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Saturday, September 25, 2010

Non-Profit News, via Scott Lewis, CEO of VOSD

What's that site I'm linking to, you ask? This is something we've launched to handle the string of inquiries we get from academics, media across the country and people who want to start something similar to what we've done here. NPJHub.org will be completed soon with profiles of our siblings around the country and, we hope, an active blog and source of the best new analysis of the nonprofit news business model.

Let’s do a quick review: A for-profit organization is owned by an individual or shareholders and its purpose, its mission, is to deliver dividends and value to them.

A nonprofit, on the other hand, has no shareholders, no owners. Instead, it has a mission. Bringing in money is a big factor in whether the organization fulfills that mission.

Revenue promiscuity means that we have a mission — to do public service journalism — and we’re cultivating an ever-growing collection of ways to pay for it. Most of us are obsessively pursuing all kinds of revenue sources, from syndicating content, to donations from the masses, to major contributions and grants, to corporate sponsors and advertising.

Revenue promiscuity is the product of a survival instinct. When you want to survive, you do things differently than if you want to make money for shareholders.

For instance, a for-profit start-up and its funders do not usually have much patience.

Entrepreneurs come up with a plan. They find investors. They give it a go. Maybe they stumble a bit so they find more investors and on and on and then, one of two things happen:
1) the idea works, revenue comes in and they send the kids to private school. Or
2) they fail for the last time, and unable to find more investors, decide to bury the idea. All of it can happen very fast.

The journalism professor Jay Rosen, from NYU, has compiled a menu of all the “sources of subsidy” a news entrepreneur could choose.

What is sustainability? We believe sustainability is actually defined by developing such a diversity of revenue sources that no matter what happens to one of them or a group of them, your organization can survive. It’s like a well diversified investment portfolio: set up to grow but absorb losses without catastrophe in bad times.

At our core, our ability to appeal to the entire community to support our effort and mission is itself our most valuable asset. And it is one that a shareholder owned — a for-profit — entity does not have available.

Experts from "Sleeping Around the Non-Profit Edge" - by Scott Lewis, CEO of Voice of San Diego

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