Philanthropists investing over $20 million to launch new Houston newsroom

Three Houston philanthropies are coming together to launch an independent nonprofit news operation in Houston, executives tell Axios.

Why it matters: Houston is the fourth-largest U.S. city by population and one of the most diverse places in the country. But local philanthropists argue its community is underserved by its current local news offerings, which are facing economic pressure.

Driving the news: The Houston Endowment, the Kinder Foundation and Arnold Ventures have put together a plan to launch the newsroom, following a two-year research effort, led by the American Journalism Project (AJP).

• After conducting months of focus groups and surveys in multiple languages, AJP found that one of the biggest challenges Houston residents face is navigating the complexities of Houston's government and community systems amid language and culture barriers.
• "The community says the want more accountability and they want their basic information needs met," said Sarabeth Berman, CEO of AJP. "We heard from many people that it's a complex city and they want to understand how to navigate it, which includes schools and the criminal justice system."
• "It's very hard to overestimate the complexity of the region," said Ann Stern, President and CEO of the Houston Endowment. "We were surprised at the extent to which rural and minority communities really felt the media wasn’t serving their needs and felt their need and lives were being misrepresented."

The newsroom will launch with about 40 people either late this year or early next year, per Berman.

• Backers will work with the new team to help build out a financial model that isn't solely reliant on philanthropy.
• Stern and Berman both stressed that the outlet would be editorially independent.

Be smart: "We want to meaningfully augment local news in the city. We're not trying to replace it, but to provide supplement coverage," said Berman.

By the numbers: The Houston Endowment is investing $7.5 million to jumpstart the effort, as is the Kinder Foundation. Arnold Ventures is investing $4 million. AJP and The Knight Foundation are investing $1.5 million and $250,000, respectively.

The big picture: "As the commercial model for newspapers is declining, we've seen a rise of nonprofit news," said Berman.

• The number of local news outlets that have registered as nonprofits has roughly doubled in the past five years, according to the Institute for Nonprofit News. 

What's next: A local search committee comprised of civic, business and nonprofit leaders will immediately begin work to conduct a public search for a chief executive and an editor-in-chief to lead the operation. The group has yet to name a board for the new outlet.