Abstract
Independent journalism faces converging pressures from media capture, volatile donor priorities, and platform-driven markets accelerated by generative AI. This article presents 5 years (2020–2025) of first-hand evidence from a donor-funded program to support journalism in Hungary that combined core funding, mentoring, and organizational development for independent local outlets. A longitudinal mixed-methods design disaggregates sustainability into money (revenue diversity, cash flow), management (absorptive capacity, governance, leadership), and market position (audience growth, brand trust, sales capability). Findings show that philanthropic funding is only conditionally conducive to sustainability under capture. Grants enabled survival, professionalization, and audience gains, but rarely produced durable revenue diversity in markets distorted by politicized state advertising, advertiser risk-aversion, and low willingness to pay for news. The program’s clearest contributions were transitional: financing operational and managerial upgrades, supporting product and audience experiments, and providing temporary insulation from hostile conditions. These gains materialized primarily where absorptive capacity and leadership were already strong. Donor-backed networking delivered only partial results, and abrupt donor exit exposed the fragility of post-grant trajectories. The overarching lesson is that donor intervention must be understood as a long-term investment in a difficult-to-visualize public good, namely democratic resistance and opposition, that yields indirect civic returns and, over time, creates the preconditions for tangible market and policy change. Anything less will fail to achieve meaningful or lasting impact.
Introduction
Across much of the world, the space for independent journalism is being reorganized by forces that journalists themselves often do not control.
First, media capture, the alignment of state power with business allies to shape ownership, regulation, and market incentives, has deepened, narrowing the room for critical reporting and distorting basic market signals. In such environments, access to officials is selectively rationed, public advertising is used as leverage, and regulatory discretion punishes dissent while rewarding loyalty (Dragomir, 2019; Schiffrin, 2021).
Second, the funding model for independent media remains unsettled. Traditional commercial revenues have eroded; philanthropic and development aid has filled part of the gap but has never constituted a stable system (Konieczna, 2022; Lincoln, 2025). Recent shocks, wars and humanitarian crises, shifting geopolitical priorities, and the resurgence of right-wing political projects, have intensified the uncertainty. Retrenchments and reallocations at major donors (e.g., cuts or constraints to USAID lines and increased spending on army and security responses) underscore how easily media support can be displaced by other priorities.
Third, the new wave of technology, especially generative AI, has lowered the cost of content production and accelerated a new type of reallocation of advertising toward platformized, data-rich intermediaries. As automated content proliferates and attention markets consolidate, the monetization prospects of small, independent newsrooms grow more precarious (Lewis et al., 2025; Shi and Sun, 2024).
Taken together, these trends sharpen an old question and make it newly urgent: how can independent media be supported and sustained under conditions that systematically disadvantage them? The corollary is even more disquieting: is there, in fact, a viable future for independent media in captured or hybrid systems where commercial revenues are depressed, institutional donors are volatile, and platform economics reward scale, not civic value?
This article aims to contribute to that debate with original, first-hand evidence gathered during the implementation of a journalism support program that ran for 5 years (2020–2025) in Hungary, a paradigmatic case of media capture in Central Europe. The program’s objectives were to improve financial viability, organizational resilience, and audience growth among independent outlets, while also testing whether targeted network-building could counter market distortions. Unlike short, skill-only interventions, the program combined core funding with mentoring and organizational development, providing a rare opportunity to observe how resources translate (or fail to translate) into capacity and outcomes over time.
The methodological design for the evaluation of the program, consisting of a longitudinal mixed-methods dataset (see Methodology) permitted a granular view of how independent outlets actually respond to resources, incentives, and constraints, not simply what they say in surveys or public statements. It also enabled disaggregation of “sustainability” into its working components: money (cash flow, revenue diversity), management (absorptive capacity, administrative competence, leadership), and market position (audience development, brand trust, and sales capabilities).
The article makes three contributions. Empirically, it reports on interventions whose results can be traced through verifiable outputs (e.g., hires, product launches, partnerships) and measurable outcomes (e.g., recurring donations, advertising sales). Analytically, it advances a distinction between funding volume and funding absorbability, showing that core grants generate impact only where managerial capacity can deploy them quickly and strategically. Practically, it derives implications for donors and implementers about the sequencing and composition of support: when to prioritize core funding versus business development, when to combine newsroom investments with operational hires, and when network-building is likely to stall without preconditions of trust, leadership, and shared goals.
While the project’s rich dataset supports numerous lines of inquiry, this article has chosen to tackle two research questions:
Is philanthropic funding in the media conducive to sustainability under conditions of media capture?
