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NONPROFIT MODEL NOT A PANACEA FOR AMERICAN NEWS MEDIA

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Would-be reformers need to keep that in mind

A couple of weeks ago I wrote a column about a bill (S. 80) filed with the Mass legislature by Rep. Lori Ehrlich (D – Marblehead) and Sen. Brendan Crighton (D – Lynn) that aims to start a volunteer commission to assess the state of local journalism in the Bay State. While agreeing that it was a thoughtful step in the right direction, I was critical that the composition of the proposed body was not diverse enough—as the first version of the bill failed to include journalist unions and representatives of news organizations that were in the trenches doing journalism at the local level.

 

This week, Ehrlich and Crighton released an op-ed on their bill in CommonWealth magazine that doesn’t yet remedy the problems I named, but does state that they intend to change the number and types of stakeholders that may get seats on the commission: “We are looking forward to further discussion not only about who wants to be at the table, but also about the many ideas being considered in the journalism industry. The commission that will look at those ideas is still subject to change, potentially adding those who can help us see the full picture, or relieving disinterested parties of any obligation.”

That’s probably a positive development. Especially since I previously stated that my organization, the Boston Institute for Nonprofit Journalism (BINJ), fully intends to attend hearings on the bill (with friends) and push for commission seats for organizations comprised of working journalists: labor unions like NewsGuild-CWA, the Society of Professional Journalists, and BINJ itself. And why do my colleagues and I think our group should have a seat at that particular table? Because we’re not only working local journalists, but we’re a nonprofit organization that’s experimenting with ways to reverse the rolling collapse of American journalism … and then expand it.

Ehrlich and Crighton specifically name the nonprofit news model as one worthy of consideration by the proposed commission among a number of possible solutions to the crisis in journalism: “As with the start of any conversation, and as happens with every bill, we have already learned much about the state of local journalism from many interested parties. Some creative models already in practice include local stakeholder rescues, buybacks from national conglomerates, and experimental philanthropic nonprofits. These models and others emerging are all worthy of study and evaluation by academics, policymakers, and especially those in the field.”

A sentiment I have some agreement with. And I note the nod to “those in the field” like my co-workers and I with approval. But I’d also like to see more discussion of the difficulties with running news organizations as nonprofits. Because it’s hardly a new economic model. And it often doesn’t work well for funding news production. Something I can say from long experience.

Historically, nonprofit news outlets were started by organizations that were already nonprofits—notably churches and charities. Perhaps the most famous of these, the Christian Science Monitor, was founded in 1908 here in Boston. Just as nonprofits as we now understand them were first forming. And it continues to publish to this day. But few church or charity news outlets insist on the journalistic standards the Monitor is justifiably famous for. Most are essentially PR mouthpieces for their respective organizations. Which is not necessarily a bad thing, but it’s not journalism.

Over time, independent news outlets also began organizing as nonprofits. Particularly after the political upheavals of the 1960s and early 1970s damaged many Americans’ trust in mainstream commercial newsmedia. And the Tax Reform Act of 1969 created the IRS 501(c)3 nonprofit status that allows qualified charitable organizations to offer their donors a tax break. Mother Jones magazine, for example, was launched as a nonprofit in San Francisco with a staff of 17 in 1976. Such publications absolutely produced journalism as it’s commonly understood. And being nonprofit was a way to distance themselves from the problems inherent in the traditional advertising-based commercial news model.

However, there’s nothing preventing a nonprofit news organization from selling advertising. Not all nonprofit news outlets do so, but it can be done. Where nonprofits differ from for-profit companies is in how they are run and the fact that they are not organized to turn a profit. Which is not to say that they can’t make money. They very much can. The difference is that the federal government expects them to use surplus funds they raise to further the mission of their organization. Rather than disbursing it to shareholders or partners.

Virtually all nonprofits have some kind of board of directors in charge of their enterprise. The board can be elected—if there are members to do so—or self-selecting. And it will generally have hire/fire power over paid staff.

 

Where nonprofits don’t differ from for-profit companies is that their money has to come from somewhere.

Therein lies the rub. Said money can come from smaller donations from many individuals—which for a news nonprofit is pretty close to the ideal sources of funds with which to produce journalism in the public interest.

But it can also come from fee-for-service activities, like when BINJ charges money for certain events we run. Or from selling merchandise.

