Building a nonprofit news empire: Cityside’s blueprint for success in the Bay Area

As a nonprofit, we can do everything we did as a for-profit organization. We can sell advertising; we can have our membership program. In addition, we can talk to foundations.”

Lance Knobel, co-founder and CEO of Cityside

Lance Knobel wants everyone to know he has yet to find the magic bullet.

Funding and creating journalism in the Bay area of California is challenging. But it’s not impossible.

The nonprofit model is working and growing for Cityside, a journalism organization that began as a struggling for-profit online publication. Knobel, co-founder and CEO of the organization, has been with Cityside since 2009, when he and others noticed the absence of local news in Berkeley, California. In June, the organization announced the launch of its third website covering Richmond, California, completing a trio of websites covering Berkeley and Oakland.

Knobel and colleagues Tasneem Raja and Tracey Taylor started Berkeleyside.com in 2009. They filled a news desert with Oaklandside when the Oakland Tribune shut down. Now, they’re expanding into Richmond with Richmondside, where the city’s major outlet is owned and published by Chevron, an energy company with a petroleum refinery in the city.

The populations of Berkeley and Richmond run about 120,000, while Oakland’s population sits at about 430,000. All content is free to readers.

“When we launched Berkeleyside 15 years ago, we were not a nonprofit. We launched as a nominally for-profit. There were never any profits, but we decided to launch that way, and it was only in 2019 that we converted it to a nonprofit. It was one of the best decisions we ever made,” said Knobel.

He continued, “In 2016, we did a direct public offering, where we went to our readers and said, ‘Invest in Berkeleyside.’ We raised over a million dollars from the community. About 350 people bought shares in Berkeleyside.”

To his knowledge, Cityside’s public offering model — much like the Green Bay Packers did in the NFL — was the first of its kind for a media organization. The move supercharged the organization’s momentum. From there, Cityside moved into its nonprofit model. Cityside secured investments from the American Journalism Project and the Google News Initiative — each more than $1.5 million. Those investments helped Cityside launch its Oakland website and hire talented journalists.

“As a nonprofit, we can do everything we did as a for-profit organization,” Knobel said. “We can sell advertising; we can have our membership program. In addition, we can talk to foundations. Most foundations only make grants to nonprofit organizations. We could go to wealthy individuals and encourage them to donate. Where we live, there are a lot of people who are very philanthropically minded — who believe in our mission of providing the news and information that the communities need and deserve.”

Now, Cityside draws revenue from four sources: foundations, major donors, memberships, and advertising and sponsorships. About 33% of the revenue comes from foundations, 30% from major donors, and 25% from sponsorships.

The investments and donations have yielded benefits to journalism.

Just a couple of months into its existence, Richmondside is publishing a series of stories about why its city has some of the worst air quality in California. The city has a long history of heavy industry, and residents there, according to its reporting, experience cardiovascular disease at higher rates, visit emergency rooms more often and have shorter life expectancy than other locations within the county.

In early August, Richmondside.com had attained 1,500 newsletter subscribers and about 150 memberships. Also in early August, Cityside’s Richmond site was announced as one of six cohorts to receive funding from the Knight Foundation as part of its Knight Growth Challenge Fund.

“I said earlier we’re very happy with how things are going, but it’s still a really difficult business,” Knobel said. “Don’t sugarcoat it. We have not discovered the secret to eternal life. It’s really hard work.”

Bob Miller has spent over 25 years in local newsrooms, including 12 years as an executive editor with Rust Communications. Bob also produces an independent true crime investigative podcast called The Lawless Files.