The nonprofit news business—if that isn't a contradiction in terms—is spreading like a midsummer algae bloom.
Philanthropists, who in different times would have endowed a seat at a university or contributed to a new research wing at a hospital or established yet another museum of modern art, have turned to funding new, nonprofit journalism outlets. Herbert and Marion Sandler poured the financial foundation for ProPublica two years ago.
And the Knight Foundation has come to the aid of Voice of San Diego (seeded by retired venture capitalist Buzz Woolley), MinnPost, St. Louis Beacon, and others. Rotating elsewhere in the nonprofit universe we find the Center for Independent Media, which runs news and commentary sites in Washington, D.C. (Washington Independent); Iowa; Michigan; Colorado; Minnesota; and New Mexico.
Earlier this summer, Texas Monthly veteran Evan Smith picked the pocket of venture capitalist John Thornton to get the Texas Tribune going, and last week, San Francisco billionaire Warren Hellman staked the new Bay Area News Project to a $5 million bankroll. The operation will merge the talents of 120 journalism students from Berkeley with the staff of public radio powerhouse KQED-FM, which has a news staff of 28.
All this silly money arriving in the nick of time to fund what some like to call "serious journalism" can only be applauded. Every community should be fortunate enough to have a nonprofit like the New Haven Independent walking the beat for it.
But before we get out the party hats and noise-makers to celebrate the rise of nonprofit journalism, here's the bad news. In the current arrangement, we're substituting one flawed business model for another. 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.
At the MinnPost, the money didn't come from investors; it came from "donors," as Suzanne Perry wrote in the Chronicle of Philanthropy in 2007. Its founder, Joel Kramer, doesn't court subscribers, he courts "members," she writes. "High-quality journalism is not primarily a consumer good," Kramer wrote in an e-mail to supporters. "It's a community asset, the base on which democracy and community are built."
In a forthcoming paper, Harry Browne of the Dublin Institute of Technology rummages through the baggage foundations bring when they start funding news. No comprehensive content analysis of foundation-funded journalism has been produced. "For the most part we have the foundations' own glossy reports to go upon," Browne writes.
For Browne, both nonprofit news and commercial news often find themselves constrained by the hidden agendas of their masters. Just as commercially supported journalists often find themselves dispatched to investigate the owners' hobbyhorses, nonprofit newsers are frequently assigned to "chase after the idiosyncratic whims of funders."
Casting a skeptical eye on foundations, their motivations, and their lack of accountability, Browne turns to the opening pages of the Rockefeller Foundation's 1997 annual report (PDF) for ammo. There, outgoing foundation President Peter C. Goldmark Jr. writes:
Foundations lack the three chastising disciplines of American life: the market test, which punishes or rewards financial performance; the ballot box, through which the numbskulls can be voted out of office; and the ministrations of an irreverent press biting at your heads every day.
One general difference between investor-owned, advertising-supported journalism and its nonprofit cousin (which is often advertising-supported, too), is that the commercial product usually focuses on attracting and serving readers. There have been many for-profit owners in the history of commercial journalism—from William Randolph Hearst to convicted felon Rev. Sun Myung Moon—for whom turning a profit with the publication was not among the highest goals. But the most successful, most heavily decorated, and longest-lived news outlets in the American journalism have been overtly commercial.