Partnerships are business deals, but they’re not always about cash

Good journalism is done by people, and people need to get paid. So let’s be a little indecorous and talk about money.

Nonprofit news organizations typically get about 60 percent of their budgets from foundation grants and another 15 to 20 percent from individual donations. The rest is earned from underwriting, sponsorships, ticketed events, training programs and content sales to other news media. It is indeed their charitable mission to educate the public through journalism, but many of these groups won’t be around long to carry out that mission if they give everything away. (That’s a familiar refrain for commercial news media, too.)

So it should come as no surprise that successful partnerships often involve the commercial newsroom paying the nonprofit.

“This is the same thing that newspapers have done for a long time,” said media industry analyst Ken Doctor. For instance, he said, the Associated Press costs a lot less “than having a fleet of international correspondents and national correspondents.”

How much money changes hands depends on the players and their circumstances.

The nonprofit Investigative Post had leverage in 2012 when it negotiated what has since grown into a key partnership with WGRZ-TV in Buffalo. More than one local TV station was interested in an exclusive arrangement, and WGRZ wasn’t the first to the table. “When I sat down, I made it very clear I won’t work for exposure,” said Jim Heaney, editor and executive director of Investigative Post. He knew he could meet their need for local investigative journalism, and he knew that journalism was an asset for the station’s business.

“My partner is predisposed toward paying. They see great value; their ratings go up. Who’s not going to pay for that?” he said.

The partnership remains the largest single source of revenue for Investigative Post, and the nonprofit has negotiated increases in its fee since the original contract was signed. Heaney wouldn’t disclose the current amount, saying only that it was between $50,000 and $100,000 a year. That would put it among the largest such arrangements identified in this research.

In Michigan, the annual budget for a partnership between Crain’s Detroit Business and the nonprofit Bridge Magazine is less than $100,000, according to Bridge publisher John Bebow. Most of that goes to the salary of a shared business reporter in the state capital, split evenly between the two organizations. Crain’s pays its half to Bridge Magazine each quarter. Bebow counts it as earned revenue in his annual budget and reports to funders.

Both are long-term, contractual relationships. Partnerships for a single story or a short-term project involve less money, of course — comparable to what a commercial publication would pay an experienced freelancer. I heard a wide range of figures in my interviews, from $100 to a few thousand dollars per story. Stories for a national market command higher rates. Newspapers typically pay the least or nothing at all, even for front-page stories.

Here the money acts as a down payment on the partnership. It shows the commercial newsroom is serious about working with the nonprofit, has an investment in its success and understands its financial needs. (The nonprofit is responsible for communicating all of this clearly, and when you’re talking money is a good time to do it.) And a financial arrangement commits the nonprofit to make good on its promises, especially if there’s no formal contract.

The Food & Environment Reporting Network, for example, is paid by its commercial partners, generally as much as they would pay a freelance reporter for a story. With more ambitious stories, commercial partners will split the cost of travel and other expenses. “It’s become a bigger and bigger revenue stream for us. They’re getting value,” Sam Fromartz, co-founder and editor-in-chief of the Food & Environment Reporting Network, said.

“So many nonprofits do give away their stories,” he said. “Having worked in this business for 30 years, I don’t really understand that.”

There are two common reasons nonprofits give away content. One is valid; the other should cause the nonprofit to do a gut-check.

If a partnership doesn’t include money, it may be a sign that the product offered by the nonprofit isn’t actually valuable to the partner. Some nonprofits do good journalism but don’t solve a problem faced by commercial news outlets. The commercial outlet will take the nonprofit’s stories if they’re free, but if there’s a price tag, they’ll just do without. In this case, it’s time to rethink whether the partnership is worthwhile.

For other nonprofits, however, the benefit of wide distribution outweighs the lost revenue. Several statewide nonprofit news organizations, including the Wisconsin Center for Investigative Journalism and the Maine Center for Public Interest Reporting, distribute their stories for free through local newspaper partnerships. They’ve decided statewide reach is more important than a few hundred dollars per story. That can be a smart strategy depending on the nonprofit’s goals and the case it makes to its funders.

Whether or not money is involved, commercial and nonprofit news partnerships always involve a swap of things of value. The two sides must identify and negotiate the mix of cash, services and resources that add up to a fair exchange.

What do nonprofits value?

Nonprofit news organizations have two goals: Educate the public through high-quality journalism and achieve financial sustainability over the long term.

A key metric is earned revenue. Many foundations that fund journalism require their grantees to have a business plan that includes a diversified revenue mix. They don’t want to be the sole funder of a project or program.

To foundations, earned revenue indicates financial health. It also means commercial media value the nonprofit’s work and they have an interest in the nonprofit’s long-term success.

So collecting even a small fee can be important for a nonprofit.

For example, Vice News pays The Marshall Project for each installment of “Life Inside,” a weekly series of first-person essays about the criminal justice system. Vice pays $2,000 a month, fact-checks the stories and often provides illustrations. With more experience in digital news (along with data to back up their decisions) a Vice editor often writes the headline used on both sites.

No money changed hands when the column first began; it was treated as an experiment. After the series gained traction, The Marshall Project asked Vice to start paying for it. People often wonder if a nonprofit can ask for money after giving something away; this shows it can be done.

Many nonprofits raise money through matching-gift challenges, in which a donor pledges a gift if the nonprofit can raise a certain amount on its own. Revenue from partnerships can help meet those goals.

But nonprofits are interested in more than cash.

