For generations, the economics of local journalism were relatively straightforward. Newspapers sold subscriptions, but much of the money needed to employ reporters, photographers and editors came from advertising.
Local businesses paid to reach local readers. Classified advertisements filled pages with job openings, apartments, cars and items for sale. Department stores, auto dealerships and other businesses bought large display ads.
The internet disrupted that model.
Classified advertising moved to specialized websites, businesses gained the ability to advertise directly through search engines and social media, and readers increasingly shifted from printed newspapers to free digital news.
The result has been a prolonged financial crisis for local journalism — but not necessarily the disappearance of local news itself.
Across the United States, publishers are experimenting with a growing collection of funding models involving philanthropy, memberships, individual donors, sponsorships, events, nonprofit organizations and, increasingly, government and private-sector programs designed specifically to support journalism.
The question confronting the industry is no longer simply whether people will pay for news.
It is: Who pays for the reporting when traditional advertising no longer pays enough?
America’s Local News Landscape Has Changed Dramatically
The decline of newspapers has unfolded over decades.
Northwestern University’s Medill Local News Initiative reported in its 2025 State of Local News report that nearly 40% of local newspapers in the United States had disappeared over the previous two decades.
In 2025 alone, 148 newspapers disappeared through closures or mergers. Medill identified 212 counties without any locally based news source and another 1,525 counties with only one remaining source of local news.
Altogether, approximately 50 million Americans lived in communities with limited or no access to local news.
The decline does not necessarily mean there is less demand for information about city governments, schools, crime, businesses, elections, development and community events.
Instead, the financial system that historically paid journalists to collect that information has weakened.
That has created an opening for new models.
Philanthropy Is Becoming a Major Source of Journalism Funding
One of the most significant changes has been the growth of nonprofit journalism.
The Institute for Nonprofit News, or INN, represents hundreds of nonprofit news organizations across North America and conducts an annual survey examining their finances and operations.
Its 2026 Index offers an unusually detailed look at where journalism money is now coming from.
More than 400 digital-first nonprofit newsrooms in the INN network generated more than $750 million in combined revenue during 2025, the highest total recorded since the organization began collecting the data.
The median newsroom generated approximately $525,000 in annual revenue.
But advertising was far from the primary source of that money.
Foundation funding accounted for approximately 48% of total revenue among INN members.
That means foundations — rather than advertisers or subscribers — are now effectively underwriting a substantial amount of journalism produced by nonprofit newsrooms.
Philanthropic funding can support everything from investigative projects and environmental reporting to coverage of local governments, underserved communities and elections.
Large national initiatives are also directing substantial amounts of money toward local news.
Press Forward, a coalition of foundations and philanthropic organizations launched in 2023, originally set a five-year goal of mobilizing $500 million for local journalism. By October 2025, the organization said its network of funders had already committed more than $400 million.
Individual Readers Are Becoming Funders
Foundations are only part of the nonprofit-news model.
Individual donations have become another major revenue source.
INN’s data shows individual giving has grown into one of the three primary sources of revenue supporting nonprofit journalism.
Instead of requiring every reader to purchase a traditional subscription, many nonprofit organizations make their reporting freely available and ask people who value it to contribute voluntarily.
The idea resembles the fundraising model long associated with public radio.
One reader might contribute $10. Another might give $1,000. Wealthier supporters may make much larger donations.
Collectively, those contributions can pay for journalists while keeping reporting accessible to readers who cannot or do not want to purchase subscriptions.
But relying on donors creates its own challenge: news organizations have to convince audiences that journalism is something worth financially supporting even when the reporting itself can be read for free.
Advertising Hasn’t Disappeared
Traditional advertising may no longer be sufficient for many news organizations, but advertising itself is not gone.
Instead, it has become one component of a broader revenue strategy.
INN reported that earned revenue — including advertising, sponsorships, events and other commercial activity — represented approximately 17% of its members’ total revenue in 2025.
Advertising and sponsorship together accounted for 43% of that earned revenue.
The numbers illustrate an important change in thinking.
Rather than expecting one source of revenue to finance an entire newsroom, publishers increasingly combine multiple sources.