If not (or not directly), what does philanthropic funding actually achieve, through which mechanisms, on what timelines, and with what limits? We understand sustainability as a composite of financial viability (diversified, repeatable revenues), organizational resilience (governance, processes, and absorption capacity), and audience development (loyalty, conversion, and product-market fit). We do not assume that philanthropy can or should replace markets; rather, we treat philanthropic funding as a transitional or catalytic instrument whose effects depend on local political economy, platform dynamics, and the managerial choices of recipient organizations. Hungary is a particularly difficult environment for independent journalists: state advertising favors pro-government outlets; municipalities and state-owned enterprises act as gatekeepers; private advertisers often avoid independent media; and political rhetoric delegitimizes foreign-funded journalism (Nemeth, 2024). If philanthropic support can produce durable gains here, it is reasonable to expect equal or greater gains in less distorted environments. On the other hand, failures in this context are instructive precisely because they reveal the limits of funding when the rules of the game are rigged. The timing of this study is consequential. As AI reshapes production costs and audience expectations, independent outlets face a strategic choice: compete on volume (a losing proposition against automated content and platform distribution) or differentiate on trust, local embeddedness, and service value, which are attributes that require upfront investment in operations, product, and community, not just more content. Meanwhile, growing donor volatility is likely to require grantees to build revenue diversity faster than before, even as market distortions slow the path to sales. The resulting tension, grow capacity now, monetize later, sits at the heart of philanthropic strategy and is visible in the cases analyzed here. Finally, there are some limits in the research that has inspired this article: a small cohort of media outlets in a single country and a politically specific moment. Yet those very limits enhance the study’s diagnostic value. The program’s design allows us to observe mechanisms, namely how core grants, mentoring, and network efforts interact with managerial capacity and market structure, rather than simply tallying outputs. The conclusions, we argue, travel beyond Hungary: they speak to what philanthropy can achieve, what it cannot, and what complementary policy changes (e.g., fair allocation of state advertising, platform transparency, protection from politicized regulation) are necessary if independent media are to endure, with or without philanthropy funding.
Media capture and journalism funding
The contemporary scholarship on media capture has moved beyond the classic censorship paradigm to describe a systemic reconfiguration of media ecosystems through the alignment of political power and allied business interests. The concept of media capture describes the progressive alignment of political power and business interests in order to control ownership, regulation, and market incentives in the media sector. In Hungary, this process has been continuous since 2010, when Fidesz’s electoral victory enabled the gradual consolidation of state–media alliances and, eventually, the full appropriation of the media sphere by government-linked actors. While early stages of capture involved selective co-optation of nominally independent outlets through advertising and regulatory pressure, the system has since evolved into an advanced, state-integrated form of control in which pro-government media effectively operate as extensions of political power rather than private intermediaries (Bajomi-Lázár, 2021; Bátorfy and Urbán, 2020; Schiffrin, 2021). This paper therefore treats Hungary as a paradigmatic case of consolidated capture, in which the state itself functions as the dominant media proprietor and market regulator, leaving minimal space for independent journalism.
Complementing the media-policy perspective, recent scholarship has examined the economics and systemic logic of capture in greater detail, highlighting how financial dependence, market distortions, and clientelistic control mechanisms shape both journalistic practice and audience behaviour. In the Hungarian context, these dynamics have been extensively analysed by Dragomir (2024), Bátorfy (2017), and Bajomi-Lázár (2021, 2024), who show how political and economic power converge to transform media institutions into instruments of influence while sustaining a façade of market pluralism.
Comparative analyses extend this account by mapping the multi-channel toolkit of capture: ownership consolidation via politically connected investors; regulatory discretion over licensing and mergers; selective enforcement of competition and media laws; and, crucially, the discretionary allocation of state advertising (Dragomir et al., 2025). These levers, individually less efficient in building control, become powerful in combination, allowing governments to reshape media structure without formal bans. Hungary figures prominently in this literature as a paradigmatic European case: public funds there are channeled to loyal outlets irrespective of audience performance, and formal safeguards often fail at the point of application, producing a market where independent news is placed at systematic disadvantage (Griffen, 2020).
Capture is not static either. It adapts to the platformized environment, appropriating digital tools and narratives while maintaining legacy instruments (e.g., politicized public broadcasters). The result is a hybrid regime in which “old tricks” (ownership, regulation, subsidies) are fused with “new tech,” amplifying the reach and efficiency of control. In such environments, establishing a working financing model for supporting independent journalism is an uphill battle (Dragomir & Horowitz, 2025).
Historically, journalism has relied on a few funding models to operate. In liberal market systems, the field is dominated by commercial media with limited direct state support; where public service media exist, they are expected to remain at arm’s-length from the government. Democratic corporatist systems combine robust public media and targeted subsidies with a commercial sector, while polarized pluralist (Mediterranean) systems historically feature stronger party-press linkages and politicized broadcasting. These models provide a baseline for understanding the menu of funding options (advertising, subscriptions/memberships, philanthropy, and public support) and their differing feasibility across contexts (Hallin and Mancini, 2004).
In liberal markets, a substantial literature documents the structural market failure of news, high positive externalities and low appropriability, arguing for public remedies beyond piecemeal innovation. Pickard, among others, calls for expanding public options and novel funding mechanisms (including taxing platforms), noting that the ad-based model is unlikely to recover at scale (Axios, 2024). There is also evidence that corroborates the limits of willingness to pay and the difficulty of converting occasional users into subscribers, especially for smaller outlets that lack brand power (Piechota, 2024). These pressures intensify as AI lowers content-production costs and platforms capture an ever larger share of digital advertising.
