Chi-Town Daily News Aims to Profit

Posted on 11. Sep, 2009 by in Not-For-Profit

The Chi-Town Daily News, the not-for-profit out of Chicago that launched four years ago, announced today that it will become a for-profit venture. Editor Geoff Dougherty announced the move in a post on the site, which has received funding from the Knight Foundation and a host of other supporters.

Dougherty explains the move:

We’ve concluded that, as a nonprofit, we cannot raise the money we need to build a truly robust local news organization that provides comprehensive local coverage.

The Daily News needs $1 million to $2 million per year to do a great job of covering a city as sprawling and complex as Chicago. And despite hundreds of phone calls and letters to foundations, corporations and individual donors over the past four years, we’ve never come close to that.

Last year, we raised about $300,000. This year, due to the economic downturn, it was unclear whether we would be able to maintain that level of revenue, let alone move quickly to expand our coverage.

Jim Barnett, former Washington correspondent at The Oregonian who is now studying not-for-profit journalism models at George Washington University, thinks other news start-ups may follow the Chi-Town Daily News example and use not-for-profit status to prove an editorial concept before launching a for-profit venture.

“I do think more will follow this path, but not this quickly, and, I think, out of strength rather than necessity,” says Barnett, who blogs his research here and at the Nieman Journalism Lab. “I think other nonprofits with ambitious revenue goals will consider hybrid strategies — perhaps launching for-profit operations that help supplement their resources, much as Minnesota Public Radio did before spinning them off. But the strength of the nonprofit model would remain — that is, it puts the needs of the newsroom ahead of the investor.”

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2 Responses to “Chi-Town Daily News Aims to Profit”

  1. Damian Ghigliotty

    13. Sep, 2009

    Interesting. Sounds like further proof that readers aren’t willing to pay for their news.

    Reply to this comment
  2. David Boraks

    17. Sep, 2009

    I operate a local daily news website in North Carolina called DavidsonNews.net. People sometimes ask why I didn’t incorporate as a non-profit. Mainly, it’s because I see newsgathering as a primarily entrepreneurial activity.

    But I’ve also wondered what it would be like to divide my time between reporting and grant writing/begging. And what happens when the current boatload of money pouring out of foundations and into nonprofit news ventures runs out? This can’t go on forever.

    Maybe the Chi-Town Daily News decision is a natural evolution for nonprofit news. Perhaps once “new” news organizations are comfortably established, they can let the foundation money go and shift to a for-profit model. Maybe they’re offering a potential model for more shifts in this direction.

    Who knows? We’re all making this up as we go along.

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