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.
Commercial outlets may reflect their owners' views, but this tendency is always tempered by the need to attract readers and viewers. Nonprofit outlets almost always measure their success in terms of influence, not audience, because their customers are the donors who've donated cash to influence politics, promote justice, or otherwise build a better world.
National Public Radio's 1971 mission statement, quoted in James Ledbetter's book Made Possible By … The Death of Public Broadcasting in the United States, presents this do-gooder sentiment with smiley faces and sparkling unicorns. Writes Ledbetter, who currently edits Slate's sister site, The Big Money:
[NPR's] quirky mission statement stabs at the coarseness of modern American life; it reads almost as if it were written by a team of existential psychologists. NPR pledged it would "serve the individual: it will promote personal growth; it will regard the individual differences among men with respect and joy rather than with derision and hate; it will celebrate the human experience as infinitely varied rather than vacuous and banal; it will encourage a sense of active, constructive participation rather than apathetic helplessness."
To borrow a tidy phrase from the business world, donors to nonprofits seek not payouts from their investment but psychic income. They want to feel that their money has done good, or at least caused "evil" some pain. They want to help publish stories that will make Congress to sit up and take notice and pass legislation. The want the major media to chase their stories. They want to publish stories that will convince voters to vote the way they'd have them vote. This editorial ethos persists like bacteria inside some commercial news outlets, where reporters and editors find it demeaning to file stories that readers want to read in favor of stories they think readers should read.
Where donors have explicit political goals, we should expect their contributions to crest in election years. Even if they're subtle about influencing the editorial direction of organizations they fund, they'll have a hard time building credibility outside of their core constituents. Nonbelievers know when they're being gamed and lectured to by preachy publications. Having just evicted the usual gatekeepers, how many readers are going to be eager to have philanthropists reset the news agenda?
Robert Gammon takes a combative position against nonprofit journalism in his East Bay Express blog. He warns that the Hellman-financed Bay Area News Project "threatens traditional news media in the Bay Area," which would include, of course, the East Bay Express.
Gammon calls the 120 Berkeley students working for free "slave labor" and says this workforce will give "the new venture a huge advantage over established Bay Area media organizations that depend on paid, veteran journalists to gather and put together news stories," he wrote. In the short term, the Bay Area News Project will benefit the public, but if its successes cause existing news operations to shrink and disappear, the public will end up relying on "inexperienced, unpaid students" for their news. The same could be said of the nonprofits competing with other for-profits for reader share. I cry no tears for the for-profits, but I see his logic. (James Murdoch, son of Rupert, presented a similar argument against the state-financed BBC last month.)
Nothing I've written should be taken to disparage the good work produced by Mother Jones, National Public Radio, Harper's,the Christian Science Monitor, or the Center for Investigative Reporting, to pick several nonprofits with good reputations. Hell, long ago I worked for a nonprofit magazine that did good work (Inquiry). Nor should anything I've said be automatically taken as a slam against the new nonprofits. But the rise of nonprofit journalism comes at a price. Be prepared to pay it.
Felix Salmon writes that Paul Steiger made $547,692 in his last full year as editor of the for-profit Wall Street Journal. In 2008, his first full year as editor of the nonprofit ProPublica, he made $570,000. Glad to see somebody putting profit into nonprofit. (Addendum, 8:58 p.m.: Salmon has added this "update" to his piece: "ProPublica's Dick Tofel points out that Steiger did get options when he worked for the WSJ, which brought his total compensation comfortably into seven figures. Steiger gets no bonus at ProPublica. Not that he really needs one, given that he's earning almost $50,000 a month.") Got an hour to kill? Go to Guidestar.org and find the highest nonprofit journalist salaries you can and send them to email@example.com. I'll publish the biggest. Watch my Twitter for self-promotion, wry asides, and retweets. (E-mail may be quoted by name in "The Fray," Slate's readers' forum; in a future article; or elsewhere unless the writer stipulates otherwise. Permanent disclosure: Slate is owned by the Washington Post Co.)