In captured environments, the same revenue menu exists on paper but operates under asymmetric conditions. State advertising is selectively deployed to crowd out independent outlets (Bátorfy and Urbán, 2020); private advertisers internalize political risk and avoid critical media; and municipalities or state-owned enterprises act as gatekeepers. The effect is to compress the commercial frontier for independent journalism and to push outlets toward nonmarket income, philanthropy, development aid, and small-donor giving, while simultaneously stigmatizing foreign-funded media in public discourse (Article 19 & Media Freedom Rapid Response, 2023). Hungary exemplifies how these dynamics convert routine business decisions (sales, procurement, partnerships) into political ones, blurring the line between market and state (Bajomi-Lázár, 2021).
As commercial revenues erode, philanthropy has become a crucial prop for public-interest journalism. The literature credits philanthropic support with underwriting investigative reporting, local accountability beats, and innovation in formats and audience work, particularly in nonprofit newsrooms (Lincoln, 2025). At the same time, scholars chart characteristic tensions: projectization and short grant cycles can impede organizational capacity-building; topic earmarks and measurement frameworks may subtly reshape editorial priorities; and application and reporting burdens strain small outlets with limited management. Benson’s widely cited analysis captures this double bind: foundations expect both civic impact and business sustainability, but their practices can pull newsrooms toward short-term outputs unless complemented by systemic policy support (Benson, 2017).
A complementary stream, rooted in fieldwork in the Global South, documents how concentrated donor markets can produce dependency and agenda setting, even absent overt interference. Schiffrin’s work argues for clearer norms around editorial independence and for diversified funding pools to mitigate power asymmetries between funders and grantees. Case studies also suggest that smaller newsrooms are often disadvantaged in philanthropic competitions that favor established organizations with development staff, potentially widening capacity gaps (Schiffrin, 2017).
At the same time, scholarship on nonprofit journalism’s organizational dynamics finds that durability hinges on governance, managerial competence, and a workable revenue mix. Nonprofits carve out civic value yet struggle to escape the constraints of the wider field without sustained investment in operations, product, and audience development, which are the very categories that grants do not always prioritize (Konieczna, 2018).
Finally, comparative policy research highlights the role of public media and targeted subsidies as complements to philanthropy. Where funding and governance safeguards are strong, public systems can supply essential coverage and stabilize the information ecology; where they are politicized, they risk becoming instruments of capture (Picard and Pickard, 2017). The lesson for philanthropy is strategic: grants are more likely to be catalytic where policy provides a level playing field, or at least does not tilt it against independents.
Yet, despite robust theorizing on capture and a growing body of work on nonprofit news, several gaps persist. One is longitudinal, mechanism-focused evidence on how philanthropic funding interacts with capture. Much scholarship offers cross-sectional snapshots (surveys, elite interviews, single-year case studies). Less is known about what grants actually do inside organizations over time, how they lead to hires, workflow changes, product development, sales capacity, or audience conversion, especially under hostile political-economic conditions like Hungary’s.
The second is the research about donor-backed collaboration as counter-capture. While we have clear documentation of state advertising and regulatory distortion, there is limited empirical work on whether donor-stimulated alliances (e.g., shared services, joint sales, content pools) can overcome trust and coordination problems in captured settings, and under what preconditions (leadership, governance, shared strategy).
This article addresses these gaps by bringing first-hand, five-year evidence from a real-world support program in a context of media capture. In doing so, the article extends the literature on philanthropic funding in the media, a domain rich in normative argument but thin in multi-year, mechanism-level evidence under capture, by grounding claims in the lived realities of independent outlets over a relatively long period.
Methodology
This article draws on materials and findings collected as part of a five-year media support program (2020–2025) implemented by the Media and Journalism Research Center (MJRC) with financial support from philanthropic organizations. The program was conducted in Hungary, a media-captured environment, where the government controls most mainstream outlets and maintains a restrictive attitude toward independent and critical media.
The program’s objectives were threefold: to strengthen financial viability, organizational resilience, and audience growth, while also encouraging collaborative initiatives among outlets selected according to criteria that ensured their editorial autonomy. The initiative was carried out in two phases. In the first, seven local outlets received initial grants and mentoring from the MJRC and a local NGO partner. In the second, three of these organizations were awarded larger grants and more extensive support, enabling them to take more substantial steps toward sustainability.
The program included a strong research and evaluation component that employed document analysis, direct observation, semi-structured interviews, online surveys, statistical data analysis, case studies, and longitudinal monitoring. Some research focused on the performance of the supported media outlets, while other work examined the broader context in which they operated, collecting data such as market statistics, audience demographics, and information about the wider political and economic conditions. By triangulating these methods, the project assessed the progress of individual grantees while also generating broader insights into the structural, financial, and political constraints shaping independent journalism in a hostile environment.
