EDITOR’S NOTE: In the spirit of sharing lessons from some of the first grantees of the INNovation Fund, this post highlights some of the challenges and realities in experimenting with revenue generation at nonprofit news organizations. Lyle Muller, Executive Director of the Iowa Center for Public Affairs Journalism, reached out to us and shared what he has learned so far since receiving the $25,000 grant in April 2014.
This phrase jumps out in the latest report on lessons recipients of Knight News Challenge grants in 2010 and 2011 have learned:
Certain important elements of a project—such as product promotion and content creation—can be outsourced in some cases to users, evangelists, and the open source community. But other critical elements—such as core software development, business development, and fundraising—should generally be entrusted to dedicated, paid project staff.
That’s what we did at the Iowa Center for Public Affairs Journalism-IowaWatch when we developed a radio program called the IowaWatch Connection that has been airing all summer on a statewide network of 17 radio stations.
We used a $25,000 John S. and James L. Knight Foundation grant through the Investigative News Network to hire one of Iowa’s best-known broadcasters and historians to create the program and market it to radio stations: Jeff Stein.
Finding funding is a big part of his job. We felt doubly blessed because he has a law degree, which came in handy when he wrote contracts with participating stations. Plus, he is the executive director of the Iowa Broadcast News Association, which gave him credibility and contacts with those stations, and has been a journalism professor at Iowa colleges, where he had to write grant applications.
Funding is to come through radio program underwriting, sponsorships for a series of public forums and, hopefully, donations from new consumers. Vision for the program? Check. Audience determined? Check. Value proposition articulated? Yes. Person with expertise in place to devote full time to the project? Check.
Yet, you likely are missing a step if you don’t fully grasp in the report the word, “fundraising.” A sales person should be one of those full-time staff members to which the report refers. One dedicated person for the product; one dedicated for sales. You might think you are a full-time staff resource if already on staff doing what you have done since joining your nonprofit organization. Fact is, however, you are more like a volunteer if sales for innovation is not your full-time job. The reason: it is an added duty after you devote full time to doing your existing job properly, and the role might not even be in your wheelhouse.
IowaWatch began planning the IowaWatch Connection radio program and contacting potential funders in March. We held our first public engagement forum, part of the overall project, in April and raised a modest $500 while developing radio programs. We spent May and June talking with potential funders and producing radio programs before hosting another forum and launching the program in July. We’ve spent August chasing funders, trying to schedule our next forums, and making course corrections.
We grew the number of radio stations airing us at the start from 16 to 17. The 17th station has a loyal local following, covers three states and, in a bit of trivia we have used in social media marketing, was where the Everly Brothers performed when growing up in Shenandoah, Iowa, before growing out of their teens and into lifelong stardom.
Our shows run 20 times each weekend in all of Iowa but a tiny northwest portion and parts of six other states. Radio station managers have sent us notes telling us what a great show it is. Some sources have said the same. The show is produced on time, using a mix of professional staff and, under the guidance of that staff, college students to deliver stories. The program is fresh, weekly podcast content on our website and has helped us recruit, with no speaker’s fee, noted radio talk show host Jim Bohannon as the guest speaker for an Oct. 2 banquet in Des Moines.
Our two forums had sponsors but the $1,250 net income remains relatively small at this point in time.
But while enjoying these success, we have endured sales rejections from potential funders who like what we do but either don’t have money in their budgets or think the show is not the right fit at this time. The box score: seven rejections; three pitches whose results are pending into September; one grant application delayed by a funder who asked us to apply but is listening to what we do before letting us know in October if we get funds; and more than a dozen who were unavailable for much of the summer because of vacations, schedule availability and, remember we are in Iowa, the state fair.
We have a plan for September. The radio show host is finishing in August shows that are to run through September so that he can devote all but the last few days of September on sales. He will be paid commission only so his income for the month depends upon his success in sales. We will evaluate the last week of September whether or not the show has taken hold with funders and continues.
As we learn and adjust, our experiences allow us to pass on these tips to others seeking INNovation Fund grants:
- Include sales in your application. Advice in the first round was that applications to hire someone simply for sales to see if he or she would be successful, without any shovel-ready product, would not have a good chance. Likewise, with simply applying for funds to hire a consultant who could help you figure out ways to raise money. But if you have that product, selling it to potential funders will take time and expertise.
- Sales work is full time. This especially is true if you have a small window of time in which to experiment, evaluate and decide whether or not to more forward or cut bait.
- Sales work requires specific skills that are honed by professionals. That is why good ones make a lot of money and bad ones don’t.
- Making sales is tedious work. You are in the same market as for-profit organizations. Ten calls will yield one bite. Ten bites will yield one listen. Ten listens will yield one sale. Ten sales will yield the big one for which you had hoped.
- Even those who buy may take some time to do so. You might not get a positive decision for several months.
- Don’t be overconfident, even if you have had success with previous fundraising. Your product is new, requiring explanation and nurturing for marketing people who make decisions on behalf of their company not only on audience reached but budgets already stretched through multiple advertising and marketing outlets.
- The norms about sales – its about relationships, not taking money, for example – apply to you, too.