The Limits of Nonprofit Pixie Dust: A Searing Critique of the Philly News Deal

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Pixie-dust

snow pixie dust / frankieleon

January 21, 2016; Nieman Lab

Boy, are we ever happy that we did not wax on enthusiastically about the new nonprofit-ish setup for the Philadelphia Media Network, now in a confusing relationship with the Philadelphia Foundation and an institute that looks to be something of a fundraising arm. Frankly, if that setup was the answer, we’re not sure what the question was. But yesterday, on the Neiman Lab website, Ken Doctor, the author of Newsonomics: Twelve New Trends That Will Shape the News You Get, took the situation on in some detail and without much mercy.

After comparing recent cost savings that have been gleaned from the layoff of 46 journalists, to the estimated $1.2 million dollar interest payment that could be estimated to come from Lenfest’s $20 million investment/gift, Doctor concludes that the drawdown might possibly allow the news operation to add back one-third of those reporters. Lenfest and the Philadelphia Foundation are counting on raising money from others to match Lenfest’s philanthropic plug. But who, he asks, is going to want to cover the basic ongoing operating costs of a failing business model?

And then he winds up to close:

Scratch away the restructuring, and those owning the Philadelphia papers are plainly saying that they don’t have a big vision or plan for the future. That’s a problem. That vision isn’t likely to come from an institute or even lessons learned from any number of well-deployed journalism projects, both of which would be good things.

Sprinkling on some nonprofit pixie dust won’t save the newspaper industry. Only new ideas can do that. I have no doubt that the new institute will invest whatever funds it has in some good, small programs or notions. The institute’s board of journalist/academics brings the highest credibility to the task, and the foundation wants to do the right thing. Let’s remember, though, that hundreds of millions in foundation funding, led by funders such as the Knight, has failed to slow the inexorable decline of American daily journalism.

And finishes with:

Spoiler alert: The future is already here, and it’s called the Internet. There are now thousands of people—though mainly working outside of newspapers, companies that have so discouraged the inside innovators with red tape, blue-penciled budgets, and white flags of surrender—who have mastered the digital arts of innovative products, viral distribution, and, yes, emerging business models that produce new streams of income. There just aren’t enough of them working in places like Philadelphia’s daily papers.

Though we would perhaps not be quite so damning ourselves, we can’t help but think that he is in large part on the mark with his concerns about the lack of specific ideas and strategies we see from some of even the most well-funded nonprofit news startups and conversions.—Ruth McCambridge

Correction: This article has been altered from its initial form. The amount of Lenfest’s initial endowment was $20 million dollars.  NPQ regrets the error.