You may have heard the motto about not putting all your eggs in one basket.

This is particularly meaningful for newspapers. For decades, they have relied heavily on advertising revenue. About 20 years ago, this arrangement stopped working because the audience moved online and advertisers followed. News outlets are also moving online, but they find themselves fighting for advertising fundraising for new digital rivals like Craigslist, Facebook and Google, such as new digital competitors. Over the past two decades, one-third of our newspapers have been closed, most of them local.

As their revenue from advertising and subscriptions has decreased, some news organizations that used to rely primarily on advertising revenue, such as the Salt Lake Tribune and Philadelphia Inquirer, have become nonprofits - opening the door to other sources of income. As nonprofits grow, interest in setting up news organizations has been growing. Meanwhile, some for-profit media have begun to receive some charitable support and require donations from readers and subscribers.

I myself am a journalist and a former journalist. To better understand how news leaders think about their future in this ever-evolving landscape, I looked at fundraising methods for local nonprofit news media in the United States

I interviewed 23 local news leaders to learn about their fundraising strategies and their opinions on the best way to balance funding sources in the long term. I found that nonprofit news media media found it necessary to pursue a variety of revenue streams, including foundations, in search of sustainable business models. However, the ideal portfolio of income for each organization may be different.

The foundation is half the bill

In recent years, the Foundation, especially the Knights Foundation, has become a major supporter of nonprofit news media. According to the Nonprofit News Institute, the foundation provides about half of its revenue to nonprofit news media in 2023. Another 29% come from personal donations. 17% comes from advertising and other sources of income obtained rather than donations.

Funds raised through the foundation can be greater than advertising revenue and are more predictable. But it usually has attached strings. For example, in exchange for a grant, media channels may be under pressure to adjust their editing priorities or adopt specific technologies.

The nonprofit news leader I interviewed also said the foundation is more interested in launching new organizations than maintaining media that are already up and running.

Now, it’s more obvious than ever by telling them to support nonprofit news organizations that don’t rely on too many foundations anymore. The Knights Foundation and other funders have informed potential applicants that they must demonstrate that they are pursuing income diversity as a condition for receiving a grant.

In other words, nonprofit media shouldn’t put all their eggs in a base basket either.

Branches

The local news leaders I interviewed said they don’t necessarily see various sources of income as a pathway to sustainability. and to add new revenue streams, including costs, such as hiring member directors or advertising sales staff. Local news leaders say it's hard to know if making these investments will pay off.

Nevertheless, they have been branching out in recent years under pressure to rely on base and more income. According to the Institute for Nonprofit News, the foundation provided 57% of nonprofit news revenue in 2018; in 2024, that share fell to 51%.

But it is not clear how much income other sources can earn. Readers’ donations are often offered in small quantities, so news organizations need a lot. Individuals donate to news organizations for various reasons, so news organizations need to hire fundraising activities that can produce a variety of information. But it’s hard to get a large number of readers to donate because the audience of local news is often small.

Nonprofit news organizations can also accept advertising. However, unlike donations, advertising is a taxable form. The IRS also warns organizations that they may lose their tax-free status if they receive too much income that has nothing to do with nonprofit organizations, including advertising.

Gather donor funds

Ultimately, the nonprofit news leader I interviewed said that every type of income has its drawbacks. And the more complex their income portfolio becomes, the more complex their fundraising methods become.

Local news organizations that already operate on budget are not able to complicate fundraising activities, although they say they agree with the general principles of income diversity.

The head of nonprofit news does have encouraging words to say about the new fundraising trend: the pooled donor funds. With the combined donation funds, multiple donors contribute to a charity, an intermediary that donates money to a specific nonprofit organization.

For the media, examples include the Institute for News Strategies for nonprofit news organizations and launching a coalition of 20 foundations.

The combined donor funds can be considered a form of income diversity because they combine contributions from multiple sources and are used to convince individual readers to “match” the donations from the combined funds with their own contributions. As grants from various foundations come and go, this could quarantine news organizations from major changes.

Study the role of "earning income"

I plan to publish the results of another study soon. It's about the role of "earning income", namely advertising, sponsorship and other sources of entrepreneurial funding, which is funding for nonprofit news media.

The Institute for Nonprofit News calls it "a minimal underutilized source of income for nonprofit news."

But the nonprofit news leader I interviewed had a bad view of revenue. In some ways, this is because of guidance on how many IT news organizations may be accepted without endangering their tax-exempt status.

News organizations may be even less willing to test these restrictions given President Donald Trump’s recent threat to other nonprofits, including universities and hospitals.