One of the more interesting business models for local news that Ellen Clegg and I have encountered in our work is what you might call the hybrid for-profit/nonprofit. For-profit organizations such as The Mendocino Voice in Northern California, The Colorado Sun, the Storm Lake Times Pilot in Iowa and The Provincetown Independent have either set up nonprofit arms or are working with existing nonprofits to raise tax-exempt money that can be used to support certain types of public interest journalism.
This past Monday, Fredric Rutberg explained how that model is working at The Berkshire Eagle, the Pittsfield, Massachusetts-based paper that he and several other business leaders rescued from the hedge fund Alden Global Capital back in 2016. A retired judge, Rutberg is now publisher and president of the Eagle. He spoke at the spring conference of the NorthEast Association of Communication Executives, held in Meredith, New Hampshire.
After Rutberg and his partners acquired the Eagle, he said, they considered — and rejected — the nonprofit model. Among other things, they wanted to maintain the paper’s editorial voice, and nonprofits aren’t allowed to endorse political candidates or specific pieces of legislation.
“Our editorial page is very important to us,” he said. “We were very proud to be among the first five or six papers in the country nationally to endorse Hillary Clinton over Donald Trump.” And though he conceded the impact of that endorsement was “marginal,” the paper’s editorial voice really matters when it comes to candidates for local office. “We think we have something to say,” he said. “We don’t want to give that up.”
But with advertising on the wane, the paper faced a dilemma — especially when the COVID-19 pandemic hit, wiping out the Eagle’s nascent events business. Just before COVID, the paper raised four times the $10,000 it asked for in order to hire a Report for America corps member to cover the Statehouse. With that in mind as “proof of concept,” the Eagle set about looking for a more comprehensive way of seeking donations to bolster its news coverage.
What it hit upon was the Berkshire Eagle Local Journalism Fund, in partnership with the Berkshire Taconic Community Foundation. The nonprofit foundation, Rutberg explained, accepts donations to help the Eagle pay for coverage of education, health, economic development, and arts and culture. The Eagle held back from a public campaign during COVID, with Rutberg saying he thought that would be “impolitic” given that the pandemic had forced the paper to cut back the number of days it appears in print (from seven to five).
Last November, though, the Eagle launched its first public drive, raising nearly $80,000 from the community as well as a major gift of $150,000. The Eagle is planning a second public drive this October and has established an endowment fund, as well, although Rutberg said that’s gotten off to a slow start.
Following several cutbacks during COVID, the Eagle is expanding, Rutberg said. Though print circulation continues to shrink, paid digital circulation has risen from 2,700 pre-COVID to about 7,200 today. An arts reporter was hired recently, and the Eagle has started a quarterly magazine — The B.
Some of the largest for-profit papers in the country, including The New York Times and The Boston Globe, accept grant money to cover certain beats or publish journalism produced by nonprofits like ProPublica. The Philadelphia Inquirer, a for-profit, is owned by a nonprofit, the Lenfest Institute, which helps pay for coverage at the Inquirer and other news outlets.
What makes smaller for-profits like the Eagle unique is that they’re making use of nonprofit money to help pay for their journalism on an ongoing basis and not just for a few narrowly defined beats. After all, the four areas Rutberg identified comprise a substantial part of his paper’s coverage.
Nonprofit journalism has emerged as a leading solution to the local news crisis. But it’s important for there to be a viable for-profit alternative as well — even if they are bolstered in part by nonprofit funding.