In Virginia, nonprofit Charlottesville Tomorrow and newspaper The Daily Progress co-publish a guide to local general elections every other year. The guide began as a project of Charlottesville Tomorrow. Today, as part of a partnership agreement, the newspaper designs, prints and delivers it to the post office — all at its own expense.

Charlottesville Tomorrow saves on production costs, but the guide also provides publicity and fulfills an important part of the organization’s mission. In return, The Daily Progress can run any of the nonprofit’s articles. Often Charlottesville Tomorrow has the only coverage of city planning, transportation, and certain education issues.

Still other nonprofit newsrooms use partnerships to access the resources of a larger news outlet for an ambitious reporting project.

When Seattle-based nonprofit InvestigateWest worked with The New York Times in 2013 on a story about an antipoverty program in Alaska, the Times supplied the art. The newspaper flew a photographer to the remote west coast of Alaska; the photos ran in the paper and on the InvestigateWest website. The Times not only filled a gap in InvestigateWest’s journalism (the nonprofit didn’t have a staff photographer) but also paid the substantial cost of travel.

The Marshall Project’s collaboration with the Times on a story about prisoner transport in 2016 had the same arrangement. At the local level, The Colorado Independent, a nonprofit, has relied on the staff photographer from the for-profit Denverite to illustrate some stories published on both sites.

Finally, small, nonprofit newsrooms value access to a larger group of editors and reporters at commercial partners.

Bebow of Bridge Magazine said Crain’s has the best business journalists in Michigan, expert at editing and developing story ideas. Bridge also excels in that area, having won Michigan’s Newspaper of the Year in its category two years in a row, but it doesn’t have much bandwidth.

Their partnership allows Bebow to tap Crain’s leaders for their management acumen. “I’ll talk with Crain’s: How do you manage this situation in your newsroom?” he said. For a small nonprofit especially — Bridge has nine employees and Crain’s has three times that — that’s an often overlooked benefit to a partnership.

What do commercial outlets value?

Commercial newsrooms are in the sales business, making money by selling to subscribers and advertisers. Partnerships with nonprofits are one way to increase the quality of their product while reducing or keeping flat the costs of reporting and production.

“Newspapers are still profitable despite having lost 60 percent of revenue. They’ve done it by cutting back,” said media industry analyst Ken Doctor. “That profitability is supported in part by this developing network of nonprofit providers of low-cost or no-cost content.”

It’s certainly one way to deal with tight budgets.

“In our case, we provide a product for a fraction of the cost than if they had done it in-house,” said Steve Myers of The Lens, a nonprofit newsroom in New Orleans.[ref Editor’s note: Steve Myers helped edit and direct the production of this study for API.] Partnerships at The Lens have included local television and newspapers as well as The Nation and Weather.com.

Commercial outlets want to know they’ll get stories in a format that works for their platforms, ideally accompanied by supporting photographs and graphics. They want to know the nonprofit will deliver what it promises, on time. This is especially true of commercial outlets with a daily production cycle, whether it’s print, digital or broadcast. A good nonprofit partner understands and supports the “daily manufacturing process,” Doctor said.

In October 2016, the San Diego nonprofit inewsource announced a partnership with CBS 8 and immediately changed its editorial workflow to deliver broadcast-ready content. “We can’t give them anything that doesn’t have video,” said Brad Racino, who oversees partnerships and innovation for inewsource.

It’s not enough to do good journalism. Often overlooked, logistics can cause partnerships to fail when either side comes up short.

The hardest partnerships at InvestigateWest were when one of the two sides didn’t make it easy for the other to work with them. Like many nonprofit newsrooms, InvestigateWest has employed a rotating cast of part-time reporters, interns and full-timers who share editorial and fundraising responsibilities. That’s hard on partners, who want to know whom they will be working with. Meanwhile, InvestigateWest ran into trouble when a partner didn’t communicate how decisions were to be made. Uncertainty — whether a steady stream of new faces or a new voice late in the process — makes it hard to work together.

Finally, while commercial newsrooms have different needs than nonprofits, they too value high-quality journalism. Every journalist I spoke with at commercial newsrooms praised the quality of the work produced by their nonprofit partners.

When The Marshall Project and the Houston Chronicle began work on “Next to Die,” the death penalty project, the nonprofit’s reputation was a selling point. Capital punishment and the appeals process can be hard to get right, even for experts.

“We already knew The Marshall Project would be a reliable, ethical partner. We weren’t going to have to worry about fact-checking,” the Chronicle’s Lise Olsen said. “We knew this was a partner that would uphold our own standards.”

In Washington, The News Tribune and The Olympian were covering state government less than they used to, especially environmental and healthcare matters. (The sister papers, owned by McClatchy, share many resources.) The health care beat had fallen by the wayside during cuts and had never been reassigned.

“We knew that there were some holes in our game,” said Kim Bradford, then the state and local news editor at The News Tribune.

By traditional digital metrics like engagement and pageviews, their state government reporting didn’t do that well. But Bradford believed in the value of covering the legislative process, and she wanted to find a way to keep producing it. She found her answer in a partnership with InvestigateWest.

“There’s some stuff you do because it’s accountability; it’s possibly going to lead to change,” she said. “You can measure worth that way too.”

Throughout the 2016 state legislative session, the two newspapers shared their reporting plans. Each week, they published stories by InvestigateWest reporters. The partnership, which provided revenue to InvestigateWest, improved the newspapers’ statehouse coverage through big-picture enterprise stories, analyses and deep reporting.

“For the best editors and the best publishers,” Doctor said, “they value the journalism that they’re able to offer their readers that they’re otherwise unable to pay for.”