Newsrooms finding success in Virginia as nonprofit organizations
Virginia newsrooms, like many others nationwide, are continuing to feel the impact of cutbacks and layoffs. Now, journalists who once reported for these papers are turning to web-based startups and different funding models to fill the void across the state.
Markus Schmidt is the state politics reporter for Cardinal News, a nonprofit news organization that covers Southwest and Southside Virginia.
Schmidt covers political stories in a way that is more relevant to those regions. He said he tries to “make people understand how the issues in Richmond are affecting [readers] back home.” He stressed the organization, which started in the fall of 2021, tries to remain nonpartisan.
Cardinal News began after a spate of layoffs at The Roanoke Times. Long-time health reporter Luanne Rife teamed up with colleague Dwayne Yancey, who worked at the paper for 39 years, to begin the digital-only news organization.
“The last round of layoffs in the spring of 2021 meant that we could no longer do in-depth reporting,” Rife said. “It also meant that there would no longer be a full-time political reporter covering this part of the state.”
“We didn’t set out to replicate what someone can get elsewhere,” Rife stressed, “but to tell the types of stories that tell you more about yourselves and your communities.”
Schmidt was Cardinal’s first reporter. He was tasked with covering the Virginia legislative and executive branches. Previously, he had covered the state Capitol for the Richmond Times-Dispatch, which has undergone multiple rounds of layoffs over the past decade. According to Schmidt, the paper had at least a half-dozen reporters covering state government in the 2000s. He said with fewer reporters, “you have a situation where newsrooms statewide ... have to pick and choose [the stories they report].”
Many of Virginia’s newspapers are run by for-profit companies. The Richmond Times-Dispatch and The Roanoke Times are owned by Iowa-based Lee Enterprises, which also owns 11 other Virginia newspapers. As advertising revenue has declined, Lee Enterprises and other corporate newspaper owners have made cuts to ensure their businesses remain profitable.
As paper subscriptions declined, some outlets have ceased operations. According to a 2019 study by The University of North Carolina’s Hussman School of Journalism, Virginia saw a 38% decrease in newspaper circulation from 2004 to 2019.
Organizations like Cardinal News are experimenting with a nonprofit business model that allows them to operate based on donor dollars. “We are supported wholly by donations from foundations, corporations and individuals,” Rife explained. “Most people understand that when I say we’re based on the same model as public broadcasting. They get it.”
Cardinal began with a challenge grant offered by The Secular Society; Carilion Clinic and Dominion Energy matched it. Cardinal also received a grant from the Danville Regional Foundation to fund a reporter position. In addition to nonprofits, local foundations and corporate support, they are building a revenue stream of small donors who read and support Cardinal News, and are operating on a $650,000 budget this year.
Veteran reporter and former Virginia Commonwealth University journalism professor Jeff South warned, however, the donations could eventually dry up.
“There’s not an unlimited supply of deep-pocketed foundations to help news organizations that are nonprofit,” South said, adding that individual donors might experience fatigue from contributing to multiple news organizations.
One nonprofit is experimenting with a different model. The Virginia Center for Investigative Journalism has partnered with Hampton Roads-based WHRO Public Media to cover in-depth, investigative stories statewide.
WHRO News Director Mechelle Hankerson explained: “We have this infrastructure that allows us to be financially sound as a newsroom. We know what our funding is going to be year to year.”
Hankerson said the nonprofit model might be an “even more reliable funding source.” She pointed to the unreliability of investors such as New York-based hedge fund Alden Global Capital. In 2021, it purchased Tribune Publishing, which includes The Virginian-Pilot and the Daily Press. Alden has a reputation for cutting costs and selling newspapers’ real estate to increase earnings.
“When something becomes not as valuable to an owner whose only interest is making money, they just offload that asset,” Hankerson said. “We saw that with The Virginian-Pilot. Because to the hedge fund that owns them, it’s just an asset. It’s not any more or less important than a couch they want to get rid of in their office.”
Despite cuts at traditional newspapers across the state, Hankerson has reason to be optimistic.
“The power of a regular person pulling the money that they can pull together and giving it to us or whatever nonprofit entity is something that proves we’re doing something right,” she said.
Disclaimer: WHRO News is a partner of VPM News, which also is a community funded outlet. The organizations regularly share content for web and radio.
Correction: Information about funds that Cardinal News has received ha been updated to reflect more varied sources of income. VPM News regrets the error.