The most unusual San Diego startup is The Watchdog Institute, an independent nonprofit local investigative reporting project based on the campus of San Diego State University. Lorie Hearn, who was a senior editor at the Union-Tribune, persuaded her former newspaper’s new owner, Platinum Equity, to contribute money to the startup so that Hearn could hire investigative reporters who had worked for her at the Union-Tribune. In return, Hearn will provide the newspaper with investigative stories at a cost lower than if Hearn and the other Watchdog Institute journalists were still on its payroll. She intends to seek more local media partners, along with philanthropic donations, while training San Diego State journalism students to help with the reporting.

There are other examples of local-news startups around the country. The nonprofit Web site St. Louis Beacon, launched by Margaret Freivogel and a dozen of her colleagues who were bought out or laid off by the venerable St. Louis Post-Dispatch, does in-depth reporting and analysis in targeted “areas of concentration,” including the local economy, politics, race relations, education, health, and the arts. Freivogel’s budget of just under $1 million comes primarily from foundations and local donors, advertisers, and corporate sponsors. In Minneapolis, the nonprofit MinnPost Web site relies on a mix of full-time, part-time, contract, and freelance journalists for the site’s news reporting, commentary, and blogs. Editor Joel Kramer’s budget of more than $1 million a year includes foundation grants and a significant amount of advertising.

Some of the startups are experimenting with what is being called “pro-am” journalism—professionals and amateurs working together over the Internet. This includes, for example, ProPublica, the nation’s largest startup nonprofit news organization with three-dozen investigative reporters and editors. Amanda Michel, its director of distributed reporting, recruited a network of volunteer citizen reporters to monitor progress on a sample of 510 of the six thousand projects approved for federal stimulus money around the country. “We recruited people who know about contracts,” Michel said. “We need a definable culture” of people with expertise on targeted subjects, “not just everybody.”

Much smaller local and regional Web sites founded by professional journalists—ranging from the for-profit New West network of Web sites in Montana and neighboring states to the nonprofit New Haven Independent in Connecticut—regularly supplement reporting by their relatively tiny staffs with contributions from freelancers, bloggers, and readers. The fast-increasing number of blog-like hyperlocal neighborhood news sites across the country depend even more heavily for their news reporting on freelancers and citizen contributors that is edited by professional journalists. In Seattle, among the most Internet-oriented metropolitan areas in the country, pro-am neighborhood news sites are proliferating.

“The folks that used to do things for a paycheck are now doing them for cheap or for free,” she said. “Somebody has to get these reporters back to work again.”

“We believe this could become the next-generation news source” in American cities, said Cory Bergman, who started Next Door Media, a group of sites in five connecting Seattle neighborhoods. “The challenge is to create a viable economic model.” Bergman and his wife Kate devised a franchise model, in which the editor of each site, a professional journalist, reports news of the neighborhood and curates text, photo, and video contributions from residents. Editors earn a percentage of their site’s advertising revenue.

Several affluent suburban New Jersey towns outside New York City also have become test tubes for these kinds of hyperlocal news Web sites, some of which have been launched by big news organizations experimenting with low-cost local newsgathering. At the state level, other new, nonprofit news organizations are trying to help fill the gap left when cost-cutting newspapers pulled reporters out of state capitals. The Center for Investigative Reporting, a three-decade-old Berkeley-based nonprofit that had long produced award-winning national stories for newspapers and television, has started California Watch with foundation funding to scrutinize that state’s government, publishing its reporting in dozens of news media throughout California and on its own Web site.

Leonard Downie Jr. and Michael Schudson are the authors of "The Reconstruction of American Journalism." Leonard Downie Jr. is vice president at large and former executive editor of The Washington Post and Weil Family Professor of Journalism at Arizona State University's Walter Cronkite School of Journalism and Mass Communication. Michael Schudson is a professor of communication at Columbia University's Graduate School of Journalism.