John Thornton, Myth-Buster

Those of us who work in the nonprofit sector in journalism have gotten used to what Texas Tribune founder John Thornton calls the "familiar refrains" of those who moan and groan about how the nonprofit model simply won't work because there's not enough foundation money, how nonprofits could never replace legacy media, blah, blah, blah, yada, yada, yada.

The latest installment comes from Alan Mutter. Why today? I'm not sure. But it's worth reading his post and then John's response. Unlike Alan, John has lived and breathed the nonprofit model, and their experiences (or lack thereof) are revealed clearly in what they write. Alan builds the nonprofit model into an easily felled straw man. But John sees it for what it is -- one way (of many) to fill the growing void of socially responsible journalism.

Len Downie's Nonprofit Network

By any measure, former Washington Post executive editor Len Downie epitomized success in the traditional, subscription-and-advertising model of newspaper journalism: With a staff that once topped 900 and an annual budget of $100 million, his newsroom hauled in 25 Pulitzer Prizes over 17 years and wielded influence from Capitol Hill to the darkest recesses of the nation's capital.

Since stepping down from the Post's top newsroom job at age 66, Downie has taken on a professorship at Arizona State University. But behind the scenes, he also is lending his experience to help shape the practices and prospects for the burgeoning nonprofit sector in journalism.

Why? Simple, Downie says. The for-profit model alone no longer can support the kinds of investigative, explanatory and accountability journalism that society needs. As the for-profit sector shrinks, journalists and interested readers must explore new ways to underwrite their work.

"There are going to have to be many different kinds of economic models,” Downie said in an interview Wednesday afternoon at the Post's offices. "The future is a much more diverse ecosystem."

Downie has made himself an expert on the nonprofit model, and wrote about its possibiliies in his recent report, "The Reconstruction of American Journalism," with Michael Schudson.

Less known, perhaps, is that Downie casts a wide net as within the nonprofit sector of journalism. He's on the board of Investigative Reporters and Editors, which has incorporated panels on the nonprofit model in its conferences. He's also a board member at the Center for Investigative Reporting, which recently launched California Watch to cover money and politics at the state level. And he chairs the journalism advisory committee at Kaiser Health News, which has provided niche explanatory reporting to leading newspapers, including the Post.

Looking across the sector, Downie sees great potential -- and some big, unanswered questions.

On the upside, nonprofits are helping journalism move toward a more collaborative model, Downie said. In the old days, newspapers resisted ideas and assistance from outside. But in the new news ecosystem, collaboration is a way of life. “All of our ideas have been changed about that," he said.

Also a plus: Big foundations and the public at large are warming to the idea that news organizations are deserving of their support, just like the symphony or any other nonprofit that contributes to society's cultural assets. “There’s a question of whether there’s enough public realization," Downie said. "I think we’re heading to that direction. Awareness is growing steadily.”

But a lot of questions still must be sorted out, Downie said.

High on the list, he said, is the most basic of all: Where will the money come from? Like other nonprofits, nonprofit news organizations will have to find the right mix of foundation money, grassroots support, advertising, and perhaps additional government support, he said.

That leads to the other big question of sustainability: It's not clear that all the nonprofits that have launched in recent years will survive. “How many will succeed and for how long?” Downie wondered. A related question: How will the collaborative model will settle out, and where nonprofits will find productive niches?

Downie said he also has been watching nonprofits wrestle with the issue of credibility -- how to achieve it and how to keep it.

The answer begins with editorial independence and transparency about financial supporters, Downie said. But when it comes to painting a bright line between journalism and ideology, advocacy or spin, there are no magic formulas to assure readers -- just the experience of trial and error.

“It’s one of these things that’s proven by its exceptions," Downie said. "When there’s an exception, it’s a scandal.”

AOL's Foray Into Nonprofit Journalism

Big, pathbreaking news from AOL. The company announced this afternoon that its Patch Media subsidiary is launching a nonprofit subsidiary, Patch.org, to provide hyperlocal coverage to underserved communities.

According to the announcement: "Patch.org will partner with community foundations and other organizations to launch Patch sites and bring objective local news and information to communities and neighborhoods around the world that lack adequate news media and online local information resources."

This is a significant development because by creating a nonprofit hyperlocal operation to match its for-profit cousin, AOL gives us proof of concept that nonprofits can complement for-profit media by delivering value that for-profits cannot. We've seen the dynamic at work in other cases -- but usually when a nonprofit hands over a story to an independent, for-profit partner that no longer can afford to do all the enterprise journalism that it would like.

