‘The Colorado Sun’ Goes Non-Profit

The Colorado Sun, one of the nation’s brighter spots in digital local news sustainability, has been a few things in its five years since launching.

First, it was an LLC backed with seed money from a (now defunct) cryptocurrency company. Then it became a for-profit public-benefit corporation. Then it got into the newspaper business by linking up with a string of two dozen print papers in the Denver suburbs. All along the way, its founders said they were open to doing whatever they thought was best for public service journalism and being whatever Colorado needed them to be.

Now, the outlet is converting into an entity its founders said might one day be a possibility.

“Today, we’re announcing that The Sun intends to chart a new course as a nonprofit news outlet,” Editor Larry Ryckman wrote this Sunday.

The move marks the latest in a recent rush of Colorado news organizations that have pivoted away from a for-profit business model. And the development is quite well-timed as the national philanthropic community that supports local news is joining forces to spend some serious cash and might look favorably on nonprofit newsrooms.

Earlier this month, a network of roughly two dozen big-money organizations led by the MacArthur Foundation joined an initiative called Press Forward and announced they would spend half a billion dollars to support local news and information over the next five years with a goal of doubling that figure in the future. The Sun being a nonprofit might put them (my opinion) in a better position to receive some of that largess.

Ryckman said the timing of The Sun’s announcement was coincidental — the outlet had planned its big reveal around its fifth anniversary — and acknowledged that being a nonprofit could open up some opportunities coming down the pike.

“There are some funders, some individuals, that won’t fund for-profit media outlets,” he said over the phone this week. “And it just didn’t make any sense to me or to us to have any doors closed that don’t have to be.”

He said that wasn’t the main reason for the change.

Explaining what a public benefit corporation is — a rarity in the local news scene — had been confusing, the Sun founder said. He called the nonprofit news model a “cleaner story” to tell. (Indeed, over the years I’ve heard people on journalism panels refer to The Sun as a nonprofit seemingly because they just assumed it was.)

Ryckman told me The Sun’s founders voted unanimously to go the nonprofit route and also that they all chose to donate their ownership stakes toward the new nonprofit.

“It underscores that this was the reason all along that we created The Sun. It was not to line our pockets,” he said. “We have put every penny that’s come to The Colorado Sun back into our journalism, which is how we’ve been able to grow.”

Because The Colorado Sun is The Colorado Sun, it apparently couldn’t just do the normal nonprofit newsroom thing, either. The outlet has applied for tax-exempt status from the IRS to become a “self-directed nonprofit,” Ryckman said, calling it a kind of structure that allows its employees to have more of a voice than it would with an outside board of directors who don’t work for the organization.

The Sun envisions an initial five-person board (it could grow) with three Sun employees on it and two from the outside. “We want a nonprofit that represents Colorado,” Ryckman said.

Those board members wouldn’t set their own salaries, he said, but would elect an executive committee that would, as well as handle employee reviews. In turn, those who sit on the board would set salaries of the executive committee and handle employment reviews for them as a check and balance.

“It allows employees to have a voice and a vote,” Ryckman said. “I believe the self-directed nonprofit structure really allows us to maintain that.”

The Sun also plans to bring in an outside auditor each year to ensure salary levels are in line with the industry market.

Asked whether the new nonprofit will fully disclose its donors, Ryckman committed to being “as transparent as we can possibly be.”