New York nonprofit newsroom The City is slashing costs in the latest sign that philanthropists around the U.S. are tiring of supporting journalism.
Over the past several days, the organization has held meetings with staff to walk through parts of its finances. One person with knowledge of the situation told Semafor that funding had dropped by at least $1.5 million this year, a significant decrease for the local operation. In 2021, the City reported that it brought in just over $7.5 million in contributions.
Major donors have reduced funding or abstained from giving altogether. One of the biggest donors to The City, Craig Newmark Philanthropies, dialed its support down to just $10,000, a significant drop from the millions it had committed in past years. The Ford Foundation did not renew its grant for the City at all this year.
In order to avert layoffs, the news organization came to an agreement with staff to cut working hours by 20% to take advantage of the New York State Workshare program, which allows employees to be partially compensated by applying for state unemployment with New York.
In a statement, Nic Dawes, Executive Director of The City, said that he was encouraged by The City’s 33% audience growth this year. But he said that nonprofit journalism was “not exempt from the forces affecting philanthropy and the wider media sector,” and acknowledged that the news organization had experienced a “very significant drop in revenue.”
“We have been exploring ways to reduce our costs, while keeping the engine of our journalism firing and sustaining our ability to fundraise,” Dawes said. “Although this path is the best option for us and preserves the newsroom and wider organization, it is still a tough and painful moment.”
Investigative journalist Tom Robbins, a senior reporter and advisor for The City, resigned this week to help stave off other potential job losses. In a note to staff, Robbins said working there was a “last chance to work in a real newsroom with really fine folks dedicated to the job.”
“I never worked at a paper that didn’t hit rough waters of one kind or another,” he said. “The City has real heart which is rare in this biz and will weather this storm.”
In recent years, nonprofit newsrooms have proliferated across the country as journalists and concerned deep-pocketed philanthropists and organizations look to the nonprofit model to fill the void left by the decline of local newspapers. And it worked: From Hawaii to Maine, the nonprofit model has invested in breaking major local news. Since its founding in 2018, the City has broken major stories about New York political figures, and employs an impressive roster of some of New York’s most respected local journalists.
But many news nonprofits have experienced the drawbacks of the model this year.
Large and small funders have reduced donations significantly to news nonprofits across the country this year. The City is hardly alone: Semafor first reported last month that a decline in corporate sponsorship revenue, which typically stemmed from marketing and government affairs budgets, forced the nonprofit Texas Tribune to make cuts. The Intercept has also continued to send out blunt emails to readers: In an email on Wednesday titled “We’re facing some major headwinds,” Intercept co-founder Jeremy Scahill wrote, adding that it was the “most challenging environment for digital news that we’ve ever faced.”
Nonprofit news organizations have also run up against the success of their own model. Multiple nonprofit news insiders told Semafor that the increasing number of news nonprofits has outpaced the money available from donors, creating a competition for a limited pool of money.
Disclosure: Semafor’s editor in chief is a former board member for The City.