A Sector Under Stress Offers Lessons about How to Lead, Evolve and Become More Financially Sustainable

NEW YORK, June 7, 2012 /PRNewswire-USNewswire/ -- With their industry facing upheaval and suffering fallout from the recession, nonprofit media organizations have found a need to adapt more quickly than ever before. An innovative funder collaborative has helped address this challenge through a combination of matching grants, coaching and other resources. The initiative holds lessons not just for media organizations but other nonprofits that seek to strengthen their financial footing and remain nimble in the face of change. 

A new report details results of the Challenge Fund for Journalism (CFJ), which was formed in 2004 and included the Ford, Knight, McCormick, and Ethics and Excellence in Journalism Foundations. The grantmakers came together to pool their funding and collaborated with management consulting firm TCC Group to guide the initiative. Ultimately, CFJ benefited 53 media organizations that support journalists, produce content, or advance industry practices. Like the people and communities they serve, these groups are widely diverse. They range from the Columbia Journalism Review to the Cartoonists Rights Network International, the Association of Women in Sports Media, and the Center for Investigative Reporting.

CFJ provided multiple tiers of support that extended far beyond traditional funding. It required, for instance, that organizations "match" grants by generating additional revenue equaling up to two times the grant amount. This spurred grantees to seek out new donors, enhance board engagement, and become more innovative in their fundraising. All told, the groups succeeded in leveraging $3.6 million in grants into a collective $9.5 million in matches.

At the same time, CFJ recognized that financial sustainability hinges on how well an organization is run. TCC Group provided coaching, peer convenings, and other resources to help the organizations become more effective. Eighty-five percent of grantees reported that they experienced positive organizational change as a result of the initiative. They cited improvements in such areas as strategic planning, fundraising strategies, and plan implementation.

"This initiative took place during an especially tumultuous period," observed Calvin Sims, Program Officer for News Media and Journalism at the Ford Foundation. "There was drastic upheaval of the media industry, coupled with the economic downturn. Both caused contributed and earned income for these organizations to dry up." CFJ, he added, provided more than funding.  "It focused on the knowledge and tools to revamp business models, tap new sources of support, and become more resilient."

Indeed, it was the combination of matching grants and coaching that unlocked new possibilities. The match requirement created a sense of urgency that helped open doors with new and existing donors. Meanwhile, organizations became more effective at everything from planning to fundraising. Through coaching and peer convenings led by TCC Group, leaders learned best practices, developing systems to maintain improvements even after the "challenge" grant ended.

"The greatest value of the initiative was that it enabled us to try out new strategies for growth, which ultimately helped change our business model," said Andy Hall, Executive Director of the Wisconsin Center for Investigative Journalism. For example, the Center added new board members and expanded its corporate sponsorships. It also increased its earned income and introduced new fundraising events.

"The coaching helped to troubleshoot when certain activities slowed or stalled," said the Center's Board President, Brant Houston. "It provided new ideas that the board and staff had not thought of."

CFJ encouraged organizations to balance fundraising with deeper questions about how to navigate the future. As a result, they created strategic plans and articulated compelling visions and case statements. They became better at recruiting and engaging board members. Finally, they enhanced their fundraising capacity. In a number of cases, groups became less reliant on foundation support.  "By far, the largest amount of philanthropic money given away each year in the United States is donated not by foundations but by individuals," pointed out Eric Newton, Knight Foundation senior adviser. "This initiative helped nonprofit journalism groups learn to fish where the fish are."

Efforts also built on each other. For example, in considering potential revenue streams, some grantees found ways to enhance their programming. Other improvements included upgrades to donor databases and websites, as well as social media campaigns. Board members and key staff received training in fundraising and "making the ask."

In addition to the impact created for grantees, the initiative offered insights into what enables organizations to adapt. The grantees that achieved the most positive outcomes had in common at least one leader who embraced change. This leader championed the need to overhaul the business model and had a bold vision for the organization's future. Just as critical, he or she was able to inspire and mobilize teams of supporters. 

The evaluation of CFJ also found that the more an organization changed during the initiative, the more likely it was to sustain those improvements over time. Over 80% of grantees report that they have maintained gains in organizational effectiveness, and 90% stated that they continue to diversify their revenues.

Results also point to ongoing challenges. A number of participating organizations continue to struggle, with some unable to generate the same level of individual donations after the initiative. They cite fundraising fatigue as a major factor, along with the lack of a matching incentive and turnover among their leadership.

But others show how journalism, as it contended with extreme stress, became a kind of laboratory for the resourcefulness needed by all nonprofits. "The initiative demonstrated that healthy organizations have to be willing to revisit and overhaul their business models," said Clark Bell, Journalism Program Director of the McCormick Foundation. Bob Ross, President and CEO of the Ethics and Excellence in Journalism Foundation, added, "Together, these groups bring diverse voices and perspectives into the media space. Their adaptability is critical to maintaining a vibrant journalism sector."

REPORT:  http://www.tccgrp.com/pdfs/LearningtoFish.pdf

About TCC Group
Since 1980, TCC Group has developed strategies and programs that enhance the efficiency and effectiveness of foundations, nonprofits, corporate community involvement programs, and government agencies. From offices in New York City, Philadelphia, and San Francisco, we work with diverse clients – from large funders and nonprofits to smaller organizations that want to tap our knowledge to determine pragmatic ways to solve everyday problems. Visit www.tccgrp.com.

About the McCormick Foundation
The Robert R. McCormick Foundation is committed to fostering communities of educated, informed and engaged citizens. Through philanthropic programs, Cantigny Park, and museums, the Foundation helps develop citizen leaders and works to make life better in our communities. The Foundation was established as a charitable trust in 1955, upon the death of Colonel Robert R. McCormick, the longtime editor and publisher of the Chicago Tribune.  The McCormick Foundation continues McCormick's legacy by partnering with media outlets, such as the Chicago Tribune and philanthropic organizations across the country, to encourage local giving, inspire civic involvement, and address human needs. Visit www.McCormickFoundation.org.

About the Ford Foundation
The Ford Foundation is an independent, nonprofit grant-making organization. For 75 years it has worked with courageous people on the frontlines of social change worldwide, guided by its mission to strengthen democratic values, reduce poverty and injustice, promote international cooperation, and advance human achievement. With headquarters in New York, the foundation has offices in Latin America, Africa, the Middle East, and Asia. Visit www.fordfoundation.org.

About the John S. and James L. Knight Foundation
The John S. and James L. Knight Foundation advances journalism in the digital age and invests in the vitality of communities where the Knight brothers owned newspapers. Since 1950, the Foundation has granted more than $400 million to advance quality journalism and freedom of expression. Knight Foundation focuses on projects that promote community engagement and lead to transformational change. Visit www.knightfoundation.org.

About the Ethics and Excellence in Journalism Foundation
Founded by Edith Kinney Gaylord, Ethics and Excellence in Journalism Foundation's mission is to invest in the future of journalism by building the ethics, skills, and opportunities needed to advance principled, probing news and information. Visit www.journalismfoundation.org.

SOURCE McCormick Foundation