In March, Senator Ben Cardin (D-MD) introduced the Newspaper Revitalization Act, which would allow daily newspapers under certain circumstances to become federally tax-exempt 501(c)(3) nonprofits.
Perhaps he was concerned by floundering newspapers in Baltimore–the Examiner which has gone under and the Sun whose parent company, the Tribune Corporation, has filed for bankruptcy protection.
Is the nonprofit sector going to be the salvation of the U.S. newspaper industry? Is it possible that tomorrow’s Charles Foster Kane will find himself running a public charity and asking foundations for grants and loans? Will local nonprofits soon find themselves competing with entities named Times, Post, and Daily News for foundation largesse?
Nonprofit Newspapers in Our Midst
Nonprofit ownership of news outlets is not new, though it is rare in the high-powered world of U.S. mass media.
For many years, the St. Petersburg Times—and the national magazines Congressional Quarterly and Governing—have been owned by a for-profit publishing company, but all of the earnings of the company (after taxes) go to support the nonprofit Poynter Institute. In essence, the nonprofit Poynter owns those for-profit newspapers and magazines. In July, the Times Publishing Company sold Congressional Quarterly to the for-profit political journal, Roll Call (owned by the Economist Group), though still retaining Florida Trend, several community weeklies, and the Times.
Similarly, the Christian Science Monitor is owned and published by the Christian Science church, formally known First Church of Christ, Scientist in Boston, Massachusetts. However, despite 100 years of Church support, the Monitor has had its own difficulties, recently dropping its daily print edition in favor of just a weekend-only print edition plus a daily online paper.
Small but Growing Nonprofit Newspaper Outlets
There are already increasing examples of nonprofit-run and-financed news outlets filling in some of the gaps of declining coverage by mainstream newspapers, though most are tiny:
Minnpost.com is a nonprofit online journal publishing five days a week run by Joel Kramer, the former editor and publisher of the Star Tribune in the Twin Cities area. According to the Minnpost Website, Minnpost started in 2007 with $850,000 from four families supplemented by foundation grants from the John S. and James L. Knight Foundation, the Blandin Foundation, the McKnight Foundation, the Minneapolis Foundation, and the Otto Bremer Foundation. The Minnpost business model relies on corporate and foundation sponsors, advertising, and members who make annual contributions. As of October 15th, Minnpost had 1,500 member-donors contributing between $10 and $20,000 apiece annually.
Voiceofsandiego.org got its initial funding from Buzz Woolley, a retired San Diego-area venture capitalist (and father of Forbes Los Angeles bureau chief Scott Woolley), who co-founded the online venture with former San Diego Times-Union columnist Neil Morgan. Like Minnpost, Voice turns to member-donors (the website counts 982 at the moment) and an occasional foundation (the Knight Foundation, for example) for much of its $1 million operating budget supporting a staff of 12.
After the St. Louis Post-Dispatch bought out the contracts of a number of editors and writers, several joined together to found The Platform which eventually became the St. Louis Beacon. The online Beacon raised $1 million to get going and got a pledge of an additional $500,000 from Pulitzer family scion Emily Rauh Pulitzer if the venture can raise another $1.5 million (the traditional “challenge grant” model of public television fundraising, in a way).
The Chi-Town Daily (ChiTownDailyNews.org) was started as an online nonprofit three years ago, like the others with member, corporate, and foundation support (notably again the Knight Foundation plus the Ethics and Excellence in Journalism Foundation and the Abra Prentice Foundation). An intriguing part of the model was the combination of professional “seasoned beat reporters” with a network of 70 trained volunteer reporters (the aim is to get four to six volunteer reporters for each of Chicago’s 77 neighborhoods).
However, in September, the Chi-Town editors announced their intention to convert to a for-profit model. To do justice to effective coverage of news in Chicago neighborhoods, they suggested that they needed $1 million to $2 million a year, but last year only raised $300,000 from charitable and philanthropic contributions, citing the recession but suggesting that the financial problem was more fundamental. According to a Q&A on the editor’s blog, “Foundations and major donors in Chicago have, for the most part, failed to support our work, as have local corporate sponsors. Of the $600,000 we raised over the past four years, all but 10 percent came from outside Chicago.”
In California, a very new venture is the Voice of OC (Orange County), launched with a $140,000 grant from the Orange County Employees Association. The rare species of a Democratic State Senator from Orange County (Joe Dunn) is the chair of the board and former Orange County Register investigative reporter Norberto Santana Jr. is slated to be the editor as Voice goes live, according to plans, by the end of this year.
Equally new is the announcement of San Francisco financier Warren Hellman of his plans to invest $5 million in an unnamed nonprofit news venture to generate Bay Area stories for media partners such as KQED public radio. Hellman says that his new nonprofit outlet will rely on both paid reporters and editors plus apparently volunteer contributions from 120 students at the University of California-Berkeley Graduate School of Journalism.