The monitoring framework combined several tools for systematic data collection. It included on-site visits to participating outlets, team interviews (each outlet took part in at least four in-depth interviews, while those in the second phase were interviewed seven times), and the review of narrative reports submitted by the supported media outlets between 2022 and 2025. Performance data were also gathered across multiple indicators, including audience growth, newsletter subscriptions, advertising revenues, donation levels, and staffing (Nemeth, 2024, 2025).
Some of the data collected in the program were consolidated into dedicated research reports produced for internal use. These include:
Grantee needs assessment
Between October 2023 and January 2024, MJRC carried out a needs assessment (Vajda, 2024) to identify the challenges and opportunities facing independent outlets and their networks. This assessment combined desk research (policy documents, media reports, statistical data, and academic literature), stakeholder mapping, and 29 semi-structured interviews with journalists, donors, implementing partners, and local experts. An online audience survey supplemented these qualitative findings with quantitative insights into media consumption and engagement patterns.
Financial sustainability study
A study on financial sustainability (Szakács, 2023) examined cultural expenditure and donation behaviors to understand households’ willingness to support cultural and media products. The research used document and statistical analysis of per capita cultural spending data from the Hungarian Central Statistical Office, examined allocations under the “1% law” (a legal provision enabling citizens to dedicate 1% of their personal income tax to a chosen NGO), and conducted platform analysis of crowdfunding activity.
Political economy analysis
A political economy study of 20 media companies (Vajda and Sitányi, 2025) placed the grantees within the wider operating environment. Combining financial data analysis with case study research, it mapped the relationship between political interference and financial performance, highlighting concrete forms of pressure exerted on critical outlets.
Overview of methods used in the project
Researcher roles and independence
The authors were directly involved in the program that forms the empirical basis of this article. One author served as the program head and the other as an independent evaluator, which provided unique access to first-hand data, internal documentation, and longitudinal observation that would otherwise be unavailable to external researchers. The funder explicitly authorized the collection and independent academic use of all research materials without any editorial oversight or influence. No additional funding was provided for the preparation of this article, and the analysis and conclusions presented here were developed entirely independently of the funder. While the dual role of practitioner-researcher can raise questions about potential conflicts of interest, the critical and, at times, harsh assessments contained in this study reflect the authors’ analytical independence and adherence to research ethics established from the outset of the project.
Ethical Considerations
Given the politically sensitive context in which this program was implemented, ensuring the safety and confidentiality of participating media organizations was a priority. For this reason, outlets are anonymized throughout the article and the names of local partners and funders are not disclosed. A coding system (e.g., Grantee 1, 2, etc.) is used consistently across the article. Sensitive data were stored securely, and all identifiers that could reveal location, ownership structures, or various affiliations were removed during analysis and reporting.
Overview of media outlets supported through the Media and Journalism Research Center program
Note. The grantees were defined based on their staff size, audience figures and financial performance as follows: Staff size (number of staff members, full-time employees (FTE) at the beginning of the project): Micro: 1-2 FTE; Small: 3-6 FTE; Medium: 7-14 FTE; Large: 15+ FTE; Audience (number of website users in 2021): Micro: below 400k; Small: 400k-1 m; Medium: 1m-5 m; Large: above 5m; Financial performance (annual revenues in the 2020 financial year, at the start of the project).
Findings
The first phase of the program contributed to audience growth across nearly all participating outlets. The training and advisory components of the program were tailored to the specific needs of grantees and deliberately designed to be low-burden, allowing outlets to balance participation with daily editorial responsibilities. Training provided by the local partner, including mentoring, consultancy, and networking, played a central role in organizational development. Fundraising training, in particular, not only enhanced financial capacity but also improved visibility, strengthened organizational identity, and facilitated useful professional connections.
Administrative simplicity and the use of Hungarian as the working language in the program further contributed to accessibility, especially for outlets with limited staff or no English proficiency. Grantees also valued the program’s flexibility. The relationship between the center that ran the program and grantees, characterized by trust and responsiveness, was consistently highlighted as a key enabling factor (Nemeth, 2024).
Yet, these achievements in advancing the sustainability of local independent media must be contextualized within the broader structural challenges of the Hungarian media environment. The captured media landscape poses severe obstacles to both editorial independence and financial viability.
Independent media, whether national or local, face systemic exclusion from access to state actors. Interviews with grantees and qualitative observations during the program revealed a pervasive pattern in which government officials and members of the ruling Fidesz party in Hungary routinely refused communication with non-aligned media, declining interviews and excluding them from press events, even when such events were nominally public. This trend persisted even in municipalities governed by opposition parties, suggesting a deeply entrenched culture of media exclusion (Nemeth, 2024).
The delegitimization of independent media has also intensified through discursive and institutional means. During the course of the project, state propaganda popularized the term dollármédia to brand foreign-funded news organizations as illegitimate or subversive. This narrative was institutionalized in early 2024 with the creation of the Sovereignty Protection Authority, an agency granted broad powers to investigate alleged “foreign interference” in democratic discourse. Within its first months of operation, the authority began targeting independent media organizations (Uitz, 2025).
