In late 2018, Elizabeth Green of Chalkbeat and John Thornton of the Texas Tribune launched the American Journalism Project (AJP) with the goal of applying the principles of venture philanthropy to help outlets achieve journalism’s Holy Grail: a sustainable business model built on a revenue mix of earned income, public funding and philanthropy.

Less than two years later, its founders’ concerns look regrettably prescient, as the economic downturn caused by COVID-19 is pushing local news outlets to the brink of extinction. That means the grantmaker’s new CEO Sarabeth Berman’s task at hand is more relevant and urgent than ever, as she sets out to scale up AJP’s support for local reporting.

Berman recently described to me how she sees her new primary goal: “How do we turn this moment into what we look back on as a new era for local news, rather than its final moment?”

On May 1, AJP announced that Berman would be taking over for Thornton as the project’s day-to-day leader. Berman grew up in Boston and attended Barnard College. After graduating, she spent a year in Hong Kong as a Henry Luce Scholar, before landing in Beijing as a manager of BeijingDance/LDTX, a modern dance company. She went on to serve as the vice president of development and communications at Teach For China, where she focused on recruiting talent and building the organization’s fundraising operation.

“It was a historical moment in 2006,” she told me. “China was coming on to the international stage and the only way to make sense of it was through the eyes of the foreign press.” While in China, she met her future husband, who was the bureau chief for the Chicago Tribune. She also witnessed the slow erosion of the U.S. journalism industry. By 2008, many of her husband’s peers in the foreign press corps packed up and went home. She moved back to the states in 2013 and took a job in D.C. leading global public affairs at the educational nonprofit Teach for All, where she worked until taking her current role.

Envisioning a New Era for Local News

The AJP has raised $46 million from a who’s who of prominent journalism funders, including the Knight Foundation, Craig Newmark Philanthropies, Democracy Fund and the Facebook Journalism Project. Of this amount, Berman told me that $36 million is earmarked for the project’s first round of funding. AJP is looking to raise an additional $14 million to close out this first fund at $50 million. The remaining $10 million raised thus far is earmarked for round two.

Last December, the AJP announced its first round of grantmaking. The total payout stood at $8.5 million, with 11 nonprofit local civic news organizations receiving an average grant of $800,000 to grow their business, technology and fundraising capacity.

Two months later, John Thornton sat down with Vox’s Peter Kafka to discuss the future of local news. Thornton delivered a blunt analysis, arguing that local news organizations can’t survive as for-profit businesses because there’s no market-based solution for the kind of news that citizens need. “There is just no hope that civic news is going to win in an environment where the idea is, you pay as you go and you pay for what you read, rather than solving for what society needs as a whole,” he said, without even mentioning COVID-19, which had yet to upend the journalism sector.

Around the same time, Berman took the job with the AJP. She now reports to the AJP board, which includes “opinionated co-founders” Thornton and Green. Over the next 18 months, Berman and her team plan to focus on rapidly scaling up newsgathering and reporting in communities that will see their local newspapers close due to COVID-19. “When local newspapers close down, voter engagement drops, polarization increases, and corruption festers,” she told me.

Toward a Sustainable Model

Berman cited some encouraging signs before COVID-19 struck. For instance, one of the AJP’s grant recipients, the Puerto Rico-based Centro de Periodismo Investigativo, explored a multi-billion-dollar corruption network involving Governor Ricardo Rosselló-Nevares. The outlet enjoyed its largest surge in revenue thanks to its tireless reporting.

Another AJP grantee, the Chicago-based City Bureau, which netted a three-year, $1.18 million grant last December to boost revenue and operational capacity. “In the near term,” its leadership said in an open letter to the community last year, the funding “will allow us to invest in staff for communications, business development and philanthropic support.”

Then COVID-19 hit, forcing outlets to “shift their strategies to meet the needs of their communities,” Berman said. City Bureau rolled out a Chicago COVID-19 resource finder for the city’s residents, including information on applying for unemployment and accessing mental health services. The tool is available in 12 languages and is also accessible on a texting platform for users who lack reliable internet access.

City Bureau’s long-term objective of diversifying revenue sources remains in place. Berman said that “each outlet’s pie chart for revenue will look different,” while stressing the importance of revenue diversification so outlets aren’t reliant on a single benefactor. Components will include events, public funding, advertising and corporate sponsorships, memberships and subscriptions, and of course, philanthropy. Over time, AJP grantees should have diversified philanthropic revenues from foundations, major gifts and small donations.

Berman’s thoughts mirror those of the Knight Foundation’s Jennifer Preston, vice president for journalism, who told me that while “there is not a single model for sustainability, the strongest organizations include leaders who are completely focused on revenue, whether it’s from local philanthropists, national foundations, local events, sponsorships, advertising, memberships or subscriptions. The American Journalism Project is investing directly in that capacity.”

Broadening the Conversation

One of the tragic ironies of COVID-19 is that it has amplified local journalism’s critical role in educating communities while confirming Thornton’s argument that “the market” can’t sustain a for-profit outlet focused solely on “what society needs.” The advertising dollars that sustained local news organizations for 150 years “aren’t coming back,” Berman said. “This will require us to really reframe our understanding of the role of citizens in sustaining local news as a public good.”

Fortunately, we’re seeing examples of local communities stepping up to pull threatened outlets back from the brink. Steve Waldman, president and co-founder of Report for America, told me that “donors write in, saying how critical their local newsroom is to their understanding of COVID-19 and its impact on the community.” Waldman cited North Carolina’s News and Observer, which raised $25,000 in a week from readers, and a just-launched newsroom out of West Virginia that raised nearly $10,000.

Berman corroborates Walden’s findings, telling me outlets have seen an “increase in small-dollar gifts because readers feel their value so viscerally these days.” That being said, “it’s hard to know what the terrain will be like over the long term,” especially if readers’ appreciation of local news starts to wane when the crisis subsides and the economy plunges into a recession.

Berman believes that fundraisers, donors and organizations should use this moment as an opportunity to broaden the conversation around journalism’s vital role in society. “Every philanthropist should invest in local media,” she said. “If you care about the environment, you should give to the media. If you care about healthcare, education and local issues, you should give to the media. We need to show that trusted news is essential to every goal a philanthropist has.”

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