What happens when you give independent news publishers direct funding to help them build more sustainable businesses?
At LION, we awarded $1.8 million in operational funding to news publishers last year through programs like the LION-Meta Revenue Growth Fellowship, the LION-GNI Sustainability Audits & Funding program and the 2022 GNI Startups Labs, and we can say at least two things with confidence:
- Money is good. We’ve seen how far that money can go in the hands of small, scrappy news businesses. Our program participants used their grants to launch new products and revenue streams, hire contractors, upgrade their websites, and make other critical investments in their businesses.
- Money is not enough. The publishers starting or leading LION member businesses are more likely to have a background in journalism than in business, yet many of the challenges they face are primarily small business challenges. For example, only 28 percent of the participants in our LION-GNI Sustainability Audits and Funding program had a strategic plan in place when they started the program, and less than half had an annual budgeting process.
To balance these distinct needs, LION provided direct funding to 160 publishers across our programs while also delivering personalized coaching and training to help them learn the skills and implement the systems that would make their investments stick.
Here’s what we heard from participants in our GNI Startups Lab program on Managing Money and Risk about the value of the program, beyond the dollars themselves:
- “I’m not a numbers person, I’m a words and story person, so getting a handle on and control over the financial part of my business was really intimidating to me. That’s what this Startups Lab helped me uncover and overcome.” —Shauna Ray, Radar Media
- “When I started my news organization, a plan was the furthest thing from my mind. The Lab helped me legitimize what has become a full-fledged news business. My work with my coach and the GNI/LION team forced me to set aside time to look at the most important aspects of my news organization–time I wouldn’t have spent otherwise. Now, I have a revenue and risk management plan, and I feel confident going into next year and beyond.” —Nicci Kadilak, Burlington Buzz
- “The Managing Money and Risk Lab is a program I have been waiting for! It gave me more confidence in our numbers and reignited my passion in the running of my news/media venture. The coaches, education and LION community are supportive and top-notch.” —Michelle Olvera, BoldLatina
Another insight from our 2022 programs is that publishers often make progress toward sustainability in small, incremental steps, with plenty of false starts and missteps along the way.
As my colleague Lisa Heyamoto wrote in her Nieman Lab prediction: “It’s tempting to think that the growth path for an independent news organization is consistent and linear. But after analyzing nearly 150 organizations over the last two years through LION Publishers’ Sustainability Audit process, we’ve seen this kind of “if/then” thinking doesn’t apply to the relative Wild West that is the independent news landscape.”
The goal of our programming in 2022 was to help our members navigate this “Wild West” landscape and make strategic investments to put their businesses on more sustainable footing.
Here are a few examples of what that journey looked like for participants in our LION-Meta Revenue Growth Fellowship.
A solo founder finally gets to make their first hire
Nuestro Estado founder Fernando Soto launched his Spanish-language publication in South Carolina like many LION members – as a solo founder trying to do everything at once.
He built the brand, reported the news, edited stories from freelancers, and posted on social, and when he could find the time, pitched to advertisers. But it was too much for one person.
“I was overwhelmed,” he said. “I thought ‘if only I could hire somebody, things would be different.’”
The Revenue Growth Fellowship gave Soto that opportunity. The program helped Nuestro Estado and eleven other independent publishers cover the cost of a revenue-focused hire for two years, and Soto used that funding to hire a business development manager.
The hope was that adding a business lead would help Nuestro Estado pitch more sponsors and close more deals, while also freeing up Soto to spend more time on editorial work.
But that plan didn’t pan out. Despite the extra staffing, business leads never took off, and prospective sponsors that did enter the pipeline often wanted to deal with Soto directly, causing him to be stretched just as thin as before the hire.
“Telling our story just hits differently coming from me as the founder,” Soto said. “My ‘aha moment’ was realizing that maybe I should take on that business work myself, even though it’s outside my comfort zone.”
After hiring and parting ways with two business development managers in 10 months, Soto has realized that the path to a sustainable workload isn’t just adding more capacity; it’s adding the right capacity – in this case, someone to help manage the editorial product so that he can focus on revenue.
A big investment in reader revenue pays off with a holistic approach
RANGE Media used its fellowship funding to hire an audience and membership editor in May 2022 – and when it launched its first membership drive a few months later, the early returns were modest.
“In all, we were shooting for 50 members,” RANGE founder Luke Baumgarten. “We only had nine new members after five days.”
What happened next is why LION talks so much about these three pillars of news business sustainability – and how they intersect.
That enterprising journalism combined with the work RANGE had already done to market its membership program and strengthen its conversion funnel led to big results. By the end of the campaign, RANGE had added 80 new members, beating its goal by more than 50 percent.
“The stories were the seeds, the marketing was the plough,” Baumgarten said. “Without both, nothing is going to grow.”
Ultimately, figuring out the right combination of investments to produce results is as much a strategic problem as it is a resources problem, and we heard from RGF participants that the personalized coaching they received helped them navigate these big decisions.
“It’s really good to have someone who’s done this work before and can help identify what RANGE is uniquely good at, and what we’re uniquely well positioned for,” Baumgarten said. “That support has been really, really helpful.”
A team grows faster than the operational foundation to support it
Dallas Free Press founder Keri Mitchell says she cried when she found out her newsroom had been selected for the LION-Meta Revenue Growth Fellowship.
“I was scared shitless when we launched, I was so afraid,” she says. “It wasn’t until we got the RGF invitation that I thought, ‘OK, this is going to work out.’”
Like other founders in the program, Mitchell hoped the new hire would help get most business work off her plate so she could focus on leading the editorial strategy.
But like Soto, she learned that the organization’s fundraising work wasn’t something she could simply hand off, even to the most capable colleague.
“My coach told me, ‘You are not looking for the person who’s going to sell, you’re looking for the person who’s going to provide structure and organization around the sales process – but you’re still going to have to be the person making the sale,’” Mitchell said. “That was really bad news for me.”
Despite Mitchell’s reservations, she continued to play a large role in fundraising even after hiring a development director, and this new staffing model has already shown signs of success.
In 2022, Dallas Free Press quadrupled its fundraising haul on North Texas Giving Day – from $5,000 to $21,000 – and Mitchell now expects to be able to pay herself a salary next year for the first time.
Of course, the challenge with this rapid growth is that Mitchell now has a much more complex organization to run, with multiple staff members and contributors to manage and a growing list of projects and deliverables to execute.
Mitchell recognized that she needed help keeping the organization on track, and she credits her decision to hire a fourth full-time employee – an operations and programming manager – to the lessons she learned from the RGF program.
“The cohort helped me realize that we won’t do our work well unless we have the right systems in place,” she said. “The program’s handbook and coaching gave us the guidance to know what we need to do [from an operations perspective], but we still needed a person to do it.”
What’s ahead for LION in 2023
Looking ahead, we believe LION’s role in the local news ecosystem is to help independent publishers build and run stronger small businesses. Our challenge next year is figuring out how to do this work at scale, so that more LION members can succeed in and serve even more communities.
We’ll have more details to share about our 2023 programming soon, but in the meantime, you can get updates on our work and what we’re learning by subscribing to LION’s weekly industry newsletter.
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