Foundations. The news sites leadership decided to go first and foremost after foundations. These disbursed large sums of money through project-based grants. A grant could extend over several years and fund major expenses such as salaries. But there was a catch. Lewis says: [Foundations] dont just give you money and then you figure out what to do with it. Locating foundations with goals similar to Voice s own, crafting a written proposal that would convince them to donate, and then periodically reporting back to them on how their money was being spent was more than a full-time job. Through 2007, Lewis committed more and more of his time to fundraising along with Gustafson.

They were thrilled when, in January 2008, they secured a grant from a local science foundation, Legler Benbough, committed to promoting science knowledge in San Diego. The $70,000 grant was intended to fund a science reporter for two years. Gustafson recalls:

I was able to look at some of their goals and mission and say you know, if you funded a science and technology writer for us it really would help you with all of your goals in the science area.

But to his dismay, Lewis soon learned that $35,000 a year could not fully fund a reporter. He says:

Even if the employees only going to cost you $40,000 [a year], you need to raise a lot more than just that before you hire them A $40,000 employee comes with about $10,000 in benefits and costs associated, and then about $10,000 in equipment and other expenses, and then about another $15-$20,000 in supervisory issues and such. So if you hire a $40,000 person, youd better get a grant for about $80 or $90[000].

Lewis also worried about what would happen when the grant ran out. Would Voice have to fire the science reporter? Would reliance on similar time-limited grants endanger the entire organization? Eleven months later, the dollar amount was geometrically larger, but the issues similar, when VOSD in December 2008 obtained a major grant from the John S. and James L. Knight Foundation, a Florida-based foundation dedicated to funding news innovation. [1]

Knight gave Voice a two-year, $100,000 grant. That allowed VOSD to expand its reporting staff by still another reporterthis one dedicated to covering neighborhoods. Moreover, Lewis hoped for an ongoing relationship with Knight. In late 2008, for example, Knight had plans in the works to match the grants of local foundations interested in funding news projects. Voice thought it likely that it could persuade the San Diego Foundation, with which Woolley had a strong relationship, to create such a partnership. [2]

Donations. Lewis and Gustafson also threw themselves into winning financial support from their growing base of readers. By 2008, Voice had a small audience of 18,000 or so unique visitors a monthcompared to over a million unique monthly visitors to the San Diego Union-Tribune s website. [3] Voice also had a modest but growing fan base on the social networking site Facebook.

The challenge was to turn readers into donors. Though less lucrative than foundation grants, a large number of small donations from individuals could provide leverage in persuading larger funders to support Voice. Moreover, even though small donations only slightly impacted the sites overall financial health, they contributed valuable proof of its ideological independence. Lewis explains:

The overall goal is to get as many different sources of revenue as possible Even if its just a $35 gift, it still helps to illustrate our attractiveness to a very diverse group of people If a libertarian gives us money, and a Democrat gives us money, and a conservative gives us money, and if you can get the full myriad of sources, then you can be seen as a strong organization that isnt just pushing the agenda of a few individuals. So our goal is to diversify as much as possible.

PBS and NPR offered instructive examples of strategies for convincing readers to donate. Lewis and Gustafson learned that only about one-tenth of viewers or listeners donated money to NPR and PBS, prodded by the funding drives that periodically superseded regular programming, offering items such as coffee mugs or t-shirts in exchange for donations. Among Voice s visitors, internal traffic statistics showed that about 10,000 spent more than four minutes at a time on the site. Gustafson and Lewis reasoned they should be able to get 10 percent of these readers to donate.

But as a website, Voice could not achieve the same sense of urgency NPR and PBS did through interruptions in service. They would have to make do with email solicitations and announcements on their website. Further, after disappointment in early experimentation sending mugs to donors, Lewis and Gustafson decided Voice should find a way to give their donors intangible benefits unavailable elsewhere. But, Gustafson wondered, what can you share with people that makes them feel like theyre really getting involved with your organization?

She decided to design social incentives for donors. In February 2008, she hosted an open house and tour of the newsroom for members to meet the staffand nearly 250 people showed up. In July 2008, she launched a monthly coffee series with Lewis and Donohue as a way for members to see how the site was run. She explains: I think its important when youre an online organization primarily that you do things to have an offline personality and get people engaged.

Advertising. A third obvious source of potential revenue was advertisers. Most for-profit media organizations, particularly Web-based ones, relied on advertising for the majority of their revenues. Voice, by contrast, devoted few resources to selling ads, and in 2008, money from advertising made up less than five percent of its operating budget. It was difficult to earn much from online-only advertisinga painful lesson news organizations across the country had been learning for years, and a major reason Woolley had founded Voice as a nonprofit. Yet ads were an attractive source of revenue, Lewis says, because they came without strings attached as far as editorial initiatives It is actually money you can use for the kinds of things that you need, like writers and insurance.

By the end of 2008, the Voice leadership team had met its goal: the funding base was diversified. At the same time, it was increasingly clear to Lewis and Donohue that one of them should take over full-time responsibility for fundraising and business operations. Though Lewis had largely become the de facto business manager, there remained significant overlap between his and Donohues rolesthey attended many of the same meetings and checked with one another on major decisions. The two decided to submit a proposal to the board to formalize their division of labor: Lewis would be CEO, in charge of fundraising, business, and the website, and Donohue would remain in charge of content. The board approved the proposal in December 2008.

Listen to Lewis describe his job as CEO.

Lewis would henceforth be directly responsible to the sites funders. He says: Now when I wake up in the morning, my entire goal is to provide the fuel for the engine that [the editorial side is] running. With the addition of the Knight funding to start in 2009, foundation money would account for 40 percent of VOSD funding. Another 30 percent came from major individual donors, and the remaining 30 percent from small donors and advertising. With these numbers, VOSD qualified for public charity status. But no sooner had they achieved this ambitious goal than they confronted its corollary: could they keep it up?