In October, the Minnesota Star Tribune launched its Local News Fund, a charitable fund under the umbrella of the Minneapolis Foundation. The endeavor puts the newspaper into a new niche of nonprofit media, joining the ranks of MinnPost, Sahan Journal, Minnesota Public Radio, and the Minnesota Reformer, to name a few.
The Strib’s quirk is it is not transitioning to a nonprofit; it’s just created a vehicle for tax deductibility, something funders and high-net-worth individuals expect. Why does the newspaper need donations? Well, like all legacy media, the Strib struggles with an atrophying revenue model rooted in the loss of traditional advertising and circulation sources. Publisher Steve Grove is innovating like a madman to evolve, but industry trends make it challenging. Going hat in hand holds promise, he believes.
“Over the next three to four years, 25% of our balance sheet needs to look different,” Grove says. He is not trying to tread water but actually grow the business (it’s already one of the largest newspapers nationally, with a newsroom of about 220, down slightly from Grove’s 2023 arrival). But by implication, Grove is clearly concerned about the stability of up to a quarter of his revenue. He would not share revenue data, but he did tell The New York Times that the newspaper had been losing 15% of its print subscribers annually, and he was working to make up the attrition with (lower margin) digital subscribers.
“[Philanthropy is] an imperative if you want to have a newsroom our size,” Grove says. He set a goal of raising half a million dollars in Q4, which owner Glen Taylor’s foundation will match. Grove says he and members of the paper’s board and leadership are already meeting with high-net-worth individuals and foundations.
Just before Thanksgiving the Strib posted a position for a VP of philanthropy to lead its development efforts. The business hired a head of philanthropic partnerships in April. Nonprofit fundraising is a notably labor-intensive endeavor.
The Strib is not the first newspaper to do this. Its initiative is modeled after one at the Seattle Times, which endows 27 journalists, Grove says.
The effort was not as badly received as you might expect at the area’s other nonprofit media, which range from the Minnesota Reformer, which raised over $90,000 locally last year, to MPR, which raised $83.5 million, according to its most recent tax filing.
MinnPost executive director Tanner Curl says he hoped the Strib’s entry into philanthropic fundraising would draw more interest to the sector, noting, “We have quite a bit of work to do to have journalism thought of as a critical community asset. We need to tell the story of the scale of the problem the profession is facing.” He says the Strib’s short-term goal, $2 million on an annualized basis, is a significant chunk of what’s being raised locally by smaller nonprofit media ($6.5 million roughly).
“It’s so important the Strib remain strong and robust,” adds Reformer editor-in-chief Patrick Coolican, “but I don’t see why they need to be competing for limited philanthropic dollars,” noting the paper is owned by a billionaire and seems quite robustly staffed. (Taylor has said publicly he expects the Strib to break even, indicating he may be unwilling to fund losses.)
Press Forward MN, a local branch of a national effort to philanthropically endow journalism, is currently sifting through grant applications and hoping to distribute up to $10 million under the auspices of the McKnight Foundation and the Minnesota Council on Foundations (MCF). Senior MCF manager May Yang says they will prioritize media outlets that serve underserved communities, but “we’re supportive of various business models and experimentation” like the Strib’s.
“If they can pull this off, it will be good for the community,” notes Mukhtar Ibrahim, founder of Sahan Journal and a consultant to Press Forward. “I want us to get beyond the scarcity mindset.” Sahan executive director Vanan Murugesan adds, “It’s important we normalize funding journalism as part of sustaining democracy,” and the Strib’s efforts do that.
What will be atypical is that, since it’s a for-profit business, donors won’t have the kind of transparency into the newspaper’s finances that they would even have at nonprofit behemoth MPR. Grove will soon find out if that matters to funders, but it’s working in Seattle.
Ultimately, MinnPost’s Curl believes the major challenge for the entire ecosystem is training funders to view media differently. “Our case is: Whatever your mission, your second priority should be media,” he says, “because we will be covering those issues and making the public aware of the primary need that you serve.”