Making a hard thing possible
Recommendations to nonprofit media organizations and their donors on how to effectively raise funds from the reader
Paramita Mohamad
Principal Consultant,
Communication for Change
Executive summary

The decline of democracy in Indonesia has been widely argued1. Scholars have proposed a few explanations, such as anti-democratic elites being incorporated into the governing structures of Indonesia’s democracy2 and the public’s indifference to or even support for an increasingly illiberal democratic order3. We expect the media to resist the decline by providing checks and balances to the power that be. However, the concentration of ownership of media outlets may have contributed further to the diminishing diversity of viewpoints in the media market in Indonesia4.

A new hope emerges in the form of nonprofit media such as The Conversation Indonesia (started in 2017) and Project Multatuli (in 2021). Each outlet discloses that well-known donor institutions support it. To diversify income, both media seek ways to raise funds from their readers. Project Multatuli has a web page that asks for the readers’ contribution, complete with a link to the payment gateway. In 2020-21, Communication for Change (C4C for short) assisted The Conversation ID (TCID for short) in piloting a reader donation program5. The experience from the pilot and best practices from other media markets inform this document.

We are arguing that nonprofit media organizations in Indonesia will be facing an uphill battle in seeking reader donations. The challenges come from both common factors in nonprofit media and the peculiarity of Indonesian consumer behavior. We also argue that nonprofit media organizations can soften the ground by investing in brand-building efforts right from the start, but they will need significant support from institutional donors.

Reader donations remain a secondary or tertiary revenue stream for most nonprofit media

The year 2020 was good for nonprofit journalism, according to Institute for Nonprofit News (INN)6. The year saw a significant growth in the audience's size: traffic to nonprofit news sites grew by 43%, with median monthly unique visitors growing from around 35,000 in 2019 to about 50,000. Media outlets participating in the INN survey also reported revenue growth, driven by increases in individual giving and foundation funding. Yet, grants from foundations still made up the most significant portion of the total revenue at 47%, with individual giving coming in second with 36%.

The 2021’s financial statements from ProPublica7, one of the most established and frequently awarded national nonprofit media outlets in the United States, confirm the INN data. Foundation grants contributed 60% ($22 million) of total revenue, while individual donations were 37% ($13.3 million). ProPublica has other revenue streams such as programmatic advertising, sponsorships, and events, totaling $320,000.

The good news is that in 2021, by INN’s calculations the median revenue from individual giving increased 41% from the prior year to $118,000.

Most individual giving revenue comes from major donors who gave more than $5,000 (60%). A nonprofit media outlet typically has only a handful of major donors (average: 10). The second most significant contributions in individual giving come from small-dollar contributors who gave less than $1,000 (22%). The average amount of small-dollar donations per outlet jumped from $78,000 in 2019 to $115,000 in 2020. Conversely, 2020 saw a decline in the average contribution per major donor (from $47,000 in 2019 to $34,000).
The numbers show that although foundation grants still hold the lion’s share of nonprofit media’s revenue streams, reader donations from small contributors seem to be growing.

Richard Tofel, who was ProPublica’s first employee and served as its president since 2013 before retiring in 2021, added to this observation8:
“...(S)maller donations in large numbers are, at best, a third-wave revenue source and are unlikely to be meaningful until your content is fairly widely known and distributed.
For ProPublica, that took until we had been publishing for more than eight years.”

Richard Tofel, ProPublica

A profitable reader donation program must clear two daunting conditions

According to Reader Revenue Playbook by Google News Initiative, a reader revenue model is a business model in which some or all revenue of a media outlet comes from the direct financial support of readers.

A reader revenue model is positioned to supplement, if not replace, the advertising revenue model that historically most media outlets relied heavily on, including in Indonesia.
There are several types of reader revenue models:
This model is exemplified by Project Multatuli and Remotivi9.

In contribution, publishers encourage readers to contribute or donate to the media organization without restricting the core content on their digital property to any reader.

Nonprofit media outlets whose mission is to disseminate information as widely as possible expectedly prefer this method.
In subscription, outlets require recurring financial payment from the reader for full access to content.

