gifts, or making donations as part of estate planning.

Only 8% of nonprofit news outlets secure these kind of commitments, suggesting a possibility for growth.

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