An “investment tip” for journalism funders

Psst! Wanna a hot tip? Unlike Facebook’s recent IPO fiasco, this one actually paid off— nearly 3-to-1—despite the recession.

Journalism funders, this one’s for you because it is the story of “The Challenge Fund for Journalism,” a seven-year effort that helped 53 nonprofit journalism groups learn to adapt to the plunging economy, strengthen their organizations, build capacity and raise money.

There were two key ingredients. Each organization received a challenge grant—which they had to match—and tailored coaching to help them develop a strategic plan, build a stronger board, create a fundraising operation, or take other steps designed to improve effectiveness.

The payoff? The 53 organizations received $3.6 million in grants from the Challenge Fund, but they leveraged the money into almost $9.5 million in matches. Nine out of 10 grantees met or exceeded their match requirement by cultivating new donations from individuals, corporations and foundations. Most became stronger organizations because of the coaching. While the program didn’t solve everybody’s money woes, it helped many of them to stave off collapse as they struggled through the worst recession since the Great Depression AND the disintegration of the longstanding business models for journalism.

The beneficiaries included membership groups, content producers and university-based programs. Here is one example from each category:

• The Asian American Journalists Association, a national membership organization, received a $200,000 challenge grant and matched it by raising $393,000. The organization learned how to more effectively engage its board members in the fundraising process.

• The Wisconsin Center for Investigative Journalism, a start-up nonprofit that produces investigative reports, learned to develop a long-term business strategy and to diversify its sources of income. It received a $75,000 challenge grant and raised another $121,317.

• The Columbia Journalism Review, published by the Graduate School of Journalism at Columbia University, was one of the big winners. It leveraged a $100,819 challenge grant by raising $937,890 in matches, tapping a range of foundations, individual donors and subscribers.

"Learning to Fish" Report CoverThe lessons—good and bad—from the program are detailed in the TCC Group’s just-released report, “Learning to Fish.” The TCC Group ran this program for a consortium of foundations: The Ford Foundation, the John S. and James L. Knight Foundation, the McCormick Foundation and the Ethics & Excellence in Journalism Foundation.

Now comes my “stockbroker’s disclosure”: I helped to jump-start this program in 2003 when I was at the Ford Foundation. The economy was souring, and I saw one journalism group after another start to flounder. I realized that even the Ford Foundation couldn’t rescue every group hollering for a lifeline. It was the classic funder’s dilemma: Should we offer a fish or a fishing pole?

With the help of my colleague, John Bracken (now with Knight), we came up with the basic idea for the Challenge Fund. The TCC Group developed the details, and then the Knight Foundation quickly joined as a co-funder. McCormick and the Ethics & Excellence in Journalism Foundation entered the collaboration later.

Reading the final report nine years later, I believe, now more than ever, that funders should consider creating and supporting more programs like the Challenge Fund. During these still-tumultuous times, nonprofit journalism organizations are playing a critical role by helping to reinvent how news is produced, providing critical support and retraining to working professionals, and educating the next generation of leaders. Supporting groups like these is an investment in the future of journalism.

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