Although nonprofit news outlets are a growing new source of information for Americans, they face substantial challenges in securing their long-term financial sustainability, a report from the Pew Research Center finds.

Based on an audit of a hundred and seventy-two active nonprofit news sites launched between 1987 and 2012, the report, Nonprofit Journalism: A Growing but Fragile Part of the U.S. News System (26 pages, PDF), found that most such outlets are small and have minimal staffs and modest budgets. Indeed, in a survey completed by ninety-three organizations, 54 percent of respondents identified business, marketing, and fundraising as the areas of greatest staffing need, while 39 percent cited editorial needs. In addition, 62 percent listed "finding the time to focus on the business side of the operation" as a major challenge, while 55 percent cited "increasing competition for grant money."

The report also found that 61 percent of the news outlets surveyed received a startup grant from a foundation that accounted for at least one-third of their initial funding, but only 28 percent reported that the funder had agreed to renew the grant in whole or in part. "As crazy as the earned revenue situation is, it is usually harder to predict the flow of philanthropic money," said Ruth McCambridge, editor-in-chief of the Nonprofit Quarterly. "The thing we know about philanthropy is that it is often fad-driven and impatient....They see themselves as seeding endeavors."

The study also found that roughly two-thirds of the news outlets audited are sponsored or published by another organization; that 47 percent generated less than $250,000 in revenue in 2011; and that only 29 percent have independent 501(c)(3) status.

Funding concerns aside, survey respondents expressed optimism about the future, seeing themselves as filling a gap left by shrinking commercial news outlets. Indeed, 81 percent of the organizations surveyed said they were "very" or "somewhat confident" that they would be financially solvent in five years, while 40 percent expected to hire new staff in the coming year.

"These nonprofit outlets are a growing and potentially important source of news, but just like commercial journalism, they face financial challenges," said Amy Mitchell, who co-authored the study and is acting director of Pew Research Center's Project for Excellence in Journalism. "One clear takeaway from our new survey is that many of those running nonprofit news outlets do not feel sufficiently equipped to manage long-term business needs."