Austin venture capitalist John Thornton, editor-in-chief Even Smith (from the Texas Monthly) and managing editor Ross Ramsey (formerly owner and editor of the Texas Weekly) have announced their intentions to launch the Texas Tribune. According to the Tribune website, they have raised $3 million toward the $4 million necessary for a full-fledged launch.
Like the San Diego News Network and the Chi-Town successor, there are more small online outlets that look nonprofit but may not be.
As Denver’s Rocky Mountain News expired this past year, a new online venture, the Rocky Mountain Independent, emerged, with some News staff in key editing and reporting positions. Launched only this past July, the online RMI looks nonprofit but is actually for-profit, looking for subscribers (rather than members) to pay $4 a month for access to subscriber-only content and chats with RMI journalists. Before RMI, several News reporters and editors along with “three Denver entrepreneurs” created INDenverTimes, with the aim of recruiting 50,000 start-up subscribers. They got 3,000, but they’re publishing nonetheless, and appear to be no more nonprofit than RMI.
Nonprofit Investigative Journalism
Several nonprofit news-sites are specifically dedicated to investigative journalism rather than local or national news coverage.
Based in New York City, ProPublica was established in 2007 to generate investigative stories about misdeeds in government and business. The capital for the organization comes from a $10 million a year pledge from Herb and Marion Sandler, owners (until they sold to Wachovia) of the Golden West Financial savings and loan (the Sandlers reportedly pocketed $2.4 billion from the $26 billion sale to Wachovia) and longtime liberal Democratic campaign donors. The editor-in-chief is Paul Steigler, former Wall Street Journal managing editor. On the board of ProPublica are philanthropic powerhouses such as Rebecca Rimel of the Pew Charitable Trusts and Alberto Ibarguen of the Knight Foundation.
ProPublica‘s investigative work is generally given for free to mainstream newspaper outlets such as the Associated Press, CNN, USA Today, Business Week, and Newsweek, among others. Recent controversy has emerged over revelations that Steiger’s 2008 salary at the nonprofit ProPublica was $570,000, and total compensation to the Stephen Engelberg, the managing editor, was reportedly $450,000 (only $325,000 in salary, the other $120,000 in relocation expenses).
Lacking the charitable largesse of the Sandlers, Investigative West (invw.org) focuses its investigative journalism on the Pacific Northwest and the West in general. Like other nonprofit outlets, there is a strong effort to access money through memberships ranging from student memberships at $30 and regular memberships at $60 to “watchdog club” memberships for $1,000 and “muckraker club” memberships at $5,000. According to Rita Hibbard, the INVW editor and former investigative journalist for the Seattle Post-Intelligencer, the first year’s budget of $1.3 million will hopefully be two-thirds funded by foundations and one-third through “content sales” and memberships, the foundation proportion to fall to one-third by year three.
Other investigative outlets are even newer and, compared to ProPublica, much smaller: the Rocky Mountain Investigative News Network (“I-News”), launched by Rocky Mountain News refugees, San Diego’s Watchdog Institute (established by Laurie Hearn of the San Diego Times-Union to initially provide all of its content exclusively to the T-U) and the Wisconsin Center for Investigative Journalism, whose WisconsinWatchdog.org provides investigative journalism content to public broadcasting journalists in six cities in the state.
On the board of the Wisconsin group is Chuck Lewis, former producer for CBS’s 60 Minutes and founder of one of the grandfathers of independent nonprofit investigative journalism outlets, the Washington DC-based Center for Public Integrity, now led by Bill Buzenberg, formerly with Minnesota Public Radio. Even older than CPI is California’s Center for Investigative Reporting, founded in 1977, and boasting a high caliber board of directors with the likes of Daniel Schorr, Judy Woodruff, Mike Wallace, Susan Stamberg, and Ben Bagdikian. Although nonprofit, the Huffington Post Investigative Fund, funded by Atlantic Philanthropies in large measure, is allied with the for-profit Huffington Post blog.
Both CIR and CPI—and ProPublica as well—are national models for nonprofit investigative journalism. I-News, WisconsinWatchdog.org, and INVW represent nonprofit efforts geared toward supporting nonprofit investigative journalism at the local or regional levels, likely to be given short shrift on the agendas of the bigger national IJ outlets.
Is the nonprofit approach an avenue for saving the future of newspapers? Will the Cardin/Maloney legislation achieve anything worthwhile toward bolstering the nonprofit option for U.S. newspapers? We take up those questions in Part II of this series, examining whether the future of the press might be nonprofit, sort of nonprofit, or neither of the two.