AOL gets it. And that's refreshing.

Fair Warning: Here Comes FairWarning

A couple of former Los Angeles Times staffers next week plan to launch a new, nonprofit news service called FairWarning that will focus on "safety and health issues facing consumers and workers, and related topics of government and corporate accountability," according to a statement released Thursday. The site will go live March 24.

The new organization will be led by Myron Levin with help from Joanna Lin and three graduate journalism students from UC-Berkeley and the University of Southern California. The organization also has an all-star board of directors, including:

* Margaret Engel, director of the Alicia Patterson Foundation and a former editor and reporter for The Washington Post
*Chuck Lewis, founder of the Center for Public Integrity and the Investigative Reporting Workshop at the American University School of Communication
*Vernon Loeb, deputy managing editor for news and multimedia at The Philadelphia Inquirer
*Bill Marimow, editor of The Philadelphia Inquirer and two-time Pulitzer Prize winner
*Henry Weinstein, a law professor at UC Irvine, former Los Angeles Times reporter and a founder of the Center for Investigative Reporting.

I asked Lewis what he found compelling about Levin's vision for FairWarning. Here's what he told me in an email:

Over the years, I had known and had great respect for Myron Levin's important work investigating the tobacco companies and other health and safety subjects. The idea that someone that talented suddenly had nowhere to do that kind of in-depth work was outrageous and unacceptable. Myron asked if I (as the first incubated "new models" project of the Investigative Reporting Workshop's iLab) would help him form a 501c3 nonprofit and I helped him get a small grant from the Public Welfare Foundation to get moving, and I am honored now to serve on his Board.

In the Great Recession, Myron has gone out and singlehandedly landed two other much larger grants, and important stories are springing forth. He's off to the races. This is an increasingly familiar story today -- veteran investigative reporter also becomes editor and publisher, as a necessary act of entrepreneurialism, all for the public good. It is thrilling and inspiring to behold.

In the statement, Levin said he founded FairWarning "as a new model for presenting essential news and information that is underreported or absent from traditional media."

“Even before news budgets went into free fall, few news organizations gave adequate attention to safety and health investigations, despite the potential to save readers from injury or death,” Levin said. “In today’s hollowed-out newsrooms, even fewer reporters can tackle these complex and time-intensive stories. We want to help fill the gap.”

What I Meant To Say ...

We had a great panel Wednesday at the We Media conference on the rise of nonprofits as contributors to the news ecosystem. My fellow panelists for the session were Ellen Miller of the Sunlight Foundation, Andrew Sherry of the Center for American Progress, and Jonathan Aiken of the Red Cross.

We had lots of great questions and a rousing discussion. But that meant I didn't get to use my prepared remarks. So for those who might be interested, here they are:

Four years ago, I was a Washington correspondent for a major metro daily, working in the national bureau of a medium-sized newspaper chain. Today, my former bureau and my former job are gone.

I’ve been lucky. Now I work as a strategic analyst for AARP, arguably the nation’s biggest nonprofit news publisher. A big part of my job is to find new ways we can leverage the nonprofit model in journalism to create value for our members – and for society as a whole.

I got interested in the nonprofit model for journalism in 2004, when I read an essay by my graduate advisor at Chapel Hill, Phil Meyer, entitled “Saving Journalism.”
My first thought after reading Phil’s piece was, hey, great, somebody might actually want to give me money to do the kind of reporting I want to do.

So I decided to start my own nonprofit newsroom, and I set about contacting journalists and foundations who I thought might help me.

I got nowhere fast.

But in my failure, I learned a lot. For one thing, I realized that 99 percent of journalists had no idea how nonprofits worked.

Over the years, I have come to another important realization: Journalists who view the nonprofit model as I did then – as a way to solve their immediate problems – shortchange its possibilities.

While the nonprofit model has gained some cachet recently, nonprofit journalism is as old as the Associated Press, which began in 1846 as a cooperative of New York newspapers interested in defraying the cost of covering the Mexican-American War.

That history is important because it also speaks to future possibilities. Then as now, the nonprofit model supports creativity through partnerships and collaboration rather than competition and “not invented here” mentalities.

This aspect of the nonprofit model, I think, makes it particularly well suited to the online world and a news ecosystem where consumers expect information to be free of charge.

I’ve also come to the conclusion that journalism is the easy part.

The nonprofit model requires vigorous strategic planning and no small measure of entrepreneurial spirit – just like any business. And to succeed, nonprofits must show how their journalism can connect friends, neighborhoods, communities and, ultimately, a society.