A local publisher might receive foundation funding for civic reporting, sell advertising to local businesses, receive contributions from readers, obtain corporate sponsors for a newsletter and host a paid community event.
None has to support the organization alone.
Nearly half of INN members — 49% — now use at least four separate revenue streams, up from 38% three years earlier.
Diversification may increasingly be the business model.
Sponsorships Create Opportunities — and Questions
Corporate sponsorship provides another potential source of funding.
A company might sponsor a newsletter, podcast, event, community guide or particular journalism initiative.
The arrangement can provide predictable revenue without placing all of a publication’s content behind a paywall.
But sponsorship also raises an important question for news organizations: how do you accept money from businesses that you may someday need to cover?
The conventional response is an editorial firewall.
A sponsor can financially support a news organization without receiving authority over what reporters investigate, whom they interview or what conclusions appear in a story.
Clear labeling also becomes important.
Readers should be able to distinguish independently produced journalism from advertisements and sponsored or branded content.
That distinction becomes particularly important as publishers experiment with increasingly diverse commercial relationships.
Events Can Turn Audiences Into Revenue
Some publishers are also monetizing something traditional news organizations have possessed for decades: their relationship with a community.
News organizations can organize conferences, networking events, public forums, awards programs, panels, festivals and other gatherings.
Those events can generate money through admission, sponsorships or partnerships while also connecting journalists directly with the communities they cover.
Other publishers sell services including research, specialized newsletters, licensing, content production and business directories.
The common thread is that journalism increasingly sits at the center of a larger organization rather than serving as the organization’s only product.
California Is Experimenting With Public Funding
Government involvement represents one of the more consequential — and potentially controversial — developments in local journalism funding.
California is currently experimenting with a public-private approach.
In July 2026, Gov. Gavin Newsom announced additional funding for the California Civic Media Program, which provides grants to eligible California state and local news organizations producing original journalism.
The state said $20 million had been allocated to extend the program for two additional years, with matching support from Google.
Eligible newsrooms were allowed to seek one-time grants of up to $250,000 for original reporting, civic information and local journalism.
The program’s application period closed Aug. 21, with grant recipients expected to be announced this fall.
Supporters of programs like this argue that local reporting provides a public benefit and that the collapse of local newspapers creates information gaps that markets alone have struggled to solve.
Government funding also creates an obvious concern: journalists frequently investigate the same governments providing the money.
California’s program attempts to create separation by having grants independently administered rather than allowing elected officials to select news organizations directly.
Even with those safeguards, the growing role of public money in journalism is likely to remain a subject of debate.
There Is No Single Replacement for the Newspaper Business Model
It may be tempting to search for the business model that will replace advertising.
The evidence increasingly suggests that there may not be one.
Instead, local journalism appears to be developing into an ecosystem.
Some publishers will remain commercial businesses supported primarily through advertising and subscriptions.
Others will rely on memberships.
Some will operate as nonprofits dependent on foundations and donors.
Others may combine sponsorships, events, services, philanthropy and advertising.
And some may receive funding through public-private journalism programs.
The diversification occurring within nonprofit news provides perhaps the clearest illustration of where the industry is headed.
News organizations once had a dominant economic engine.
Increasingly, they have several smaller ones.
The Bigger Question Is Independence
Changing who pays for journalism does not eliminate financial pressures. It changes where those pressures originate.
An advertising-supported newspaper depends on advertisers.
A subscription publication depends on paying readers.
A nonprofit newsroom depends on donors and foundations.
A sponsored publication depends partly on corporate partners.
A publicly supported program ultimately depends on government funding.
Each model therefore requires safeguards designed to keep financial relationships separate from editorial decisions.
That may ultimately be just as important as discovering new sources of revenue.
Local journalism cannot exist indefinitely without someone paying reporters to gather information.
But whoever pays should not determine what those reporters find.
As newspapers continue to disappear and new digital publishers emerge in their place, the future of local news may depend less on discovering another advertising boom and more on building a diverse collection of people and institutions willing to finance journalism while allowing journalists to remain independent.
Sources: Northwestern University Medill Local News Initiative, 2025 State of Local News Report; Institute for Nonprofit News, 2026 INN Index; Press Forward; State of California, California Civic Media Program.