The American Journalism Project is Poised to Allocate Millions. Where Will the Money Go?

Last year, Elizabeth Green of Chalkbeat and John Thornton of the Texas Tribune launched the American Journalism Project (AJP) with the goal raising and investing $1 billion in “mission-driven local news outlets.” The project was seeded with funding from the Democracy Fund and John and Erin Thornon.

It’s an audacious goal that runs against some pretty fierce headwinds, including the expansion of “news deserts” and local outlets’ Sisyphean task of implementing sustainable business models. Also, as we pointed out when AJP launched, successful efforts to aggregate large-scale philanthropic capital for an issue—say, like Blue Meridian Partners or Co-Impact—have typically been backstopped by at least a few billionaire donors, which this venture lacked. Green readily acknowledged the challenges facing AJP. “There’s no guarantee we’ll succeed, crazy to think every news organization we support will meet its goals, and easy to think of reasons we might fail,” she said. “But I’m much more comfortable taking the risk than not.”

As it turns out, local news’ prospects have brightened considerably since AJP went live. In January, Facebook made a $300 million commitment to support local news. A month later, the Knight Foundation said it would double its investment in strengthening local journalism to $300 million over five years.

Knight’s announcement included $20 million over five years to AJP. Around the same time, AJP announced it raised a total of $42 million in six months. At least $10 million of Knight’s contribution will be dedicated to the initial fund, which is targeted at $50 million to support up to 35 local news organizations. Additional support came from Arnold Ventures, Emerson Collective, Craig Newmark Philanthropies, the Facebook Journalism Project, and philanthropist Christopher Buck.

The AJP will roll out its first round of grants this summer. What are Thornton and Green looking for in “civic news organizations?” What are the critical inputs to “help catalyze a new generation of public service media?” Thornton’s chat with the Poynter Institute’s Rick Edmonds and Green’s interview with Media Impact Funders’ Nina Sachdev provide some helpful clues.

Applying the Principles of Venture Philanthropy

The AJP is built on the idea that that market forces are failing local news and the most effective course of action is employing the principles of “venture philanthropy.”

“On and off over the last decade, I have been obsessing to a lesser and greater degree to how you make capital formation happen to make public journalism happen,” Thornton told NeimanLab last year. An experienced venture capitalist himself, he applied its principles at the Texas Tribune, and he and Green clearly believe there’s an opening for scaling this strategy across the country. Thornton’s vision for the AJP aligns with this conceptual framework.

Thornton told Poynter’s Edmonds that funded “civic news organizations” will include a few startups and recipients that have gone live but remain “nascent” as sustainable ventures. And while the AJP aims eventually to generate “mission driven reporting” on state and local governance, initial grants will focus on “revenue raising and tech capacity.” Thornton and Green want the AJP to act as a “catalyst” to help organizations develop diverse and repeatable sources of revenue, such as second-wave philanthropic grants, memberships, events and premium paid information services.

Thornton estimates that this round of “catalyzing investments” will take two to three years. “For $1 in the first year, (we expect) a return of 50 cents; for year two, you expect to get $1 back; somewhere between two and five years, each dollar should get double that rate of return,” he said. In addition, Green said she and Thornton want to see outlets “grow their impact and coverage footprint. We want each organization to have a solid plan in place for revenue diversification and sustainable expansion of coverage.”

With more funders betting big on local news, we’re beginning to see how their strategies overlap and diverge. Facebook’s investment is highly operational in nature. Its two key areas, according to Campbell Brown, VP, Global News Partnerships, are supporting journalists and newsrooms with their “newsgathering needs” and helping organizations “build sustainable business models.”

Knight, meanwhile, is a bit more big-picture in its scope. It believes that a vibrant local news ecosystem is the best option available to “reverse years of declining trust” and “make democracy work,” according to Jennifer Preston, Knight Foundation vice president for journalism.

Nor should we discount Google’s tech-focused work in this space. Its $300 million Google News Initiative launched last March with the goal of “helping journalism thrive in the digital age.” Five months later, it announced a round of funding aimed at helping outlets optimize the YouTube platform and boosting “news literacy” among consumers.

Casting a Wide Net

What else is the AJP looking for in aspiring recipients? First, according to Thornton, a mission that is “entirely driven by public purpose.” Second, “journalistic credibility.” And third, sites that have published quality work and “have at least one business-side person already onboard.”

Green expressed an interest in “diverse and inclusive leadership, highly invested community support (of all forms, not just major philanthropy), governance structures that are democratic and diverse, and a total commitment to editorial independence and transparency.”

When Poytner’s Edmonds brought up the idea that some outlets are thriving while others are legitimately struggling, Thornton said, “I expect that we will receive some criticism, but we are not going to be making judgments about the neediest places.” Similarly, Green told Impact Media Funders’ Sachdev, “Unfortunately, in the search for local news deserts, there aren’t many communities that will be ruled out. Even New York City, our fair media capital, suffers from the local news crisis.”

Green has a point. Major U.S. metropolitan areas contain a multitude of distinct and diverse sub-ecosystems. Many of these areas lack a vibrant and representative local news outlet. “The saddest part to me,” Green said, “is that some communities have lacked meaningful coverage for years, especially from established media, which have historically failed to report on or take seriously people who live in poverty, people of color, and other marginalized groups.”

“Need” is Relative

Last year, researchers at the Shorenstein Center on Media, Politics, and Public Policy at Northeastern University assessed 32,422 grants distributed by foundations supporting journalism and media-related activities between 2010 and 2015. Total payout stood at $1.8 billion. Most of the funding flowed to “high-profile and well-connected nonprofits in coastal cities,” a phenomenon the authors described as “elites supporting elites.”

Similarly, a January piece by Monash University’s Bill Birnbauer in The Conversation noted that the vast majority of the $469.5 million that 60 digital nonprofit news media websites raised between 2009 and 2015 supported the 20 biggest outlets, while the 20 smallest squeaked by on just $8.6 million. McNelly Torres, a co-founder of the small Florida Center for Investigative Reporting, told Birnbauer she rated her chances of receiving a big grant from a national foundation as “one to a million. The big guys are always on top… so the little guys always struggle.”

If smaller organizations can’t secure sufficient support from foundations and wealthy philanthropists, Birnhauer writes, “nonprofit journalism will not reach its potential, no matter how valuable its coverage, nor will it abate the spread of ‘news deserts’ across the United States.”

It will be interesting to see where the AJP ends up allocating its millions. Based on the clues provided by Thornton and Green, we can expect the AJP to focus on organizations’ potential for growth and sustainability rather than its geographic location. The project won’t be giving grants to organizations in, say, a rural Midwest news desert simply because it’s located in a rural Midwest news desert. And given the project’s adherence to the principles of “venture philanthropy,” it’s safe to assume stakeholders will show a preference for smaller, less renowned organizations rather than the usual affluent and established suspects.

We’ll find out soon enough.

In the meanwhile, we’ll let Green have the last word. When asked what advice would she give to funders that are supporting journalism or might be interested in funding it in the future, Green said, "Invest in institution-building. We need to set benchmarks against much bigger long-term goals, and the way to get there is to support the development of leaders and organizations that are modestly sized today but can play a much larger role tomorrow.”