The state’s dominant role in the advertising market further distorts the media environment. Public advertising is overwhelmingly allocated to pro-government outlets or pseudo-independent media that, while formally unaffiliated, avoid criticizing the government and echo official narratives. Independent outlets, by contrast, are systematically excluded from state advertising, regardless of audience reach or regional importance (Vajda, 2025a). Local municipalities, especially those controlled by the ruling party, and municipally owned companies rarely allocate advertising to independent media, while private companies often avoid doing so out of fear of retaliation. Several editors-in-chief recounted private conversations in which business leaders admitted they had received informal instructions not to advertise in independent outlets (Nemeth, 2024).
These practices were substantiated by a financial analysis of 20 Hungarian media companies, which confirmed earlier findings on state capture while providing new empirical evidence of the irrationality of advertising allocations compared to audience share and market performance. The results suggest that these practices are not only politically biased but also fiscally wasteful (Vajda and Sitányi, 2025).
Although the Covid-19 pandemic accelerated the shift toward digital news consumption, creating short-term opportunities for online-native outlets, this growth has since plateaued. Independent digital media continue to struggle to reach the financial threshold required for stable operations. They rely heavily on unpredictable income streams such as foreign grants, reader donations, and crowdfunding. Financial data reveal persistently weak profitability, low capitalization, and high vulnerability.
Attempts to scale operations through mergers or acquisitions, a common strategy in other media markets, are fraught with risk in Hungary. Historical precedent indicates that once independent outlets reach a certain market position, they become potential acquisition targets for pro-government conglomerates, often resulting in the loss of editorial independence.
Nevertheless, there are isolated cases that suggest an alternative path: cultivating a clearly defined readership niche and offering high-value journalism can attract private advertisers motivated by market logic rather than political alignment. While this path is not widely replicable, it demonstrates that under certain conditions, independent media can build business models less dependent on foreign donors (Vajda and Sitányi, 2025).
The broader economic crisis in Hungary has further exacerbated vulnerabilities in the independent media sector. Record-high inflation, among the worst in the European Union, sharply increased operational costs and created pressure to raise staff salaries despite limited financial flexibility (Nemeth, 2024). At the same time, the economic downturn contracted the advertising market, with companies reducing marketing expenditures and further shrinking commercial revenue streams for independent outlets.
The abrupt termination of the KATA scheme, a simplified flat-tax system in Hungary that helped lower fixed costs and reduced the administrative burden for self-employed, also destabilized conditions for freelance journalists in 2022. The policy change imposed higher tax burdens and reduced net income, deepening financial insecurity among media professionals (Nemeth, 2024). Simultaneously, Russia’s full-scale invasion of Ukraine and the resulting humanitarian crisis diverted philanthropic resources, particularly during Hungary’s annual 1% personal income tax donation campaign, which has traditionally been a crucial fundraising channel for nonprofit media.
Human resource shortages were another persistent obstacle. While some outlets needed reinforcements to sustain basic operations, others required specialized roles, such as sales managers or community coordinators, to support growth. Although the program had minimal administrative burdens, some outlets still struggled with compliance, including timely submission of reports, which was a requirement of the program, an indication of underlying organizational capacity issues that require ongoing support. Recruitment challenges were compounded by financial constraints, which limited the ability to offer competitive salaries. In smaller towns, political stigma surrounding independent media further discouraged potential applicants, with candidates fearing reputational damage or repercussions for family members employed in municipal institutions (Nemeth, 2024).
Over the course of the program, however, there was a noticeable shift in organizational attitudes toward non-editorial capacity building. Initially, some grantees prioritized content production and resisted investing in administrative or strategic roles. As the project advanced, most recognized that long-term sustainability required strengthening managerial and operational capacities. Outlets led by managers with business experience adapted more readily to this shift, while those led exclusively by journalists were slower to embrace restructuring.
Efforts to attract younger talent through internships were only partially successful. Grantees lacked sufficient funding and mentoring capacity to compete with opportunities in Budapest, Hungary’s capital city, or abroad. The absence of a clear career trajectory further undermined their ability to retain emerging professionals. Nevertheless, viable internship programs remain essential for cultivating young talent capable of engaging younger audiences and contributing to democratic discourse. Without targeted grant support, however, these outlets lack the financial and organizational resources to design competitive, long-term programs for entry-level applicants (Nemeth, 2024)
Audience development efforts were also constrained. Most grantees relied heavily on Facebook for traffic, leaving them vulnerable to platform-level algorithm changes. Meta’s 2023 decision to de-prioritize news content led to declines in daily visits. While several outlets experimented with alternative outreach strategies, such as newsletters and new presences on Instagram or TikTok, these initiatives remained in their early stages, hampered by limited capacity and the absence of dedicated social media staff.