That’s what the really good ones are doing. And if a nonprofit can reach that level, a member’s donation takes on a whole new meaning. It becomes an affirmation of values.

Until recently, nonprofits were anomalies in a largely for-profit ecosystem, despite some well-regarded successes – Mother Jones magazine, the Christian Science Monitor and Center for Public Integrity, to name a few.

But today, the nonprofit model is becoming just that – a model with basic structures that can be replicated and perfected in any variety of circumstances and communities. And the model is evolving rapidly as startup nonprofits experiment and create new revenue sources through events, thought-leadership conferences, corporate sponsorships, and, of course, advertising. Some are functioning as membership organizations, much like AARP.

There are signs that the sector’s creativity is paying off.

When we talked about a “virtuous cycle” in the old days, it was the notion that great journalism boosted circulation. That helped boost ad rates, which in turn made it possible for newspapers to hire more great journalists.

While that cycle now has turned into a death spiral of staff cuts and declining circulation, the nonprofit model offers us a new kind of virtuous cycle – one in which diversity of revenues appears to correlate with growing news budgets.
Are there flaws in the nonprofit model? Absolutely.

Perhaps the most frequent argument I hear is that nonprofit journalism somehow lacks credibility because it hasn’t withstood the discipline of the market.

To this criticism, I say that philanthropy indeed is a means to legitimacy - if it's done properly. Nonprofits measure success not by the revenues and profits they generate, but by yardsticks such as how many people read their work, educational value, and the impact it has on decision-makers. If they create social value, they will reap the financial rewards. If not, they’ll wither.

This is the lesson I’ve gleaned from my travels: Great journalism isn’t enough. What really counts are the relationships that the nonprofit develops with its readers. Journalism is only part of the nonprofit’s value proposition, and at the end of the day, it might not be the most important part.

What Makes It Legit?

With many new news organizations launching as nonprofits and many nonprofits moving into the news business, one has to wonder: Exactly where does journalism end and something else -- call it spin, opinion or advocacy -- begin? Or to phrase the question as Chuck Lewis recently did for me, if a nonprofit says it's doing journalism, what makes it legit?

The line -- if you believe there ever was one -- is becoming increasingly blurred. As the traditional advertising-and-subscription model of newspapers continues to erode, other institutions -- including advocacy, membership and charitable nonprofits -- are leaping to fill the void. But it's not clear that some new entrants are playing by the rules of journalism and nonprofit accountability. Or more accurately, it's not clear that they want to.

In this uncertain environment, the question of legitimacy looms large, particularly for nonprofits. As beneficiaries of taxpayer support, nonprofits have a special duty to be absolutely transparent. If they want to call their work journalism, the material they publish must be good enough meet any test of professional standards that might reasonably be applied, from both the realms of journalism and of nonprofit management.

Trouble is, no widely accepted set of best practices or due diligence exists for journalism nonprofits. To separate journalism from what Dan Gillmor has dubbed "almost journalism," many in the business have borrowed from Justice Potter Stewart's standard: "I know it when I see it." Or at least they think they do.

This standard has worked most of the time. But it failed notoriously in December, when the Washington Post published a story by The Fiscal Times, a new, online news organization owned by The Fiscal Times Media Group LLC and backed by investment banker and former Commerce secretary Pete Peterson. Peterson is a long-time deficit hawk, and has helped fund the Concord Coalition, a nonprofit that is "dedicated to educating the public about the causes and consequences of federal budget deficitseradicating the federal deficit."

As recounted by Post ombudsman Andy Alexander, the article drew criticism from progressive critics of Peterson because it quoted the president of the Concord Coalition, but failed to mention that the group receives funding from Peterson's foundation. The article -- reporting that momentum was building for a plan to name a special bipartisan commission to address the nation's debt -- also fell short of the Post's standards because it cited data from a study supported by the foundation but again failed to note the foundation's backing, according to Alexander.

Compounding transparency issues, The Fiscal Times gives mixed signals about its corporate status.

In fact, The Fiscal Times is not a nonprofit. It has a ".org" landing page and invites readers to create a "Member ID." It also says on its about us page that it "is part of a new era of independently supported non-partisan journalism." But it is incorporated in Delaware as a limited liability company, or LLC, a for-profit structure most often used by sole proprietorships, partnerships or small businesses.

