This article was originally published on Northwestern University’s Medill Local News Initiative website and is republished here with permission.
Block Club Chicago — a nonprofit newsroom that has been accumulating reporters, readers and accolades — hit one milestone last month and reaches another one Tuesday.
Last month, Block Club Chicago officially outlasted its predecessor, DNAinfo, a Chicago online news startup that operated for four years and 11 months before billionaire owner Joe Ricketts abruptly shuttered it (and the Gothamist network of sites) in November 2017. Newly lacking funding and employment, DNAinfo editors Shamus Toomey, Jen Sabella and Stephanie Lulay chose to continue their mission and started a new neighborhood news site from scratch, Block Club Chicago, on June 13, 2018, exactly five years ago
The name refers to a type of Chicago neighborhood association where people band together to share information and improve the community. Block Club Chicago’s stated mission remains “to build community through truly ground-level reporting of the city’s neighborhoods.”
As it marks its fifth anniversary, Block Club Chicago has built a news staff larger than DNAinfo’s and accumulated almost 20,000 subscribers while becoming a major player on the local journalism scene. The site has broken major news stories, such as Loretto Hospital’s diversion of COVID-19 vaccines from its underserved West Side community to ineligible people with ties to the hospital’s top administrators, such as some who attended one executive’s church and others who lived in Trump Tower. That reporting, led by Kelly Bauer, prompted the Loretto CEO’s ouster, an FBI investigation and follow-ups from national and local news organizations.
On the lighter side, Block Club went viral with its contest to name an alligator found swimming in the Humboldt Park lagoon (Chance the Snapper triumphed over Ruth Gator Ginsberg and Croc Obama, among others) and sold T-shirts (“Chicago Is for Lovebirds”) depicting Monty and Rose, the piping plovers that nested at Montrose Beach on Chicago’s North Side.
The diversity of coverage is evident in the five Peter J. Lisagor awards (presented by the Chicago Headline Club, a branch of the Society of Professional Journalists) that Block Club Chicago won in May honoring a report about racial inequity in police traffic stops, deadline reporting about a fatal fire, a photo series, video and use of social media in a series.
But the lessons to be learned from Block Club’s approach extend beyond accolades. While plenty of neighborhood-focused sites have faltered, Block Club Chicago has maintained an upward trajectory on both the journalism and business sides while remaining true to a core set of principles. It has built up its coverage neighborhood by neighborhood — it now reports to cover 45 of the city’s 77 community areas — while continually adding reporters. It has funded that work largely by asking the community to pay for it.
Subscribers benefit not only from unlimited access to the site’s reporting but also newsletters written by the neighborhood reporters offering additional information and story links. At the same time, Block Club continues to make much of its reporting free, including breaking news and public-health coverage as well as reports from the city’s traditionally underserved South and West Sides.
Foundations have taken notice and last year announced two grants — each for $1.6 million over three years — that may prove to be transformative. One, from the McCormick Foundation, aims to boost the site’s investigative reporting while the other, from the American Journalism Project, is enabling Block Club to hire five staffers (three in place so far) focused on raising revenue. Block Club co-executive editor/co-founder Stephanie Lulay views the grants as major steps in the quest for sustainability as a newsroom serving Chicago’s diverse communities.
Although Block Club Chicago has no intention of expanding to other cities, its model may be instructive to fledging news operations nationwide as they attempt to pursue aggressive hyperlocal journalism within a sustainable business model.
“Block Club is one of the most successful local digital news startups in the nation in the last five years and there are lessons to be learned in its growth,” said Tim Franklin, the senior associate dean and John M. Mutz Chair in Local News at the Medill School of Journalism, Media, Integrated Marketing Communications. “First and foremost, Block Club understands its audience and listens to its readers, and it’s been very disciplined about staying laser-focused on serving their needs and interests. Block Club is not trying to be the (Chicago) Sun-Times or the Tribune. It’s figured out how to fill a void in the market covering unique, hyperlocal news across the city.
“And, importantly, the leadership team there has been entrepreneurial in building its business model — a diversified mix of crowdfunding, reader revenue, advertising, merchandise and philanthropy. They’ve built a journalistic and financial model with legs, and one that could be replicated elsewhere, especially in densely populated urban areas.”