The second phase of the program, where three outlets of the initial cohort were selected for a major financial boost, was guided by a dual strategy: (1) strengthening the operational infrastructure and market impact of selected outlets through substantially increased funding, and (2) generating innovative initiatives within a captured media system.
The program sought to determine whether larger-scale grants could enable recipient organizations to make significant progress toward financial and organizational sustainability. The main selection priority was the potential for capacity building rather than immediate journalistic output. Two of the three grantees received funding that exceeded their typical annual budgets, while the largest, Grantee 1, experienced a 40% budget increase attributable to the MJRC support. The overarching aim was to cultivate more resilient, financially viable news organizations capable of withstanding systemic political and economic pressures beyond the program’s duration.
Grantee 1, which already prior to the program was larger and more professionally managed than the other grantees, used the program to expand organizational openness and strengthen its networks. Operating on a substantially larger scale than its peers, Grantee 1 achieved all planned objectives. Strategic investments targeted digital capacity building, including the recruitment of a social media manager, development of audience-specific communication strategies, and the integration of AI into the content management system for moderation, automated posting, and quality control. Financial resilience efforts included hiring administrative support, launching a successful crowdfunding campaign, expanding audiovisual content, and securing a sales house partnership that boosted advertising revenue (Nemeth, 2025).
Grantee 2’s experience illustrates both the transformative potential and the persistent constraints of donor-funded capacity building for small local media in a heavily captured environment. Initially, management was ambivalent toward organizational change, privileging core journalistic output over structural diversification. Over time, however, increased engagement with audience research, mentoring, and targeted fundraising consultancy facilitated a recognition of the value of role diversification, professionalized campaign management, and reader-engagement mechanisms. These changes resulted in newsroom expansion, recruitment of younger journalists, and the institutionalization of an internship program. Hiring staff in operations and community coordination improved grant applications and supporter relations.
Despite these gains, significant challenges underscored the vulnerability of small newsrooms. While recurring micro-donations grew markedly in late 2024, audience revenue remained a fraction of the overall budget, far short of the strategic target of one-third of the total turnover. Heavy reliance on grants persisted, compounded by uncertainties in donor funding. Staff attrition raised concerns about sustaining audience relationships without dedicated capacity. This case reflects a paradox common across the sector: external funding enables rapid organizational growth, but without diversified revenue streams, those gains remain structurally fragile (Nemeth, 2025). Although many of these vulnerabilities mirror those faced by small digital outlets globally, the intensity of market distortion and donor dependence in Hungary’s captured media environment makes direct comparison difficult and falls beyond the scope of this article.
Grantee 3 demonstrated the interplay between rapid expansion, organizational restructuring, and persistent structural dependencies typical of small independent media. This interplay was visible in the way editorial growth and managerial reform advanced in parallel but at different speeds. Transitioning from a three-person operation to a newsroom of seven journalists plus freelancers, the outlet improved both content quality and audience reach. This expansion reinforced a key lesson: editorial capacity building must be paired with operational and managerial professionalization to ensure sustainability.
Mentoring and targeted skills development in fundraising, project management, and audience engagement were critical in helping the outlet’s management clarify the organization’s mission, streamline workflows, and formalize roles. The recruitment of a dedicated project manager and other staff changes were key moves, leading to improved editorial cohesion and stabilizing staff retention. Audience growth was driven not by tabloid-style content but by the credibility and local embeddedness of newly recruited journalists. While specific audience analytics for the embedded journalist’s contribution were unavailable, qualitative feedback from readers and mentors suggested that closer community presence strengthened local trust and visibility. The shift toward human-interest and socially relevant stories highlighted the benefits of aligning editorial output with audience demand. Yet, the outlet’s inability to fill coverage gaps, such as sports and neighboring towns, underscored the persistent difficulty of talent acquisition in small markets.
Financial diversification at Grantee 3 remained only partially realized. While advertising revenue increased modestly and community events strengthened reader loyalty, donor funding and grants continued to dominate the organization’s budget. Nonetheless, experiments with thematic events, newsletters, and prospective paywall models reflected a growing recognition that diversified income strategies require equally diversified brand-building efforts. Ultimately, Grantee 3’s trajectory demonstrated that donor-funded growth can yield significant professionalization and audience trust, but without sustained revenue diversity, such gains remain vulnerable to funding volatility in media environments affected by capture (Nemeth, 2025).
Discussion
The evaluation of the program that was the basis of this article underscores its critical relevance within Hungary’s captured media landscape. By addressing a fundamental and often unmet need, the financial and operational sustainability of independent local media, the program filled a significant gap in the donor ecosystem. Unlike many initiatives that focus narrowly on skill-building workshops, thematic training, or short-term content production, this program provided core funding and long-term mentoring. This design choice proved particularly valuable for small and local outlets, many of which struggle to secure even the basic resources necessary to sustain daily operations. Several grantees explicitly described the program as a “lifeline,” emphasizing its importance for survival under hostile political and economic conditions (Nemeth, 2024).
