Last week Honolulu Civil Beat, a news outlet focused on public affairs reporting, turned six years old. To celebrate, the digital news site announced big changes to its structure: it is becoming a nonprofit, it removed its paywall, and it has adopted a membership model. It has also joined the Institute for Nonprofit News (INN). Until the IRS approves Civil Beat’s nonprofit status, INN is serving as its fiscal sponsor so any new contributions to Civil Beat are tax deductible.

“We want our impact to continue – and to grow. That means we need to expand our reach, so that more people in Hawaii can have access to the information they need to make good, informed choices on public policy and social issues,” said Patti Epler, Civil Beat editor and general manager, in the announcement. “Becoming a nonprofit underscores our mission to educate and engage the community on important issues. We’ve always followed a mission strategy, as opposed to the retail strategy used by most other news operations in Hawaii. We’ve never sold advertising.”

The award-winning news site was created in 2010 by philanthropist and billionaire eBay founder Pierre Omidyar, Civil Beat’s CEO and publisher, to be a non-commercial media platform whose mission is to inform and educate Hawaiians on vital issues.

Memberships begin at $60. At that initial level, members will receive Civil Beat’s monthly member newsletter and a bumper sticker. At the highest level – donations of $1,000 or more – members receive all of the benefits, including the newsletter, bumper sticker, member coffee events with staff, advanced notice and reserved seating at monthly events, a Civil Beat tote bag, discounts to special events and invitations to special VIP donor experiences and events.

“But the strength of any nonprofit organization flows from the broad support of the community. We hope that more donors like you will embrace our mission – not because you have to in order to read our stories, but because you want to help us. So please join with us as a financial partner – small, medium or large – to help us evolve and grow well in the future,” the announcement said.

To promote the new changes, Civil Beat will launch its first large-scale marketing campaign to include “fun and provocative ads” on television, in magazines and “in more unexpected public places.”

As Civil Beat points out, nonprofit news outlets have more flexibility in serving their communities than for-profit operations. Sue Cross, executive director of INN, said people are more willing to experiment with business models and to support original, public-service journalism like Civil Beat provides.

“It is experimental and iterative. No one knows what mix is going to work,” said Cross.

Doubtful about the benefits of Civil Beat’s new business model, Ruth McCambridge of Nonprofit Quarterly wrote commentary about the move:

“When it comes to the question of news sites being for-profit or nonprofit, we don’t think that one’s necessarily better than the other save that one is subject to the whim and greed of shareholders and the other is not. If you take on the spirit of nonprofithood and collective action on collective concerns, that makes a difference, but there is little imposed difference in your business model,” wrote McCambridge.

“Nothing about being nonprofit is a magic bullet; you still have to find your value proposition and convince people by the quality and resonance of your work that they want you around on a regular enough basis that they are willing to invest to make that happen. Philanthropic money can help organizations get over that hump over time,” she said.

Insider Take:

As the print and digital news landscapes continue to evolve, media outlets like Civil Beat regularly change and tweak their business models to find the perfect balance between revenue and content. While Civil Beat is making a significant shift in its model, it is maintaining its original mission which is to serve the public through quality explanatory and investigative journalism. That won’t change. How Civil Beat makes money, however, will.

The key difference between Civil Beat and other nonprofit news outlets, however, is that Civil Beat has the financial support of billionaire Omidyar. Having that financial backing gives Civil Beat a lot more flexibility to experiment with innovative business models. Regardless, we are eager to see how this shift in philosophy changes Civil Beat’s readership and to see if it can serve as an example to other news outlets looking for that elusive magic formula.