Beyond the journalism itself, Mission & State has struggled a bit with a question all nonprofit news start-ups must answer: How will the site’s work be distributed? At least initially, the site was expected to produce long-form enterprise journalism that other outlets were not providing, and then share the articles for free or at fairly low cost. It’s a model that larger news nonprofits like ProPublica, the Center for Investigative Reporting, and the Texas Tribune have had success with.

But Santa Barbara is a small city that can feel (and behave) like a small town, and so far, Santa Barbara’s larger news outlets and the journalistic newcomer do not seem to be playing well together.

Donnelly says that the model used by news nonprofits that serve statewide or national markets full of potential news partners doesn’t really apply to Santa Barbara, where there are limited partnership opportunities. Although he’s open to the possibility, Donnelly says he doesn’t see attempts to share stories with the News-Press as likely to have much chance of success, given the history of the founding of Mission & State. (Emails to News-Press officials seeking an interview went unanswered.) And so far, discussions with the weekly Independent have been cordial but unproductive. “We just haven’t found anything yet that makes sense,” Donnelly says.

Independent Editor in Chief Marianne Partridge says that she and Donnelly have lunched, but “I’m not yet clear on what their actual mission is.” She says she has asked her staff to let her know if they see something on the Mission & State site that would work for the Independent. “At this point, it is not useful to us,” she says. “But it may be [in the future].”

Hap Freund was among the original organizers of the effort that became Mission & State and is on the site’s advisory board. When asked about collaboration, Freund chuckled, noting that “it’s not a one way street. You have to have someone who wants to collaborate with you.”

If the distribution situation remains fluid, Mission & State appears to be on reasonably firm financial ground. Freund says he doesn’t foresee a problem in finalizing the $250,000 in local matching funds for the 2014 installment of the Knight grant. Thereafter, he says, the goal will be to increase community support to take the place of an anticipated decline in foundation support. “We have over a year to make that case,” he says.

With its cadre of billionaire and multimillionaire philanthropists, stunning seaside beauty, and contentious journalistic history, Santa Barbara is hardly a typical small media market. But the Mission & State story does provide a takeaway for others interested in creating a nonprofit news organization of modest size: Persistence pays. Correspondent Melinda Burns, a former News-Press writer who spearheaded much of the effort to create a news nonprofit in Santa Barbara, notes that she and four other Santa Barbara journalists worked for two and a half years to get local foundation support for a Santa Barbara news nonprofit—only to have local philanthropists reject their proposal and tell them to come back with the “bigger idea” that is only now taking shape as Mission & State.

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John Mecklin is the California and Nevada correspondent for the United States Project, CJR's politics and policy desk. He is the deputy editor of the Bulletin of the Atomic Scientists. Follow him on Twitter @meckdevil.