At the same time, the findings highlight the systemic barriers that prevent small, local news organizations from moving beyond donor dependency. The long-term viability of independent media depends on the development of diversified revenue portfolios, yet in Hungary this path remains severely constrained. Audience-based income generation through donation campaigns, subscriptions, or paywalls is limited by both cultural and structural factors. Only 8% of Hungarians report willingness to pay for news (Szakács, 2025), a figure far below European averages. Statistical data from the Hungarian Central Statistical Office (KSH) further reveal the low economic potential of local news markets: household expenditures overwhelmingly prioritize food, housing, and transport, with cultural spending ranking only sixth in rural areas and fifth in Budapest. Even within cultural expenditures, regional disparities are profound, with per capita spending in the capital nearly triple that in the northeast (Szakács, 2023). Moreover, the distribution of Hungary’s 1% tax donations confirms a persistent national preference for health and welfare causes, leaving independent media in a structurally disadvantaged fundraising position.
The program’s attempt to stimulate network-building among local media also yielded important lessons. The program supported a consortium led by Grantee 2 to facilitate joint content production and a consortium led by Grantee 1 aimed to institutionalize cooperation through the creation of an umbrella entity. While these initiatives produced some immediate outputs, such as regular meetings and limited collaborative reporting, they ultimately exposed deeper structural and relational deficits. Weak trust, leadership ambiguity, and the absence of shared strategic objectives prevented meaningful institutionalization of the network (Vajda, 2024). This outcome underscores the difficulty of building durable alliances in an environment where competition for scarce resources remains high and political polarization in the society undermines trust.
The second phase of the program reinforced these broader insights. On one hand, it demonstrated that large-scale grants can generate tangible improvements in professionalization, editorial capacity, and audience engagement. On the other, it confirmed the structural vulnerabilities of small, independent outlets in Hungary’s media ecosystem, where donor support remains an indispensable precondition for survival. Without the program, Grantee 2 and Grantee 3 would likely have continued their daily struggles, with little prospect of growth or impact. The political economy of Hungary’s media market, dominated by state capture of advertising, exclusionary practices by municipalities, and pervasive political stigmatization of independent journalism, makes the generation of sufficient commercial revenue virtually impossible.
From an economic perspective, the Hungarian case also suggests that the conventional logic of proportionally smaller funding for smaller markets may be misplaced. Given the combined impact of limited purchasing power, a compressed advertising market, and the state’s near-unlimited resources for sustaining its own media network, smaller and more distorted markets may in fact require disproportionately higher donor investment to achieve comparable outcomes. Financial data from the broader analysis of Hungarian media companies (Vajda and Sitányi, 2025) reinforce this pattern, showing that even efficiently managed independent outlets struggle to reach operational sustainability under these asymmetric conditions. Moreover, the apparent proliferation of small online outlets has created an oversaturated market that often fragments audiences and revenue opportunities. These observations call for deeper comparative research on the economic calibration of donor support in small and politically constrained markets.
Hence, a central lesson from the program is the importance of organizational capacity and managerial expertise in shaping the effectiveness of donor interventions. Both smaller grantees faced significant delays in implementation in the second phase, encountered difficulties deploying funds within the grant period, and struggled with compliance tasks despite the program’s intentionally light administrative burden. In contrast, Grantee 1, already possessing robust institutional structures and professional management, was able to absorb the grant efficiently and achieve all planned objectives in a compressed timeframe (Nemeth, 2025). This contrast illustrates that funding volume alone does not determine impact; absorptive capacity and pre-existing institutional maturity are decisive.
Equally important is the role of a business-oriented managerial mindset in encouraging and achieving resilience. The abrupt discontinuation of USAID’s Central Europe program in early 2025 severely undermined the financial stability of all grantees, yet their trajectories diverged sharply (Nemeth, 2025). Grantee 3, having invested in revenue diversification and community engagement during the project, entered this crisis in a comparatively stronger position. Grantee 2, by contrast, lacked entrepreneurial orientation and continued to rely heavily on donor funding, making it particularly vulnerable to renewed precarity, including the prospect of staff reductions. This divergence reinforces the conclusion that managerial approach, not funding alone, is the decisive factor in post-grant sustainability.
Taken together, these findings carry important implications for both media support policy and future donor strategies. First, core funding remains indispensable in captured media systems, where outlets struggle to cover even basic operational costs. Second, donor programs must balance financial support with deliberate investment in organizational and managerial capacity, including leadership training and business development. Finally, while donor support is essential, it should be complemented by efforts to mitigate structural distortions in the media market, particularly the state’s manipulation of advertising resources and delegitimization of independent outlets. In such constrained contexts, even the most resilient outlets remain partly subject to donor priorities and funding cycles, a dependency that raises broader questions about the long-term governance of media assistance. Yet, this discussion lies beyond the analytical scope of this article. Without addressing these broader political economy conditions, donor-funded gains, however valuable, will remain fragile and contingent.
