Local newspapers are failing. Can they convince wealthy donors to save them?
As gunshots rang out last year at a Minneapolis church during a back-to-school mass last August, journalists for the Minnesota Star Tribune flocked to the scene of terror.
Courts reporter Jeff Day heard the mayhem at Annunciation Catholic Church from a nearby backyard, called 911 and rushed to the scene of the mass shooting, which resulted in the deaths of two children and 28 injuries. Within 20 minutes after the shooting began, three reporters and three photographers with the state’s largest daily newspaper had been dispatched to the church.
The newspaper’s community-centered coverage of the shooting was honored last month with the Pulitzer Prize for breaking news reporting, praised by the Pulitzer board for its “thoroughness and compassion.”
But now the Star Tribune is undergoing an internal shakeup that raises questions about its long-term viability as Minnesota’s newspaper of record.
Executives plan to place the news outlet under the ownership of a nonprofit foundation supported by the generosity of readers, a leaked memo reveals. The memo — which also outlined buyouts and layoffs across the organization — suggested the newspaper itself would remain a for-profit entity. Chris Iles, a Star Tribune spokesperson, declined to comment for this story.
The change at the Star Tribune comes at a moment of profound fiscal turmoil for news publishers nationwide, particularly as the rise of artificial intelligence has left outlets struggling to capture new online audiences and advertising revenue. An increasing number of outlets are turning to the goodwill of philanthropists for survival, data released Tuesday show.
Recent examples include the Pittsburgh Post-Gazette, which was acquired by a nonprofit in May after its previous owners announced plans to close the 239-year-old publication outright to end years of financial losses and a long-running labor dispute.
“The truth remains that changes in the media business are accelerating faster every day,” Steve Grove, the Star Tribune’s CEO and publisher, wrote last week in the memo to staff, which the news outlet Racket published in full. “The business model and organizational footprint that has sustained local news for generations is undergoing its biggest disruption ever.”
Can a nonprofit pivot save the Star Tribune?
As the Star Tribune pursues a business model shakeup, it’ll likely navigate that transition with fewer employees. In the leaked memo to Star Tribune employees last week, Grove revealed news that’s become part of everyday life in the media business: buyouts and layoffs.
Grove announced the workforce would be reduced by some 15% at the Star Tribune, which has been owned by Minnesota billionaire Glen Taylor since 2014. The cuts will hit all departments at the organization, which currently employs just shy of 500 people, including just under 200 journalists. The newsroom will take a hit, Grove said, but reporters and photojournalists will be spared.
Day, the Star Tribune courts reporter who also serves as co-chair of the Star Tribune Newspaper Guild, told the newspaper — in its own reporting on the changes — about plans to fight back against the announced layoffs.
”The management’s argument that this decision, these layoffs, will improve our company in any way, shape or form lacks any foundation in reality,” Day said.
In his memo, Grove said that its billionaire owner has “only ever invested money” in the newspaper’s future, and has “never once taken a profit from it.”
But the time had come, Grove wrote, for company leaders to develop “a long-term plan for the stewardship of this organization” in an increasingly digital environment.
“The intention is to explore placing the Minnesota Star Tribune under foundation ownership, similar to other for-profit newsrooms owned by foundations, to expand opportunities for philanthropic donations to support the core business,” said Grove, who noted that additional plans would be released in the next few months outlining ways philanthropists could sustain the publication into the future. “The purpose of sharing this intention now is to give you a vision for the direction we’re traveling, and to allow us to begin building that model together with the community.”
The pivot at the Star Tribune could improve its financial situation while ensuring its independence even if the paper itself remains a for-profit entity supported in part by advertising, said Jonathan Kealing, the chief network officer at the Institute for Nonprofit News, a consortium of not-for-profit journalism organizations.
“I”m always happy to see more organizations recognizing that journalism is a community asset and should be operated for community benefit, not to enrich individuals or corporations or hedge funds,” he told Straight Arrow, which is owned by billionaire businessman Joe Ricketts, the founder and former CEO of TD Ameritrade.
Still, Kealing said the Star Tribune won’t be able to “wave a wand” and become a successful nonprofit.
“Being a nonprofit and receiving donations from community members really requires expanding the way you think and changing the way you operate,” he added. “There’s definitely a lot of work ahead of them to become a successful nonprofit publisher if that indeed is the steps that they take.”
Are nonprofits the future of news?
In the modern media environment, nonprofit-supported news falls into several categories, Kealing said. They include the Salt Lake Tribune and the Baltimore Banner, which he called “full-fledged nonprofit” news organizations owned by nonprofits. The Pittsburgh Post-Gazette, which was acquired by the Baltimore Banner’s parent company, likely falls in this category, he told Straight Arrow.
And then there are for-profit newspapers owned by non-profits, including the Philadelphia Inquirer and the Tampa Bay Times. Based on the leaked memo, the Star Tribune would likely fall in this category.
“They can sell advertising, they pay taxes on their advertising, they pay taxes on their revenue, but all the profits from that publication flow to a nonprofit, and that nonprofit usually also accepts donations on behalf of the organizations,” Kealing explained. “It may seem subtle, but it’s actually quite different.”
In a new report released Tuesday, the Institute for Nonprofit News reported optimistic numbers for its members “in a trying year filled with increased safety risks for reporters on the ground, funding recissions and more demand on philanthropy to cover federal funding gaps.”
In 2025, the trade group found, 412 digital-first nonprofit news organizations collected more than $750 million in combined revenue, a 14% increase over 2024. The nonprofit outlets also reported increased web traffic and newsletter subscriber growth.
The newest nonprofit newsroom on the block is the Pittsburgh Post-Gazette, which was acquired by Baltimore Banner parent company Venetoulis Institute last month for an undisclosed amount. Maryland businessman and philanthropist Stewart Bainum Jr. founded the Venetoulis Institute in 2022 with a $50 million commitment.
Baltimore Banner CEO Bob Cohn said the organization is “committed to solving a national problem”: the decline of high-quality local news.
“That is our civic mission,” Cohn said. “And here is an opportunity to do that in a market where the 240-year-old incumbent is going out of business or could be sold.”
Minneapolis is already home to nonprofit, digital news outlets: MinnPost and Sahan Journal. Meanwhile, the Star Tribune’s business model could more closely resemble that of the Philadelphia Inquirer, a for-profit newspaper owned by the non-profit Lenfest Institute for Journalism since 2014.
In January, Inquirer CEO Elizabeth Hughes explained how the arrangement saved the publication when it was threatened by bankruptcy.
The key to its success under the new model over the last decade, she wrote, was “convincing civic and business leaders that The Inquirer was a vital asset worth investing in.”
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Ella Rae Greene, Editor In Chief