As Block Club approached the day it surpassed DNAinfo’s lifespan, I spoke with Lulay about the five years that have passed and the five years yet to come for this thriving local newsroom. Our conversation is edited for clarity and brevity.
Mark Caro: Where is Block Club compared to where DNAinfo was at this point in its life?
Stephanie Lulay: Today we have 29 full-time staffers working here. Compared to DNA, it’s a little difficult to count, because DNA had a huge business staff. They had an advertising person in every single neighborhood. That was part of the model, that for every neighborhood reporter, there would also be an advertising rep. Obviously, that model wasn’t successful. So DNA staff might have been larger than ours, but it was also distributed differently.
Caro: You all built this from scratch. What did you want to do that you did at DNAinfo, and what did you want to do differently?
Lulay: After we all got laid off, (our readers) were the ones who came on social media to say, “You know, no one else covered my neighborhood like this. You guys gave me this hyperlocal look at my neighborhood that nobody else could write.” So the thing we wanted to do the same (as DNAinfo) was to be looking at the city through the lens of the neighborhoods, be distributing reporters by embedding them in neighborhoods.
The thing that we knew we wanted to do differently from the jump also, thankfully, came from our readers. The back half of what they said to us was, “I would have paid for this if you just would have asked me.” And that was like a lightbulb to us. DNAinfo, famously owned by billionaire Joe Ricketts, was a free site, and the revenue model was based off of advertising. The goal was to sell advertising, like a lot of publishers.
We’re a nonprofit. We knew if this was going to work, we’d have to rely on our readers. We’d have to get buy-in from them, and they’d have to believe in this. I would say the biggest change up front was that we asked our readers for help. We are a subscription-based site.
But all of our South and West Side coverage is free. All of our breaking news is free, all of our election coverage, all of our public health reporting, anything that’s to do with COVID. When you add up everything, that’s a lot of free at Block Club. And because of it, we like to call ourselves a “freemium” site. A lot of our content is free, and a smaller amount is paywalled, and within that paywall, you get to read five of those stories before you’re asked to help us.
But all that said, we knew that our readers would have to pitch in. They did, right away. We launched a Kickstarter (campaign) the day that we announced. I remember the three of us — (Block Club co-executive editor/co-founder) Jen (Sabella), (publisher/co-founder) Shamus (Toomey) and I — spiritedly debating what our goal should be because on Kickstarter you have to hit your goal to get the money. We made our goal $25,000, and we hit that within a couple of hours. I think by the end of the first day, we’d raised $100,000; it went really fast, like people very much believed in this. By the end of the campaign, we raised $183,000. We broke a Kickstarter record. And we pre-sold subscriptions.
I think back then it was $50, and you got a tote bag. It’s pretty similar to what you get now: Our tiers are $59 a year or $6 a month, discounted various times of the year but not deeply discounted. We’re not going to (make it) $1 for your first year and kick you up to $100 in the second year. We want to be very transparent about what you’re going to pay and what you get for it.
Caro: What’s the balance between the philanthropic support you receive versus reader support?
Lulay: A year ago 70% of our funding either came from subscriptions or small-scale donations from readers. Because some philanthropic foundations have seen the tremendous support that we’ve gotten from our readers, they’ve invested in us. We’re very grateful for that support. So our revenue pie in the short term has kind of flipped. Today about a third of our revenue is coming from readers, and like 60% is coming from foundation grants. And then the balance of that is about 5% from advertising and 5% from donations.
That 60% coming from foundation support right now is because we got two large grants. One is from the American Journalism Project to supercharge our business side. Before we got this grant from them — it’s a $1.6 million grant over three years — we had one staffer, apart from Jen, Shamus and I, that was focused on revenue. The American Journalism Project has helped seed newsrooms all over the country. They really believe if you invest in this business side, it will pay off in dividends. And we’re already seeing evidence of that.
That’s helped us bring on five revenue-focused staffers, people who are focused on diverse revenue streams, supercharging our advertising arm, our memberships, corporate sponsorships …
Then the other half of that, something I’m very excited about, McCormick (Foundation) invested $1.6 million to launch an investigative team here. That’s $1.6 million over three years. That’s such a drastic change in a year.
