New media

Radical funding models could be key to creating new community newspapers across Canada

Non-profit media is the way of the future
Photo: Kat Northern Lights Man

At least 171 media organizations in 138 communities closed from 2008 to last January, says the Local News Research Project, a project led by the Ryerson School of Journalism. In contrast, only 51 new outlets opened.

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The loss of media is so severe that a special report submitted to the House of Commons Heritage Committee was entitled, “Local News Poverty in Canadian Communities.”

“Local news poverty, we argue,” project co-ordinator April Lindgren writes, “is greatest in communities where residents have limited or no access to timely, verified news about local politics, education, health, economic and other key topics they need to navigate daily life.”

Small communities such as Markdale, ON, and Canmore, AB, lost their local papers while the cities of Guelph, ON, and Nanaimo, B.C., were among the largest centres to be hit.

Newspapers have been crucial to the development of Canada. But “free” news from for-profit papers is coming to an end.

Daily papers are failing because millions of dollars of advertising have moved to the internet or just disappeared. An ad that brings in $1,000 in a paper sells for about $100 on the internet, and the newspaper corporations are so far unable to make a go of it online.

Corporate-owned news organizations around the world are trying to find a formula that will allow them to be profitable. However, they have made little progress in the dozen years since internet-based companies started stealing their ads and readers.

Communities poorly served

Hundreds of Canadian communities are now poorly served when it comes to local news by underfunded and understaffed internet news sites, give-away newspapers and even bloggers.

Canadian communities still should be able to have reliable newspapers. They need to explore creating community-controlled not-for-profit papers, which have financial advantages over for-profit papers. A commercial paper is expected to churn out at least 15 per cent profits or investors will take their money elsewhere. Business executives at corporations command salaries into the hundreds of thousands of dollars. The manager of a non-profit might earn $90,000. Ad sales staff at daily papers earn a large salary; not so at a non-profit. A for-profit paper pays taxes. A non-profit pays few taxes and can engage in fundraising activities.

Secondly, locally owned non-profit papers command the loyalty of people because they embrace and reflect all aspects of a community. Corporate media often filter the news so that it reflects the interests and views of the rich and powerful.

There are other factors at play as well. The internet is the future for many news organizations, but many people prefer to hold a newspaper in their hands. A printed publication tends to have more authority than an internet site. And finally, advertisers like to see their ads in print.

The Guardian: world’s best non-profit

There are no non-profit major newspapers in Canada, but hundreds of public interest organizations operate on a non-profit basis.

U.K. publication The Guardian is the most prominent not-for-profit newspaper in the world. Last year, the award-winning but financially strapped Philadelphia Inquirer switched to the not-for-profit model. Both organizations have large endowments.

I believe not-for-profit newspapers are highly desirable if a group can develop a break-even budget. This is possible in Canada.

If folks feel there’s a need for a newspaper in their community, the first step is to bring together 15 to 20 people who represent a cross-section of residents. The group can conduct a survey to determine whether people in the community support the idea.

An important early task is to have experts help develop a project model to see if the concept is financially viable. Warning: Don’t focus too much on journalistic content in the early stages. Instead, the most important thing to determine is whether the model you develop is financially viable.

Think about how groups and businesses in the community might contribute. Reach out to local journalists and media outlets to see if they would like to become involved in the project.

My recommendation is that groups create a non-profit corporation. This way any surplus at the end of the year goes back into the project. A lawyer can create a non-profit organization for about $700.

One of the biggest questions concerns how to distribute the paper. Traditional door-to-door delivery could be costly but, if the project can afford it, this is the best way to go.

‘Mini-paper’ cheap to produce

However, groups can use a much cheaper distribution system. What I call the "mini-paper" would have small pages – 8 1/2 x 11 1/2 inches - just about the same size as Maclean's magazine – distributed to subscribers by e-mail.

Subscribers would print out the paper in the morning. The group would provide a simple binding system that readers would use to hold the pages. It might be best to limit the size of any one edition to 24 pages or less.

The huge advantage of the mini-paper is that it would not require newsprint and there would be no distribution expenses.

In case subscribers prefer to access the information online, all of the articles and other information published in the mini-paper would be posted behind a paywall on a website.

The big question for any group is figuring out where the money will come from.

It should be possible to run a non-profit paper with about one-third of the revenue coming from advertising, one-third from subscribers and sustained donors, and one-third from fundraising.

Many sources of funding

I have considerable experience as a fundraiser and would be pleased to provide fundraising advice to any group free of charge. Here’s a summary of funding possibilities: - sustaining memberships, where strong supporters pay an annual amount; - subscriber fees, as is the case with any newspaper; - revenue from community advertisers; - for organizations that know how to utilize it effectively, the internet has a huge potential for fundraising; - an investigative journalism fund; - a fundraising committee could carry out a number of activities to raise money, including silent auctions, evening panel discussions, and breakfasts with guest speakers; - support from “s guardian angel,” a person in your community who has amassed a lot of money and, shown a viable business plan, might be willing to provide a fairly substantial amount of funding to help cover costs over, say, a two-year period; - government support: With the pending collapse of for-profit journalism, we need to educate governments that public money needs to be made available to help support non-profit media projects. A group should make presentations to municipal governments and the appropriate provincial government departments.

My strong advice to a group is to not launch a new paper until you have lined up funding for at least your first full year.

I know a number of Canadian non-profit experts and journalists who would be pleased to help develop a project. Several knowledgeable U.S. organizations, such as Institute for Nonprofit News and the Poynter institute, would provide advice.

The creation of even one sustainable, independent newspaper project anywhere in Canada would be a huge, unprecedented accomplishment. It could be the forerunner of other papers that would once again provide our communities with a reliable source of news and information.

Nick Fillmore is a Toronto freelance journalist who specializes in writing about media issues. He was co-publisher of The 4th Estate, a highly successful alternative newspaper in Nova Scotia. Nick was a CBC journalist and producer for more than 25 years. E-mail: fillmore0274@rogers.com

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