June 6, 2016; Current
Really, who knew that billionaire philanthropist Pierre Omidyar’s first media creation, Honolulu’s Civil Beat, was not a nonprofit? The site’s business model included subscriptions and a paywall, but while it did establish a broader sense of public ownership, that structure wasn’t a good one for reach and growth. So now the publication wants to change its model (which we all have done from time to time), but Civil Beat means to change its tax status as well.
Civil Beat wants to go to a membership model and tear down the paywall that has kept casual visitors (who potentially could be more regular visitors) out unless they paid the toll. They do say they hope that this will improve their reach, and we bet that is true. On the other hand, we find the rest of their explanation of the distinction a little confusing. Civil Beat has already enjoyed a heaping helping of one of the major benefits of being a nonprofit vs. a for-profit news site, in that it was bankrolled and continues to be supported by Omidyar. (After toying with the idea of buying the Washington Post, Omidyar also bankrolled First Look Media in 2013, a massive news initiative into which he invested $50 million to start, with promises of more.) Civil Beat refused to take advertising for fear that it would bias their coverage but, frankly, the bigger story these days is with nonprofit news sites taking big donor money and risking bias in that way, as NPQ reported (here and here) was recently illustrated by National Public Radio’s support from the Ploughshares Fund and how it may have affected coverage of the Iran nuclear deal.
When it comes to the question of news sites being for-profit or nonprofit, we don’t think that one’s necessarily better than the other save that one is subject to the whim and greed of shareholders and the other is not. If you take on the spirit of nonprofithood and collective action on collective concerns, that makes a difference, but there is little imposed difference in your business model. Nothing about being nonprofit is a magic bullet; you still have to find your value proposition and convince people by the quality and resonance of your work that they want you around on a regular enough basis that they are willing to invest to make that happen. Philanthropic money can help organizations get over that hump over time.—Ruth McCambridge