Thirty-three years after Mother Jones began as a nonprofit magazine, co-editor Monika Bauerlein jokes that "we're so out of date, we're hip."

She was referring to renewed interest in the San Francisco magazine's business model. As major daily newspapers, like the Seattle Post-Intelligencer, cease publication and others, like The Chronicle, plan extensive layoffs to cope with dwindling revenue, many in the news publishing world are exploring the nonprofit model.

But switching from a profit to nonprofit model isn't easy - at least on the mass-market scale of many publications. Two Yale scholars recently estimated that it would take a $5 billion endowment to maintain the estimated $200 million annual newsroom budget for the New York Times.

Starting a nonprofit publication brings its own challenges. While new online ventures like MinnPost.com - which covers Minnesota politics and government - have received positive reviews and industry buzz, the journalists running the $1.2 million operation say it is still very much an experiment.

This groping in the dark for solutions to journalism's funding problems reached a new peak last week when Robert McChesney, a University of Illinois professor and a political blogger, suggested in the Nation that the government offer a $200 yearly tax break to newspaper subscribers.

"[T]here is a significant question about whether the nonprofit model could supplant commercial ownership," read the annual State of the News Media 2009 report, released last week by the Pew Research Center's Project for Excellence in Journalism. "How many communities could muster the tens or hundreds of millions in nonprofit capital needed to buy a newspaper and similar amounts to absorb potential short-term losses and invest in improvements?"

In Mother Jones' case, going nonprofit was more of a philosophical choice than an economic necessity. In the wake of the Watergate scandal, a group of investors wanted to create an investigative publication that was less constrained by market and advertiser pressures. The ensuing three decades haven't always been easy for Mother Jones. But the magazine is poised to weather the current recession better than many other publications - and its journalism is thriving.

Last week, it was announced as a finalist for three National Magazine Awards, including one in the general excellence category and another for online journalism. Last year, it won in the general excellence category for its circulation category (it has 230,000 bimonthly subscribers).

The magazine is getting more mainstream buzz than it has in the past. Its Washington bureau chief, David Corn, is a regular commentator on MSNBC. On Saturday, Rachel Maddow - the Castro Valley native and rising star of her own MSNBC show - will headline a San Francisco fundraiser that is expected to raise $100,000 for Mother Jones. (The event is sold out.)

And now the magazine's leaders are fielding calls from industry peers interested in how a nonprofit model might work. Mother Jones met its financial goals in 2008, but its advertising revenue is down 14 percent in 2009 compared with the same period a year ago. But advertising is only 15 percent of Mother Jones' total revenue stream. Half of its funding comes from contributions, and 35 percent is from circulation. So far, reporters haven't been laid off, other than one whose work was funded by a grant.

"In times like this (the nonprofit model) has made us more resilient," said co-editor Clara Jeffery. "Not that there aren't hits, but if you're wholly dependent on advertising revenue right now, you're in trouble."

During the stewardship of Bauerlein and Jeffery over the past three years, Mother Jones has sought to remake itself journalistically. While its print product handles the long-term investigative pieces, news is regularly broken on its recently revamped Web site. To keep readers engaged, the Mother Jones editors talk a lot about creating a community around the publication. Take the comments section of Mother-Jones.com. In addition to reacting to an article, commenters also can tag their comment as a "proposed solution" (such as writing to a member of Congress) or as a "documented result" (such as a bill that was introduced). The goal is to give readers the tools to organize and continue to connect over an issue.

Another new feature on its Web site is an online tip jar. If you like a particular story, toss a few bucks in the jar. Its effectiveness is still too new to measure, but it is being closely watched by publications considering microcharging readers for the content they produce.

Replicating the nonprofit model would be challenging on a larger scale, said MinnPost.com Editor and CEO Joel Kramer.

"It would be extremely difficult to raise enough money from donors to support a large newsroom," said Kramer, who served as the Minneapolis Star Tribune's publisher for several years in the mid-1990s. MinnPost.com's budget is $1.2 million - about one-twentieth of the Star Tribune's when Kramer was there.

About 25 percent of MinnPost.com's revenue comes from advertising, and the rest is split between foundation grants and membership fees. Traffic to its Web site has been increasing (1 million page views and 300,000 unique visitors a month), and the site just hired a Washington, D.C., reporter - a former Los Angeles Times intern. The goal is to be self-sustaining by 2012.

But the site has its limitations. Whereas Kramer used to preside over a staff of 375 reporters at the Star-Tribune, now he has half a dozen editors, two staff reporters and a half- dozen others who are regular freelancers on a retainer. It's assumed that MinnPost.com's readers are reading a local paper, especially because there is little sports or entertainment coverage here.

"It is not meant to be comprehensive," Kramer said. "It's about quality, not quantity."