Why Nonprofit News Sites Need to Adopt a Subscription Business Model

The Pew Research Center’s recent report on Nonprofit Journalism details the pervasive lack of business models in this sector, despite the growing adoption on

The Pew Research Center’s recent report on Nonprofit Journalism details the pervasive lack of business models in this sector, despite the growing adoption on nonprofit news models by many news sites and start-ups. Yet, the adoption of a subscription or membership model to establish recurring revenues is glaringly lacking in their recommendations.To be clear, a nonprofit is mainly defined by what it does with its revenues, i.e., they must be invested back in the organization, not distributed to shareholders or investors. That does not preclude nonprofits from having a sound business model that allows for financial sustainability.Yet the Pew study found that 54% of the 93 nonprofit news organizations they surveyed  identified business, marketing and fundraising as the area of greatest staffing need. However, this problem is exacerbated by the fact that many donors and nonprofit rating systems determine a nonprofit’s effectiveness by how much the organization invests in programs (in the case of nonprofit news, that would be editorial activities), versus administrative costs.But by not focusing on administrative needs (i.e., business development and capacity building on the sales and marketing side), nonprofits are hamstrung to develop sustainable growth and financial independence. (Anyone interested in the economic injustice of nonprofit models should really check out Dan Palotta’s TED talk. Really, click on that link. It’s 18 minutes that will change how you look at money, charity, and what it takes to “do good.”)But curiously, while Pew recommends that nonprofit news organizations should diversity their revenue streams, it does not mention the incredible power of subscription (or membership) business models to do so. Instead, Pew limits the definition of “earned revenue” as training programs, sponsoring events, and advertising.However, given that most nonprofit news sites have experience in fundraising and donations, they could easily establish membership models that working on a recurring revenue basis. The membership model should take a freemium approach, much like LinkedIn, where anyone can become a member for free, but must pay for enhanced features. In addition, with the rise of tablet subscriptions, nonprofit news organizations can satisfy both funders and their bottom line by distributing their news freely online but requiring payment for the convenience of tablet reading.But most of all, nonprofit news sites need to abandon their destructive thinking that “information should be free” (click on that link for the full quote in context) or that doing good means a pay cut. On the contrary, if we paid people to do good work, more people would flock to industries that serve the public interest, like journalism, fostering competition for the most effective forms of “good” works.So my advice for nonprofit news sites is don’t be afraid to ask for money from your readers and audience. They know you’ve earned it.

Up Next

Register Now For Email Subscription News Updates!

Search this site

You May Be Interested in: