But the lesson here is one of the importance of building a sustainable model -- and how hard that is to achieve. The Independent, which has eight sister publications still operating in states from Colorado to North Carolina, ran out of money in part because it had received grants from supporting foundations on a year-to-year basis, according to David Bennhehaum, president and CEO of the American Independent News Network.
Here's part of what he said to the New Mexico Business Weekly:
Bennehaum concedes one problem with the business model was that the creators of the network only secured one-year commitments from foundations for what was a multi-year project. Many of those commitments expired in the first quarter of 2009 — right after the financial meltdown in fall 2008. As a result, many funders were not in a position to recommit.
Ouch.
Could Bennehaum have anticipated the impact of a downturn in the economy? Maybe. Should he have insisted on multi-year commitments such as the rolling, three-year, $10 million-a-year commitment the Sandler Foundation has made to ProPublica? Again, maybe. But had he done so, he probably never would have gotten off the ground.
