Nonprofit Journalism: From Anomaly to Paradigm

You can’t win if you don’t enter. Isn’t that the old slogan for the lottery?

So it is in the world of nonprofit journalism. This is an exciting, historic time, and new nonprofit newsrooms are launching every month. Each one represents a huge investment of hard work and professional will.

But the lottery metaphor comes into play here: A lot of them - probably most - ultimately are going to lose. There aren’t enough foundation dollars, personal donations or advertising links for them all to survive. It’s going to be painful to watch as some really talented journalists ultimately are forced to do something else to make a living.

But some will survive. And they might change the world – or at least how we report on it.

Who am I to say? It's hard to be certain of anything these days. But I have spent the past five years following journalism nonprofits, and I've spent the past five months covering them like a beat. I’m working on a master’s in nonprofit management at George Washington University, and this summer, I wrote a paper that attempted to provide some context for what’s going on in the nonprofit sector of journalism.

The paper is about 7,000 words and has 61 footnotes. But rather than impose any of that on anybody other than my graduate adviser, I thought it might be of some use to report what I actually learned from the experience. Here goes.

What makes the nonprofit model so compelling in these times? It’s the economics of the Web. Given the infinite capacity to replicate a story at a marginal cost of nearly zero, there really is no money to be made in doing expensive, risky journalism like the kind that comes from investigative desks, statehouse bureaus and foreign correspondents. Economics forces socially responsible journalism into the realm of the public good – the kind of thing that we value together as a society, but none of us is willing to pay for individually.

The knee-jerk response to the problem of a public good is to tax everybody and have the government pay for it – just like national defense. But I count myself among those who thinks that it’s deeply unwise to have government supporting newsrooms that should be scouring the records of government and the people who run it. Government support might be fine for PBS and other broadcast. But when it comes to old-fashioned investigative reporting, the potential for political shenanigans is just too great.

That leads us to the nonprofit model, where private-sector creativity meets social need. The model fits neatly into a world where journalism is a public good because it has a different bottom line. Nonprofits measure their success not by the revenues and profits they generate, but by yardsticks such as how many people read their work, the educational value of that work and the impact it has on decision-makers.

The nonprofit model also lets journalists come as close as any human can to establishing an island of credibility in a online sea of misinformation, disinformation and too much information. I’ve heard it said many times that in the online world, transparency is the new objectivity. So be it: The tax laws require nonprofits to disclose their major donors, and the good ones are taking disclosure to greater levels than that required by law.

Are there flaws? Absolutely.

We’re already seeing some sniping among the haves and have-nots, especially when it comes to foundation funding. Foundations like big names, and they don’t like failure. So in these circumstances, it’s a lot easier to write a big check to the News Hour than to go through the hard work of checking out the bona fides of a local online startup. Community foundations can help here, but the deck is stacked against the little guys.

By the same token, there also is talk that one of the high-profile start-ups in particular is “too big to fail” – meaning that there will be pressure not to compete for resources, especially at the national level.

Then there is the issue of gray areas where existing nonprofits – most likely, advocacy organizations – will start getting into the journalism business. This might not be so scary, as I learned in reading David Westphal’s paper from USC on the role of foundations. He talked to the folks at Human Rights Watch, who do painstaking investigations of abuses – and view the rules of journalism as a sloppy substitute for the kind of work they do. Likewise, the Kaiser Family Foundation created an advisory board of journalism luminaries to oversee the work produced by its new Kaiser Health News. But would the National Rifle Association or the AFL-CIO be as judicious?

I do think that a lot of the problems with the nonprofit model can be overcome. A group of nonprofits got together at the Rockefeller Foundation’s Pocantico estate in July and began the Nonprofit Investigative News Network, which will address standards, as questions of scale such as handling benefits and joint fundraising. To me, the “Pocantico Declaration” was the surest sign that the nonprofit model in journalism has entered a new era. As I say in the title of my paper, it’s no longer an anomaly; it’s becoming a paradigm.

But one criticism has stuck with me. It came from Ted Gup, incoming head of the journalism department at Emerson College and the man who taught me my first journalism class 24 years ago at Georgetown (where they had only one journalism class). Ted’s take is that the nonprofit model could create a new universe of sacred cows while leaving some vital topics uncovered. If newspapers come to rely on content produced by foundation-backed newsrooms, they will cede their ability to make independent judgments, he said. “It’s not Darth Vader; it’s also not Joan of Arc,” he said. “But we’ve got to be on guard. I worry about the slippery slope.” How to keep from skidding into that unknown, I cannot say.

