A New Way of Doing the News

The decision to become a nonprofit news and information organization was an easy one.

Faced with creating a new news operation from scratch in a city with legacy media dating back at least 130 years, Stocktonia News Service trustees chose early on to adopt a not-for-profit business and journalism model. This approach provides a new way of delivering news content to Stockton’s residents.

SNS joins a growing number of nonprofit news and information organizations throughout the United States. They provide needed local, fact-based, public journalism while also tapping into new revenue streams available to designated charitable organizations.

“Ultimately, the people who will benefit is the Stockton public,” said Phillip Merlo, Stocktonia’s founder, and current trustee. “We have a very intentional ambition for the organization’s model, and we felt that the nonprofit vehicle was the right vehicle to do that.”

In the meantime, philanthropic grant-makers, such as the John S. and James L. Knight Foundation and the Annenberg Foundation, have now begun offering nonprofit news operations money that, until recently, had been traditionally unavailable to journalistic entities. Over the past five years, they have funded several nonprofit news organizations for their intrinsic community impact – in the same manner as hospitals, museums, or libraries.

“They now see journalism as a public good,” said Sherene Azimi, communications director at the Institute for Nonprofit News.

Numerous Financing Options

In addition, nonprofit news organizations are reaching local donors through direct and internet-based means.

Annual campaigns, Kickstarter drives, and sponsorship requests have all become commonplace for the approximate 360 news organizations in the U.S. and Canada that have gone nonprofit. These fundraising mechanisms often support or supplant traditional revenue generators that for-profit news agencies have long used. These include classified advertising, display advertising, and subscriptions.

Yet, with these financing options, SNS will deliver all its news content free of charge.

The nonprofit model includes some added benefits for the donating and reading public.  For example, individual donors can claim tax deductions for supporting not-for-profit news services. Nonprofit financials are public, and many organizations post all donations above a certain limit on their websites.

Additionally, registered 501 c3 corporations are unable to endorse political candidates or causes.

“We wanted to stay independent of local political factions,” Merlo said.

According to the Institute for Nonprofit News, 195 not-for-profit news and information organizations opened between the Great Recession of 2009 and the COVID-19 pandemic of 2020. Another 100-plus began operations since the pandemic began.

Whether the increase is pandemic-related or simply a byproduct, no one is sure. Yet, this uptick in nonprofit news and information start-ups is in sharp contrast to the number of for-profit news services that have closed or seriously curtailed their coverage during the same period.

According to the Poynter Institute, more than 100 traditional newsrooms closed since March 2020.

“Fact-based news that allows people to make their own decisions is becoming a movement,” Azimi said.

Experienced Newsroom Personnel is Key

Oftentimes, former journalists who worked in for-profit newsrooms have begun nonprofit news and information organizations. They continue to see the need for local journalism and want to provide it.

This is especially true in communities where corporate chains or hedge funds have purchased traditional news sources and laid off staff. They see important stories go unreported or underreported and want to change that.

But it also is true that communities like Stockton need independent journalism sources that serve their communities in a new, hopefully better, way.

“There may be no such thing as purely objective journalism. But all good journalism is fair,” Merlo said. “That’s the guiding ethos behind what we expect Stocktonia to become.”

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