Caro: For the investigative team, what does that get put into? Salaries? Other resources?
Lulay: Almost entirely salaries. Despite being very small and scrappy, we broke some huge investigative stories. We got those stories because we invested in putting a reporter in neighborhoods. That reporter shows up every day, builds connections. McCormick saw that us making that kind of neighborhood ground-level connection with people pays off when it comes to these investigative stories, so this investment from them is really focused on investigative reporting on the South and West Sides.
There’s so much good investigative reporting that gets done in our city, but not a lot of it starts from that block or neighborhood level. A lot of it is focused on City Hall or Springfield (the state capital) or the places where power comes together. We’re flipping that on its head in a way. Nobody was watching what Loretto (Hospital) was doing. It wasn’t something that reporters were looking at day to day. Because of that they were able to take advantage of people and funnel all these vaccines to Trump Tower. You know the rest.
There will be two editors and three reporters on that team dedicated to investigations here, which is super exciting. And our neighborhood reporters are very excited about it. That’s a big thing, too. Investigative teams historically have been siloed from the rest of the newsroom. We want them to really be working together with our neighborhood reporters to be finding these investigations on the ground, and then building them together.
Caro: Are those grants three years and then, boom, they go away, or is there a renewable element?
Lulay: The AJP grant is just three years. The goal is that those positions would be more than self-sustaining, to make these revenues higher. There is an option to renew with the McCormick grant.
Caro: Even with some newsrooms shrinking, there seems to be widespread agreement on the importance of investigative and watchdog reporting, with ProPublica and other outlets pursuing this work. Is your feeling the more the merrier because there’s plenty to investigate?
Lulay: Yeah, 100%. When you become a nonprofit, a big thing that’s different is we’ve collaborated a lot with other newsrooms. I don’t want to say the competition disappears. It doesn’t. But you realize how much more we could be doing together, comparing notes and saying, “Hey, we’re both working on this. If we split up the story, can we dig into more angles?”
It’s just so different than the worlds of the Trib and Sun-Times and “We’re gonna beat each other on scoops.” I could not be a bigger fan of what’s happening in the city in terms of collaboration. You can just approach somebody and work with them. How exciting is that?
Caro: If you really go back, Chicago is where Ben Hecht and Charles MacArthur’s “The Front Page” (a Broadway play with several movie versions) was set, and the whole basis is these cutthroat Chicago reporters jumping over each other to get the scoop. The given was that these papers would be so totally ruthless in trying to beat each other, so that notion that collaboration is now in the DNA, so to speak, of a lot of these organizations is a pretty big change for Chicago journalism.
Lulay: Yeah, I think it’s been a huge change but also a very natural one. All reporters are competitive. I’m a very competitive person. It’s in our nature. But I think that reporters also want to work together and they don’t see that as always having to exist within the confines of your newsroom.
Caro: Other organizations, such as Patch, have come in and said they’re going to do neighborhood news. Why has Block Club succeeded where some of the others haven’t?
Lulay: With those places everything is about “What can we scale?” and “How can we do more with less?’” Those Patch sites were sites run by one person doing everything, and that’s not the case here. Our model does mean that one reporter is covering a few neighborhoods, but that’s manageable.
The other big difference I would say is Block Club is run and founded by journalists, and key to our mission is serving our neighbors. That’s so important to me. Our reporters, they work in service to their neighbors. I do think the little distinction of being a journalist makes a huge difference. We’re looking at everything through a different lens.
Caro: How much do you all look at metrics and clicks to see what kinds of stories do well? Do you say, “We should cover more of the stuff that gets more clicks’” Or do you say, “You know what? Some of this stuff gets more clicks, but we think this other stuff is more important?”
Lulay: There’s less of an emphasis on it than there was at DNA to be sure. Now that doesn’t mean that we don’t look at Chartbeat, because we do. But yeah, there’s less of an emphasis. At the end of the day, our greatest measure of success is earning the support of our readers. What might earn that support for one reader is going to be very different than another reader. For some of our readers, that might be a big investigation, or some of our readers might support us because we break stories first. But for other readers it might be because we’re covering something that’s going on at their kids’ school that maybe doesn’t have a big interest citywide. Certainly traffic is important, but we look at it, I would say, differently and from a more holistic view. At the end of the day, our biggest metric is the support and trust of our readers, which we can measure, right? Because we know how many people support us.
