Last week’s post discussed how nonprofits and other advocacy groups are becoming producers of news in the Internet age, distributing direct to news consumers alongside traditional news organizations. Recently, though, news organizations have been emerging as nonprofits at a rapid rate. These nonprofit news organizations are opening up possibilities for an entirely new business model for news, one enhanced by philanthropy and not reliant on a for-profit corporation’s bottom line.
So far, some have been successful. The most prominent, ProPublica, has broken national stories and supports 32 full-time employees on its news staff; ProPublica aims to cover national “stories with moral force” and to fill a perceived void created by a decrease in investigative reporting. Texas Tribune is gearing up in Austin to do the same with state government coverage. And others are trying on the local level in San Diego and in Minneapolis-St. Paul. The San Diego Union-Tribune is also experimenting with nonprofit status, spinning off its investigative staff into a nonprofit called the Watchdog Institute.
Philanthropy-funded journalism is nothing new, though. National Public Radio has been doing that for years. Not-for-profit news isn’t all that new, either. The Associated Press has been doing it since 1846. What distinguishes these organizations is that they have emerged as a solution to the crumbling business model for mainstream news.
Most of these nonprofit operations are not emerging as competition to their for-profit counterparts. Instead, they have emerged hoping to do the heavy lifting that traditional organizations can’t pay for anymore through their advertiser- and reader-supported business models; they’re undertaking investigative stories that are expensive to produce and public affairs stories that embody the watchdog role of the Fourth Estate.
Many, such as the Texas Tribune, are still in their infancy. Others have already failed at nonprofit success. The staff of The Chi Town Daily News (the site is now updated by citizen journalists and Loyola University students) in Chicago, for example, left to start a for-profit operation this month after donations slowed so much that they couldn’t make payroll.
But many of the nonprofit operations are pushing on, distributing content direct to news consumers through their own websites and partnering with traditional news organizations. ProPublica, for example, often collaborates with news organizations on investigative projects they don’t have the resources to take on themselves. ProPublica has worked with 60 Minutes, the New York Times (including one magazine story estimated to cost $400,000), and others.
ProPublica has raised $14 million to date, according to Alan Mutter, who blogs at Reflections of a Newsosaur. Texas Tribune has already raised more than $2.5 million this year, and Warren Hellman just dropped $5 million to kick-start the Bay Area News Project in San Francisco. All the big donors to those organizations (the Sandlers at ProPublica, John Thornton at the Tribune, and Hellman) attribute their philanthropy to a desire to increase the amount of public affairs and investigative reporting.
Thornton sees opportunity in philanthropy like his. He told Jeff Jarvis, a professor at City University of New York, who blogs at BuzzMachine: “Dance companies in Texas raise $20 million a year. … If journalism philanthropy, 10 years from now, were the size of dance, we’d put 150 reporters on statewide issues and could literally change the way state government operates. Think about that: an extra 20 at the capital; a couple each for all the agencies and the school board; 20 on the border. You almost can’t spend that much money responsibly. I don’t need opera. I don’t need visual arts. Don’t need symphony. Just give me dance, and I’ll change state government.”
But not all are as optimistic as Thornton. Slate’s media columnist, Jack Shafer, is among the dissenters who argue that the way to fix news is to make it profitable again and worry that foundation contributions may come with an agenda.
“In the current arrangement, we’re substituting one flawed business model for another,” Shafer wrote last month. “For-profit newspapers lose money accidentally. Nonprofit news operations lose money deliberately. No matter how good the nonprofit operation is, it always ends up sustaining itself with handouts, and handouts come with conditions.”
Many of the nonprofits show no sign of slowing down, though, and many expect the nonprofit environment to get better as the economy recovers. There are still challenges to be dealt with, though, and questions remain.
Will non-profits be able to develop alternative revenue streams to insulate them from the same shifts in the economy that have proven so damaging for their for-profit counterparts? Will for-profit news organizations become more comfortable with partnerships with nonprofits? What levels will nonprofit news succeed on? Is there enough money to fund the gap in public affairs and investigative reporting that is being left by the changing media landscape?