The defining feature of the subscription model is a paywall that limits the number of articles nonsubscribers can read within a time frame.

This model has been the focus of news dailies in Indonesia, such as Kompas and The Jakarta Post.
Both contribution and subscription models can be supplemented with the membership model, where publishers offer value-added benefits to subscribers or contributors.
Retail is where outlets require one-off payment for full access to a single digital edition or issue. Retail seems to be popular for magazines, maybe because they are familiar with the model.

During the pre-Internet era, retail sales significantly exceeded subscriptions by at least four factors10. Magazines use a third-party platform like Gramedia Digital as the virtual newsstand.
It is similar to retail, but the access level is to a single article. Many outlets in developed countries have experimented with the model, but we haven’t seen a major success story yet.

Google News Initiative warns that the reader revenue model may not suit every media organization for two reasons:
  • First, it can only work when the outlet has a sizable amount of loyal readers (for example, those who visit over a certain amount of times per month). The assumption here is that loyal readers are more likely to make donations to the media.
  • Second, there needs to be a well-established audience culture to subsidize the media outlet’s content.
Let’s examine whether both conditions are met in Indonesia.

The proportion of loyal readers is expectedly small

Loyal readers usually make up a small fraction of the total visitors of a typical media outlet. We observed the same pattern in our pilot project for TCID. From March 2020 to May 2022, on average, 84% of the outlet’s visitors were new users. Returning visitors made up only 16% of the traffic, but on average, they read 11% more pages per session and spent 62% longer on the site.

Moreover, the growth of returning visitors tends to be slower than new visitors. If we compare the growth of users in the last 30 days between the time of writing and the same time the previous year, TCID saw a 31% growth of new users but only 1% of returning ones.

Can we assume that other nonprofit media in Indonesia also have a small fraction of high-frequency users? A ratio of 70:30 between new to returning users in an information site is deemed desirable by many practitioners11. In addition, empirical generalization in marketing shows the large proportion of light buyers to the total sales in a year. This pattern (called “the NBD Dirichlet”) has been found across product categories (including TV programs and online media) and countries.

According to this generalization, the shape of the curve representing the frequency distribution in a chart, where the Y-axis is the percentage of buyers of a brand and the X-axis is the number of times that brand is being purchased, will be similar, irrespective of the brand and category12, as illustrated in the image below.
A chart of frequency distribution.

Indonesians are generous, but they may not be used to donating to nonprofit media

The World Giving Index 2021 from Charities Aid Foundation places Indonesia as the most generous country in the world. Unfortunately, the nonprofit media may not yet be the beneficiary of this generosity.

First, Indonesian internet users may not be used to paying for content online yet, let alone donating money to nonprofit online media. Subscription for online media is relatively new in Indonesia, as for many years, advertising revenue fueled the media business. Tempo started online subscription in 2016, Kompas and The Jakarta Post in 2017, and Kumparan and HukumOnline in 2020. As for contribution, only Project Multatuli and Remotivi currently have a reader donation program in Indonesia.

Not being familiar with media asking for donations may help explain why our pilot email campaign to the subscribers of TCID’s newsletters yielded a low result. We and TCID identified people who subscribed to at least two TCID newsletters, assuming they might be more likely to visit the site more often. We also made a list of Indonesian scholars who have written in TCID. We then conducted the A/B testing. We sent two versions of the email asking for donations from the subscribers. One version is an appeal to continue publishing science-informed content; the other is an appeal to continue the writing assistance program for academics in Indonesia. Each recipient was randomly assigned to either version of the email.

Data from the test show both email versions and the donation landing page did not perform poorly if compared to the industry benchmarks. Each email version had an opening rate of 30% and 39%, surpassing the industry benchmarks. The click rate of the writing program version was higher at 4.8%, while the other version was 3.0%, surpassing the nonprofit’s industry benchmark and quite close to the media’s industry benchmark.

The table below summarizes the numbers.
Table 1: performance of email campaign compared to the industry benchmark

Brand building can help beat the odds

We hope that we have convinced you that the nonprofit media’s odds of raising money from the readers are slight in Indonesia. But, there is a way to make the hard thing more possible: a substantial brand-building effort that starts from the very beginning.