Most questionably, however, the biggest money donated to nonprofits comes from rich people, the foundations usually created by wealthy families to keep their money away from tax collectors, and from the corporations owned by those families.

 

How exactly is that different from a commercial news outlet taking ads from major corporations—which, as I’ve mentioned, nonprofits can also do? The answer is that, at the end of the proverbial day, it’s not different at all.

For many nonprofit news outlets, rich people have as much control over what they publish as they do with any commercial outlet. Not direct control (unless they bankroll a news organization outright), but the control that comes with the implicit threat that money that has been donated one year can always not be donated the next.

Nonprofits of all kinds seek to avoid that unhappy fate by trying hard to keep rich donors happy. And nonprofit news organizations are no different in that regard. Their boards can find themselves under tremendous pressure to avoid rocking any boats containing key funders at times. When they succumb to that pressure—off the record and merely implied as it normally is—they sacrifice their outlets’ independence. As surely as any for-profit news outlet does when its editors refuse to cover certain subjects that would discomfit their largest advertisers.

Which assumes that typical nonprofit news operations manage to get major donations from rich funders. But most nonprofit news outlets, like most nonprofits in general, do not get such donations. Nor do they have enough paid staff to get large numbers of small donations to compensate and thus struggle to survive for relatively brief periods before calling it quits. Or devolving into purely volunteer outlets—a nearly certain prescription for irrelevance and failure.

Fundraising for nonprofits is extremely competitive in the US—a dilemma made even more dire by the rise of crowdfunding in our society. People are constantly being asked for charitable donations. Day in, day out. Leading to the phenomenon known as “compassion fatigue.” In response, facing an economy that never really allowed working families to recover from the last recession, many people will tend to restrict their limited donations to the organizations that hold the commanding heights in their area of interest. To get more “bang for their buck,” so to speak. But also because —in the “journalism space”—they just can’t keep track of all the smaller news outlets that are trying to get donations. Outlets they hear little about anyway, and therefore don’t trust.

Hence the spectacle of a few well-funded news nonprofits like ProPublica (that is now, it must be said, funding some local work on its own terms) continuing to grow even as smaller nonprofit news outlets with more diverse voices crash to earth. And millions upon millions of dollars are ceaselessly getting dumped on academic institutions by larger foundations to “study” the crisis in journalism rather using that money to fund smaller nonprofit news outlets to help ameliorate that crisis at the local level where it is most intractable.

Given all that, running news outlets as nonprofits is no panacea for the many problems besetting American journalism. It’s actually a difficult option that isn’t necessarily morally superior to running a for-profit news outlet. And how could it be otherwise? Having a board and a membership does not automatically result in more independence for news nonprofits in our capitalist political economic system. Especially if their members are inactive and their boards are more interested in placating donors than doing the kind of take-no-prisoners journalism that their staff journalists often want to do.

Which is one important reason my partners and I have gradually built a loose hybrid operation over the last four years featuring a nonprofit (BINJ) and a for-profit (the alternative newsweekly DigBoston). Both fully independent of each other, but able to work in tandem in many situations. In hopes that our news enterprise can achieve stability in ways that continue to elude most news outlets today, and then grow. Through a mix of small and large donations funding investigative journalism and educational activities on the BINJ side, and ads from small and large businesses funding general news production on the DigBoston side. In that fashion, we believe we can prevent monied interests from having undue influence over the news we produce.

Which is why we need to have a representative on the proposed Mass journalism commission. To be there to say that neither the for-profit nor non-profit models alone can fix what ails journalism. And as I said in my first column on this topic, there also has to be public investment in news production to offset the lock currently held on news outlets by the rich and powerful. Not state-run news outlets, and not just more federal money for quasi-public media like PBS and NPR, but pots of local, state, and federal government funds that can be drawn from in a democratic manner to help make sure that every city and town in the nation has at least one independent news outlet dedicated to covering happenings within its borders.

It’s certainly worth experimenting with such reforms in the Bay State, and BINJ is committed to doing our part to figure out what works. Naturally, we would prefer to be admitted to any virtuous journalism circle that state government creates toward that end. But if we have to create our own policy network, we will do so.

This article was first published in DigBoston on 04/10/2019.  It is being re-posted here with the express permission of that fine publication.

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