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September 15, 2010; Source: Nieman Journalism Lab | This article about whether or not nonprofit publications receive government support is equal parts astounding and funny. The author, Jim Barnet, obviously got a bee in his bonnet about the self-righteous declarations of some nonprofit publishers’ websites that say they take no government support. But what about your tax exemption? He asks. Isn’t that a government subsidy? What about the fact that your donors are assured right there in black and white on your website that their contributions are tax deductible?
What is alarming about the whole thing is that these high falutin’ journalists did not seem to understand the question. Barnet correctly points out that the deduction is basically a tax expenditure and one with a long history not only for nonprofits but for publishing. He cites the recent report by Cowan and Westphal, Public Policy and Funding the News [PDF], to support this observation.
Barnet goes on to speculate that if these publishers want to be so darn pure, maybe they should give up their ability to receive tax deductible funds. He’s obviously being something of a nudge, but who can blame him when faced with the following confounding response from Jason Stverak of the Franklin Center to a question about whether tax deductions constitute government support. Here is his full e-mail response to the question, whether or not he thought tax deductions constituted government support:
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“Our generous contributors are not funding government support of journalism when they donate to the Franklin Center. In fact, the Franklin Center strongly believes that government intervention in media will create greater problems than the struggling newspaper business is currently enduring. If government intervenes in the news industry, journalists will no longer be able to report credibly on stories that matter to the people, but ultimately only on what matters to officials. Journalists may ignore scandal and corruption for fear of losing government funds. They could become political flacks and write to appease government instead of investigating it.
Drawing the conclusion that every donation to a non-profit 501 c3 is supporting the government in some way is incorrect. Tax deductions for gifts to houses of worship are not funding government support of religion and tax deductible donations to health care associations are not supporting government healthcare.”
Call an editor!—Ruth McCambridge
