The local news site Chi-Town Daily News is abandoning its non-profit structure four years after launching, saying its business model is unsustainable.
"We've concluded that, as a nonprofit, we cannot raise the money we need to build a truly robust local news organization that provides comprehensive local coverage," editor and founder Geoff Dougherty wrote in a statement posted to the organization's web site.
The entire staff was laid off Thursday, Gapers Block and the A.V. Club report. Former Daily News reporter Peter Sachs, whose education coverage uncovered scandals at the City Colleges, told the A.V. Club that the staff would not be compensated for this week's work.
In his statement, Dougherty wrote that the editorial team is planning to launch a for-profit local news effort soon. The site, Dougherty wrote, requires between $1 million and $2 million a year to operate at its existing level. Last year he said it raised around $300,000 and prospects for this recession year looked even worse.
Dougherty had been an advocate for the non-profit journalism model and as recently as April the site was hailed by Washington Post media writer Howard Kurtz as "pioneering a new form of low-cost, street-level reporting."
Former reporter Fernando Diaz, who left the Daily News to work for the Tribune blog network ChicagoNow, defended the non-profit model and blamed a more common news business ailment for the original site's demise:
As with the majority of news organizations today, Chi-Town was undone by the management.