A broader tension also emerges when situating these findings within wider debates on journalism assistance. Critics of donor funding have long noted that many grant programs emphasize short-term content production while neglecting the chronic need for operational support (salaries, infrastructure, or local distribution). Yet these mismatches are not simply the result of donor oversight. They stem equally from structural constraints within funding organizations themselves: limited budgets, short program cycles, and strategic priorities shaped by institutional mandates or managerial interests. These factors narrow the scope for flexible, long-term engagement, often compelling small or specialized outlets to adjust editorial agendas to fit available grants. As observed in related analyses of donor-funded media in Central Europe (Vajda, 2025b), such dynamics call for rethinking media assistance as a form of sustained institutional investment rather than transactional project support.
Conclusions
This study provides rare longitudinal evidence of how philanthropic funding interacts with independent journalism in a context of entrenched media capture. The Hungarian case shows that philanthropy, while indispensable, is not a straightforward path to sustainability. Instead, its contributions operate through specific mechanisms, unfold on uneven timelines, and are tightly constrained by structural distortions.
On whether philanthropic funding is conducive to sustainability under conditions of capture, the evidence points to a limited and conditional “yes.” Grants clearly enabled survival and even professional growth in outlets that otherwise would have remained stagnant or closed. Core support financed essential hires, technological upgrades, and experiments in audience engagement. Yet sustainability, understood as durable revenue diversity and organizational resilience, was rarely achieved. Audience willingness to pay remained structurally low, advertising markets were politically distorted, and donor cycles remained volatile. In other words, philanthropy prolonged life and created islands of innovation, but it did not, and perhaps could not, resolve the systemic exclusion of independent outlets from the market.
The answer to what philanthropic funding actually achieves emerges more clearly. Philanthropy enabled a set of transitional gains: capacity building, professionalization, and temporary insulation from hostile conditions. It financed operational staff who improved grant-writing and donor relations, created openings for younger journalists, and gave newsrooms time to experiment with crowdfunding, newsletters, and events. These efforts deepened community embeddedness and audience trust, even if they did not fully convert into revenue. At the same time, the program highlighted the importance of absorptive capacity: outlets with managerial competence and prior institutional maturity translated grants into durable improvements, while those with weaker leadership struggled to deploy resources effectively. Philanthropy therefore acts less as a universal remedy than as a catalyst whose impact depends on local organizational conditions.
The findings also illustrate philanthropy’s limits. Donor-backed collaboration was difficult to sustain amid low trust and political polarization. Network-building produced only partial outcomes, suggesting that alliances require long-term facilitation, shared goals, and structural incentives that were largely absent. Moreover, the abrupt withdrawal of major donor programs confirmed the sector’s vulnerability: outlets scaled up with external resources but could not maintain that scale once support ended. The harsh lesson is that in captured environments, donor-funded outlets may grow, but they seldom reach a stage where they can be “left alone” to survive. Many will shrink, transform, or close when grants expire.
That being said, donor intervention must be conceived as a long-term commitment rather than a short-term project. It should be understood as an investment in a commodity that is difficult to quantify yet profoundly significant: resistance and opposition. Supporting independent journalism in captured systems is not only about financing newsrooms but also about sustaining the very existence of counter-narratives and watchdog functions. This investment can generate indirect but tangible returns—strengthening civic culture, nurturing democratic resilience, and keeping open spaces for pluralism that authoritarian capture seeks to close. For certain donors, the reward lies precisely in sustaining these fragile but vital nodes of resistance, which, over longer horizons, may create conditions for systemic change and more palpable societal gains.
While this study focuses on a single program, the broader question of whether the dynamics observed here are specific to Hungary or reflect a wider pattern of donor dependence under political and market constraints remains open. A systematic comparison with other donor interventions, both within Hungary and across countries, would be a valuable next step, yet such data were beyond the scope and design of this case study. Future research comparing different national contexts could clarify whether Hungary represents an outlier or an extreme expression of more general structural vulnerabilities in donor-supported media.
For media and journalism funding, these insights imply a shift in strategy. Donors need to redefine what sustainability means under capture. Instead of expecting traditional revenue diversity, they should support context-specific forms of resilience: strong community ties, flexible organizational capacity, and adaptive leadership. Audience development, even if it cannot fully replace donor money, is vital as a source of legitimacy and partial revenue. Philanthropy must also acknowledge its transitional character, coupling support for journalism with advocacy for broader policy changes: fair distribution of state advertising, platform accountability, and protection from politicized regulation.
In sum, the study suggests that philanthropy can keep independent media alive and locally relevant in hostile environments, but not indefinitely self-sustaining. Its greatest value lies in creating temporary spaces of autonomy, strengthening civic ties, and buying time until broader structural reforms can rebalance the playing field. Thus, only when seen as a long-term investment in democratic resistance, donor intervention acquires its own intrinsic and strategic justification.
Footnotes
Declaration of conflicting interests
The authors declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.
Funding
The authors received no financial support for the research, authorship, and/or publication of this article.