Jackie Leo, editor in chief of The Fiscal Times, told me in an email that the organization changed strategies shortly after launching. "When we started this project, we thought we would model it after ProPublica or some of the other non-profit news sites," she wrote. "But our lawyers pointed out that if we post opinion pieces (from our bloggers and columnists) about candidates running for office or bills pending in Congress, and if that opinion can be deemed as influencing the outcome of a vote, the IRS would consider it 'lobbying' and we would lose our 501c3 status. With that in mind, we decided to create the LLC."

Did the Post know all this before it agreed to publish The Fiscal Times' work? Judging from Alexander's column, the Post had no formal means of screening its reporting partners. Rather, it appears to have relied almost exclusively on institutional familiarity with the Fiscal Times' staff, which includes former Post reporter and editor Eric Pianin.

The controversy has subsided. But it has left a lasting impression in journalism circles, particularly in Washington, and nobody wants to repeat the Post's mistake. As Vivian Schiller, CEO of National Public Radio, told me in an interview, "my alarm bells go off" when she looks at the Fiscal Times' corporate structure, financial backing and reporting focus.

At NPR, Schiller added, editors employ a set of criteria to evaluate potential partners. Among them: nonprofit status, a well-regarded board of directors and top-notch journalists. But the process remains an informal one.

So what to do?

As I've talked over this problem with Lewis, Schiller, David Westphal and others who think about it a lot, I keep coming back to the idea that some standards are in order -- a Good Housekeeping seal of approval, if you will, for nonprofit journalism.

This task may be easier said than done.

To begin, there are some deceivingly simple threshold questions. For one, should the nonprofit sector take it upon itself to set standards for its journalism and business practices? If yes, then who should be on the drafting committee?

If not, then are journalism nonprofits willing to live with the current mishmash of definitions of journalism put forth by entities as diverse as the Senate Press Gallery, the Pulitzer Committee, and perhaps the IRS? And how about other stakeholders such as the Post, NPR and others that have come to rely on investigative and explanatory reporting from nonprofits? Following The Fiscal Times episode, will they overreact and overlook work by ambitious, high-quality news organizations?

It seems to me that the answers should come from the nonprofit sector of journalism, if for no other reason, than to minimize damage potential damage from bad actors that might yet emerge from within its ranks.

No list of criteria or standards can guarantee quality or take the place of professional responsibilty. But it is a place to start -- much like the new IRS Form 990, which was re-designed based on input from the nonprofit sector. So here are some suggested criteria that might help.

Nonprofit Governance:
* 501(c)3 or 501(c)4 status
* All-volunteer publisher board
* 990s clearly posted online
* Major donors named
* Case for philanthropy linked to editorial indpendence
* Clear accountability measures
* Clean accounting opinion

Journalistic Professionalism:
* Functionally independent newsroom
* Journalism advisory board or ombudsman
* Adherence to SPJ Code of Ethics
* Supportive institutional culture
* Submitted entry for professional prize (SPJ, IRE, etc.)
* Holder of federal or state press credential

Comments? I plan to spend the next few months researching this question in greater depth, and I welcome thoughtful input.

Also, for those planning to attend the We Media conference next month in Miami, this is one of the issues we plan to address during our panel on nonprofits in journalism, so please come ready to discuss.

When Nonprofits Attack

The first item in Howard Kurtz's "Media Notes" column Monday is a chilling tale of how the Church of Scientology recently hired highly decorated investigative journalists to examine how its media nemesis, The St. Petersburg Times, has covered the church's various activities over the years.

I'm not so troubled that the church, a nonprofit with its own magazine, is interested in investigating the Times. After all, it's a free country, and everybody should be entitled to do their own opposition research if they want.

What's disturbing is that the church is trying to pass off the study as "journalism criticism" -- the label applied by Steve Weinberg, a former IRE executive whom Kurtz says was was paid $5,000 to edit the study. Weinberg told Kurtz that his contract calls for the study to be published in full, but only if the church chooses to make it public.

“(T)he contract says the church has the right to do nothing with it except put it in a drawer,” Weinberg told Kurtz.

And for now, it looks like that's where the study will stay.

Clearly, the church is more interested in its reputation than in supporting quality journalism. But the church's attack on the Times undermines journalism in several ways: It lures top journalists into compromising roles; it raises questions about their motives ("I can certainly use the money these days," Weinberg told Kurtz); it tramples any notion of transparency; it raises doubts about the professional integrity of the church's own magazine; and it clearly attempts to cast a chilling effect on the Times' future reporting on the church.

That's 0-for-5 by my count. Boo, hiss.