Brand building cultivates long-term memory structures about a brand

Brand building means creating mental structures (associations, memories, beliefs, feelings, etc.) that predispose potential customers to choose one brand over another. It is about getting people’s attention long before they buy16, or in the context of the media, long before they consume the content. It is a long-term job that involves conditioning consumers (readers) through repeated exposure. Hence, it takes time.

Besides brand building, communication in marketing can also be used for activation. Activation aims to focus on people likely to buy in the very near future. In the context of nonprofit media organizations, the focus is on people likely to donate in the very near future. It is about capitalizing on existing brand memory structures to generate sales (or donations) right now. This is a short-term job and requires relatively few exposures.

Brand building and activation have different objectives, and each works differently. Brand building requires broad-reach media because it aims to prime everyone in the market, regardless of whether they are currently shopping (or looking for something to read). And because most of the audience is not in the buying process when exposed to brand-building communication, we cannot assume that people are paying close attention or seeking information. So brand building relies heavily on emotional priming since it cuts through regardless of whether people are interested in the product and helps create long-term memory structures. For this reason, emotions tend to have more impact than rational appeals.

Contrarily, activation requires tight targeting. Rational persuasion has much more traction because the audiences are more interested in what you have to say as they are already in an active buying process. This favors information-rich media, and everything should be designed to make the customer (donor) journey as frictionless as possible.

On the one hand, activation effects are relatively easy to measure because they tend to be immense, immediate, and direct. They will likely produce the most extensive sales responses in the short term (six months or less). However, these effects decay rather quickly and aren’t bound to build much over time. On the other hand, brand-building effects are harder to measure because they only become apparent over the longer term, and there is usually no direct link to sales. But brand-building effects deteriorate more slowly.

In the long run, brand-building effects are the main driver of growth because when people have built a brand’s long-term and complex memory structures, they are likely to choose it over others in a buying situation. See the table below for a summary of the comparison between brand building and activation.
Table 2: comparison between brand building and activation in the context the nonprofit media

What blocks individual donations is a lack of awareness, not rejection

Brand building matters a lot in individual donations to nonprofit organizations17. A study in Australia in 2013 showed that the most common reason for people not to donate to a charity was that they did not recognize the organization, i.e., the brand, running it. Rejection (usually due to perceived values incongruence) was rare, and non-awareness levels were 14 times higher than rejection levels.

Therefore, nonprofit organizations—including nonprofit media outlets—should focus on raising knowledge and salience of their brands (in other words: brand building) rather than trying to negate objections.

Brand building is essential to bring new loyal readers as future contributors

Considering the empirical generalization in marketing discussed in the previous section, we should expect that the proportion of loyal readers is small for any media, including nonprofit media. So how can nonprofit media get more loyal readers (in absolute numbers) who may be more willing to donate?

The best way to get more loyal readers is to increase the total number of readers (rather than trying to nurture “hyper fans” kind of loyalty within a small base of readers). Another empirical generalization in marketing reveals that large and small brands (in terms of market share) differ greatly in how many people buy them, but not in how often or rarely people buy them. The purchase frequency score of the more prominent brands is only marginally higher than the less popular ones. And when brands grow or decline in market share, there is only a minor change in purchase frequency. Therefore, the path for a brand to grow is to increase penetration by recruiting new buyers and not deepen the loyalty of existing buyers18.

A similar pattern is observed in donations to nonprofit organizations. Another study from Australia in 201519 covering both money and blood donation shows that the vast majority of new donors gave just once or twice a year, with few giving at higher frequency levels. Once-only donors comprised the largest group in both donations. Over time, some once-only new donors became more frequent donors, but the majority remained once-only donors.

More convincingly, data on online media consumption, albeit from the US market, confirm the same pattern. The data show that an increase in unique users predicts a significant increase in the site’s average page views or the average time spent per user. Websites with high traffic and a high user base are likely to have a higher frequency per user as a bonus20.

