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Nonprofit Management

The Most Adaptive Survive

Success stories of nonprofit media organizations that overhauled their business models during a period of chaotic change.

Few industries have experienced as much tumultuous change over the past decade as journalism. And just as newspapers and other outlets struggle to remake their business models, nonprofit media organizations are also fundamentally changing. On the one hand, they are enjoying new opportunities to enter the investigative and local media spaces. On the other, they are facing new and profound challenges as traditional revenue sources, such as foundation support and member dues, shrink.

In talking about the shakeout in the field, many mention the maxim usually attributed to Charles Darwin: “survival of the fittest.” But that is not what he said—and it is not what is most relevant to today’s nonprofit media organizations. Darwin actually said: “It is not the strongest of the species that survives, it is the one that is the most adaptable to change.”

That was the conclusion of a recent study of the Challenge Fund for Journalism (CFJ), a seven-year initiative that provided matching grants, coaching, and other resources to 53 nonprofit media organizations. CFJ was a funder collaborative through which the Ford, Knight, McCormick, and Ethics and Excellence in Journalism Foundations pooled funding and took a novel approach to supporting an industry under siege. Instead of just providing funding, CFJ sought to spur organizations to adapt by becoming more innovative and willing to overhaul their business models. Enlisting the management consulting firm TCC Group to guide participants on this journey, the initiative provided hands-on coaching on everything from “making the ask” in fundraising to drafting strategic plans.

Collectively, CFJ helped the organizations leverage $3.6 million in grants into almost $9.5 million in matches. The evaluation revealed that 91 percent of grantees achieved their fundraising match requirement. Equally striking, 85 percent reported that they experienced positive organizational change as a result of CFJ.

Who adapted most effectively? Those who realized that “business as usual” was not an option. Many overcame long-held assumptions that individual donors would not want to support them—or would consider them less compelling than disaster relief organizations, soup kitchens, or alma maters. They ramped up their efforts to attract individual donations and moved beyond the few large foundations dedicated to journalism. Instead, they turned to funders that were interested in democracy, to grantmakers that cared about coverage of issues such as public health, and to family and community foundations.

They also went out of their comfort zone to solicit financial support from corporations in a way that was consistent with their values, and avoided conflicts of interest. In addition to grants, those groups that produced content found new ways to monetize it, attracting more paid sponsorships and advertisements. Some membership organizations did away with member dues, instead offering a menu of revamped services.

The International Center for Journalists (ICFJ) was one of these success stories. Improved leadership was the key to increasing and diversifying revenue, says Vice President for Development Vjollca Shtylla. In particular, she stresses the importance of the board’s expanded engagement in fundraising. The result: Revenue from planned gifts and bequests more than doubled between 2009 and 2012.

Other organizations tapped new sources of donations, adding systems that reinforced these changes. They also got creative. The Center for Public Integrity (CPI) began cultivating donors by tying communications to what they care about most: its investigative reports. In addition to re-engineering its website, CPI redesigned its report releases for an online audience.

Investigative Reporters and Editors (IRE) recognized the critical link between its programming and fundraising. The group strengthened its training materials to better demonstrate its value. It also worked to cultivate diverse revenue streams. While membership went down one year, Executive Director Mark Horvit says, “Thankfully, because we have at least six different revenue streams, a drop in any one area is not as disruptive.”

In short, the most adaptable and well-led organizations turned disruption into opportunity. And their advances have sustained. More than 80 percent of grantees in the initiative reported that they have maintained some increases in organizational capacity, and 90 percent held onto diversified revenues.

One executive director of a large membership association goes so far as to say that his organization emerged from the economic crisis even stronger. “Today, diverse revenue streams and strong nonprofit management are highly regarded among board leadership,” he says. “The outcome [of the crisis] turned out to be a hard-earned education on what it will take to survive.”

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