Caro: What is it that you haven’t been able to do yet that you want to be able to do?
Lulay: There are two big, thick goals that we have coming down the pipeline that are very important to us, apart from the investigative team and building up the business side. (One is) filling in our neighborhood gaps that we haven’t yet. We’ve expanded quite a bit from that first year when we were covering just a handful of neighborhoods, but there are a few small pockets left, where we don’t have regular full-time dedicated neighborhood coverage, so we’d like to fill in those gaps.
The other big priority — and this is something that some foundations are investing in here — is we aim to build out an arts-and-culture-focused wing. We’re hiring an arts and culture editor right now to lead the effort. Arts and culture coverage in our city has been decimated, and we want to invest in it. We think it’s important.
Caro: At what point do you decide that something is beyond what Block Club wants its focus to be?
Lulay: One thing that we get asked a lot is “Are you going to expand to other cities?” Our answer is always our priority is Chicago. The reason that we call this Block Club is because block clubs mean something here in Chicago — and Detroit and Milwaukee, but Block Club Tallahassee wouldn’t mean something there. This is built by Chicago journalists, and it works here. We don’t think you can import good hyperlocal journalism. We have been asked about perhaps expanding to some nearby suburbs, and I wouldn’t say no to that if there is interest and it made sense for us and for readers.
Caro: To go back to the Loretto Hospital story: Aside from having a big impact and attracting foundation interest in what you’re doing, did that story move the needle for Block Club in terms of readers coming to the site and realizing the kind of journalism you’re doing? And were there any other stories that also did that?
Lulay: Certainly Loretto did. That was a story that the Washington Post followed us on, and others. I would say that was a game-changing moment. Believe it or not, I would say the breaking news about an alligator found in a lagoon that became the story of the summer (of 2019) also was a game-changing moment for us. Not only were people coming back to us for all of the updates, but Jen and I made a decision early on — like when that Gator Watch was really trending — we approached a local artist and said, “What if we make a Gator Watch T-shirt? What if we do this right?”
An artist, Ryan Duggan, made us a Gator Watch T-shirt, and by 4 p.m. that day we blasted out an email to our readers selling it. We ended up selling thousands of those T-shirts. We made $100,000 in revenue off of them. So I think we also realized the power of a viral story. We also sold merch related to Monty and Rose, the piping plovers that people fell in love with up on Montrose Beach. We made “Chicago Is for Lovebirds” merch with them on it. It’s also very successful. I think we learned the power of a viral story and how our newsroom could capitalize on people’s excitement for it, how to translate that back into revenue that would support the reporters ultimately who are breaking this news in creative ways.
Caro: When you say Loretto was the game-changer, what changed?
Lulay: I always knew that our newsroom was doing hard-hitting, important, impactful watchdog-type work. But I think it changed the perception of Block Club in some of the eyes of perhaps the media elite in Chicago. I think they took us more seriously. Not that that matters to me. It doesn’t.
Caro: For the next five years, what do you think is Block Club’s biggest challenge?
Lulay: The biggest challenge, I think, for any newsroom — and always the one that’s on the forefront of my mind — is sustainability. We started this because we all got laid off from a job at the same exact time, and our newsroom was shuttered, and our work disappeared overnight. We never want that to happen again. That was the challenge five years ago. That’s the challenge today. That’s the challenge five, 10 years from now as we grow, to just do it as sustainably as possible.
Caro: When we talk again 10 years into Block Club’s existence, what do you want to look back on having accomplished?
Lulay: My biggest goal as we continue to grow is that we don’t lose the scrappy, tight-knit feel that made us special. And in that scrappy, tight-knit feel, I want our staff to continue to be proud of the work that they’re doing here and proud of the newsroom that we’re building together.
Caro: Do you want Block Club to become a more dominant news source in Chicago? Does that matter, or is it more important to be sustainable, to do what you do and maybe do more of it?
Lulay: I want that if that’s what our readers want for us — because that’s ultimately everything. We can’t go wrong if our mission and focus stay true to what our readers want. They give us the money; we don’t exist if they’re not going to give us the money. That’s the truth.