Local news gets a $21M fund that lends instead of grants
What's the deal? Social FinanceDealroom has a profile for this one. Try Dealroom → has launched the Local News Impact Investment Fund with $21 million in initial commitments to help local news outlets build sustainable business models. Backers include Social FinanceDealroom has a profile for this one. Try Dealroom →, Knight Foundation, MacArthur Foundation, and Press Forward. Social Finance, a nonprofit and registered investment advisor, will manage the fund and source deals.
How it works: The fund will deploy investments of $500,000 to $2 million into both nonprofit and for-profit outlets. The goal is to help newsrooms expand revenue sources and invest in new technologies, with Social Finance handling due diligence.
Why now? More local news groups are moving away from heavy reliance on grants. "It's not only grants or bust," Knight Foundation president and chief executive officer said.
What's the endgame? The fund aims to grow to $30 million–$35 million over the next two years. "We would expect to fundraise for, you know, a year and a half, two years after this," said Kirstin Hill, president and chief operating officer of Social Finance, adding that fundraising will be constrained by how much capital can be responsibly deployed.
For MacArthur, which has long given grants to local news, the fund marks its first financial investment in the sector through its impact investing program. It draws on MacArthur's $750 million pool of catalytic capital, meant for mission-driven bets conventional lenders might find too risky.
"It's effectively a more patient, more flexible, more risk-tolerant form of investing," said John Balbach, director of impact investments at MacArthur. His colleague Silvia Rivera, MacArthur's director of local news, said outlets with promising revenue models and real room to grow often cannot access that kind of capital.
The signal: The fund reflects a shift from one-off newsroom grants toward repayable, flexible capital. Press Forward's network of 130-plus funders has reported more than $400 million invested in local news, including a $20 million round for 205 small newsrooms. A $21 million investment fund stands apart if it can sustain outlets that grants alone cannot.
Read more: Axios
Image credit: Generated with Gemini