As the number of total readers grows, so will the number of loyal readers, alias the potential donors. With a more extensive base of potential donors, we can expect a more considerable amount of donations. This confirms what Tofel, the former ProPublica President, wrote in the previous section: to expect a meaningful contribution from small donors, a nonprofit media must first ensure that it is widely known. Brand building is about making more people recognize not only the brand of a nonprofit media outlet but also have long-time, more elaborate memory structures about it.

Brand building must start early and be done relentlessly

Because brand building and activation work differently, creating communication that tries to do both simultaneously is futile. It implies that a nonprofit media organization that wants to raise funds from the readers must first do brand-building exercises because the bigger obstacle to individual donations is non-awareness instead of rejection.

Afterward, nonprofit media can run reader donation campaigns. But this does not mean that they can afford to stop doing brand building. They still have to do both but in an alternate fashion. Then the question is about the budget allocation for both campaigns. Best practice from the charity sector in the UK 21 suggests a “sweet spot” at 44% brand building and 66% activation split.

The best practice also shows that nonprofit donations face a slightly more uphill struggle in getting the audiences to engage with many of the underlying issues they deal with. But donations can get wind by emphasizing the emotional nature of said issues. Primarily emotional campaigns work hardest (meaning, giving more brand-building and activation effects) over the long term for nonprofit donations.
Almost all effective donation campaigns aim primarily to acquire new donors instead of obtaining more from existing donors. In other words, again, we see the primacy of penetration over loyalty.

Donors should support nonprofit media to do proper brand building in the long term

We learn that brand-building activities for nonprofit media must take place before reader donation campaigns. In fact, in a highly competitive media market in Indonesia, it is essential for nonprofit media to build their brands right from the beginning of the launch. And they have to keep doing brand-building activities as long as they still want to grow their reader base and reader contributions.

Brand building is, admittedly, costly. It needs to utilize broad-reach media, so paid advertising in popular outlets must be seriously considered. Such effort requires a significant sum of investment. Brand building also calls for repeated exposure over a long period. The magnitude of investment can be prohibitive for nonprofit media organizations, especially new ones. Therefore, institutional donors should support nonprofit media organizations in brand building now, so the latter will have better odds of diversifying their revenue streams and achieving sustainability.

When it comes to brand building, we strongly recommend donors not be preoccupied with short-term measures. This is because not only is brand building a long-term exercise, but its effects only become evident over the longer term. Furthermore, there is usually no direct link to website traffic or amount of donations. Instead, donors and nonprofit media must rely on “softer” measurements such as how easy it is for a nonprofit media brand to come to the potential audiences’ minds and associations (including emotional ones) toward the brand. There is also emerging research to see how viable it is to use indirect measures, such as the share of organic search of the brand name compared to its competitors or the volume, tone, and dispersion of mentions of the brand on social media as indicators of the brand-building effects.

We realize our audacity in asking donors to support a long-term, expensive endeavor whose success is hard to measure. But amidst the continuing regression in all three pillars of democracy in Indonesia, our hope lies in the fourth one, in the form of nonprofit media organizations. Citizen-supported nonprofit media organizations carry an enormous legitimacy and, therefore, the power to resist illiberalism —but they will not be able to do so without having solid brands.

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2Warburton, E., & Aspinall, E. (2018). Explaining Indonesia’s Democratic Regression: Structure, Agency and Popular Opinion. Contemporary Southeast Asia, 41(2), 255–285.

3Aspinall, E., Fossati, D., Muhtadi, B., & Warburton, E. (2019). Elites, masses, and democratic decline in Indonesia. Democratization, 27(4), 1–22.

4Masduki, & d’Haenens, L. (2022). Concentration of Media Ownership in Indonesia: A Setback for Viewpoint Diversity. International Journal of Communication, 16(0), 21

5The assistance was made possible by a grant from Ford Foundation to us.

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Communication for Change (C4C) is a consulting firm that combines rigor and creativity in social change communication. We are in a mission to help reformists get buy-in and make changes.

Since our start in 2016 we have been helping CSOs and nonprofits in communication capactity building, and planning, executing, and evaluating their communication activities. We use the art and the technique we learrned from our previous career in the advertising and marketing world.

If you want to explore how your organizations can use communication more effectively to bring about changes, contact us through WhatsApp or email.