Every journalism nonprofit is different. But there are some clear patterns and trajectories in the nonprofit model that are emerging. Chuck Lewis’ Center for Public Integrity, founded in 1989, proved that a newsroom could be built and fully maintained on foundation support. But new entrants realize that they can rely on foundations only as a start. Many are looking to the NPR or Minnesota Public Radio models for sustainability – build relationships with readers, but also look for ways to expand those relationships, maybe even in ways that create for-profit subsidiaries. Building on that general framework, I see three types of nonprofits in the offing:

Level 1: The true-blue journalists. These tend to be the folks who decided to launch an online startup after getting laid off from a newspaper. They think that if they can just start pumping out some really, really good stories that they couldn’t get into print when they still had newspaper jobs, some wealthy philanthropist will recognize their genius and start writing seven-figure checks. I know this type well because I used to be one of them – though I never got as far as launching my own Web site. If you’re reading this and saying to yourself, “That’s crap, I know I can beat the odds,” please take it from me: ProPublica’s $30 million from the Sandlers was a lightning strike. Maybe there will be a few more like it at the state and local level, but don’t expect the money spigots to open wide just because you can report and write.

Level 2: The relationship builders. These are the folks who know that the key to sustaining themselves is building lasting relationships with readers – and teaching them to see value in the relationship, not just in the news product. That’s one of the main reasons, I think, that newspapers are having such a hard time with the idea of converting to a nonprofit model: Although the people who run newspapers know that many subscribers feel a strong bond with their product, at the end of the day, it’s still a product like a favorite beer. The harder thing to do is to show readers how journalism connects friends, neighborhoods, communities and, ultimately, a society. At that point, a donation takes on a whole new meaning – it’s a statement of a reader’s values and connection to the world around him/her. It’s nothing less than an affirmation of self. But again, that takes a lot of hard work – and even then, it might not be enough for the long haul.

Level 3: The value adders. These are the ones who get the relationship part, but also know that they need a solid business proposition to support what they’re doing. What does that look like? It takes finding an audience that recognizes the enormous societal value in investigative and watchdog journalism – and is willing to pay at least something to get it. The natural audience here, of course, is the lobbyist. To see what I mean, look at what venture capitalist John Thornton is doing in Austin, Texas. He’s building his nonprofit Texas Tribune on top of the subscription base of Texas Weekly, an online, subscription newsletter on Texas statehouse politics that he bought last month.

So what happens to daily newspapers? Some are having success partnering with nonprofits. The Washington Post, for instance, in one week ran three front-page stories with assists from ProPublica. But can the nonprofit model save any of them? I'm not so sure. It’s not that endowing a major newsroom would cost so much – it would; think billions – but the economics are forcing newspapers to dig their own graves. The assets of most newspapers have become so devalued that their owners do better to continue cutting staff and circulation just enough to eke out some profit. It’s a death spiral, but the gravitational pull is too strong to get out. When I think about the future of newspapers, I think about the freebie “Express” I am handed whenever I get on the Metro.

Will the nonprofit model save journalism? Maybe not exactly in the form that we know it today. But I think it can help - in part because the model also has its own gravitational pull. Back in 1846, a handful of New York newspapers realized they all were spending way too much money to have news couriered from the front of the Mexican-American War. So they got together and created a cooperative that today is known as the Associated Press, a nonprofit. The need to cooperate on some level is the same today.

I also see the the power of the nonprofit model in places where detractors might least suspect. Just this May, in a new article entitled "Hired News" in Reason, the leading libertarian magazine, author Tim Cavanaugh argued that the demise of newspapers isn’t such a bad thing because public relations professionals are taking over where investigative journalists are leaving off. He wrote:

Flackery requires putting together credible narratives from pools of verifiable data. This activity is not categorically different from journalism. ... Communications is a highly competitive environment, and it is becoming more competitive. Frequently the most valuable information comes out just because somebody wants to make somebody else look bad.

As I said at the time, this is an argument from the Stone Age. Cavanaugh in essence argues that if two people are able to throw rocks at each other, it's a fair fight, and that's all society owes its members. But the fact that he chose to make his argument in a magazine owned by a 501(c)3 nonprofit underscores exactly why society benefits from thriving alternatives to for-profit journalism. By its very appearance, his article proves that the nonprofit model is here to stay.