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Alms for the Press?The case against foundation ownership of the New York Times.

By Jack ShaferPosted Tuesday, Feb. 3, 2009, at 6:51 PM ET

We've finally reached the point at which some of the finest minds doing the biggest thinking about the battered news business believe the best eraser for red ink is … charity.

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Although they weren't the first to make the pitch for newspapers on the dole, financial pros David Swensen, the chief investment officer at Yale, and his colleague Michael Schmidt gave the idea a boost last week in a New York Times op-ed. They posit that the best way to maintain the quality journalism of, say, the New York Times, would be to retool it as a nonprofit and run it from the proceeds of a $5 billion endowment.

New Yorker staff writer Steve Coll, who first did the math on converting the Washington Post to an endowed nonprofit while serving as its managing editor earlier in the decade, immediately shared his enthusiasm for the concept in two blog posts (Jan. 28 and Jan. 30). Coll surmises that the Post could fund a healthy newsroom with a $2 billion endowment.

Missing from the nonprofit debate is any mention of why enough paying customers can't be found to support these news-gathering institutions if they are so vital to our "democratic constitutional system" (Coll) and "our democracy" (Swensen and Schmidt). The implication seems to be that political coverage, foreign dispatches, and investigative work are inherently noncommercial. If that's the case, has the publication of thousands of foreign, political, and investigative news stories ("quality coverage," to put it in shorthand) over the decades been an act of philanthropy by newspapers?

Of course not. The top dailies started to bulk up on quality coverage at about the same time they started to bulk up on entertainment and lifestyle coverage—during the 1970s and 1980s, as they cemented their positions as quasi-monopolies and revenues zoomed.

To be sure, some newspapers exercised greater commitment to quality than others, and some continued to pay for quality longer after the big advertising wave receded. But many of our notions of what a quality newspaper ought to contain are based on memories of recent decades, when many newspapers were printing money and had no trouble saying yes to proposals for new foreign bureaus, new national bureaus, new suburban bureaus, and new sections.

There is something arbitrary about the endowment brigade's wish to freeze newspaper newsroom size at its high watermark. There's also something disconcerting about wanting to divorce the newspaper from market pressures. (If I wanted that sort of news product, I'd watch The NewsHour.) Without some market discipline, how will a newspaper know whether it is succeeding or not, an idea Jonathan Weber explored yesterday in The Big Money. And it's not as though endowments are "insulation against hard economic times," either, as Times Executive Editor Bill Keller put it yesterday. "Just ask universities," Keller continued. Blogger Howard Weaver calls foundation fans people "who wish some billionaire would endow newsrooms so they don't have to change."

Even if someone did establish a foundation-funded, nonprofit newsroom as large as the Times' or the Post's, I'd still have misgivings about it. Who would appoint the directors of the foundation? To whom would the foundation be accountable? To whom would the editors and reporters ultimately report—the foundation directors or the readers? Under the current arrangement, you can blame the Graham family if you dislike the Post, the Ochs-Sulzbergers if you're peeved about the Times, Sam Zell if you hate the Los Angeles Times or the Chicago Tribune, or genocidal tyrant Rupert Murdoch if the Wall Street Journal lets you down.

But if the Foundation Times or Foundation Post irks you, whom do you yell at? Let's suppose Coll persuades Warren Buffett, Bill Gates, and others to endow a quality newsroom per his $2 billion plan. I'd trust Coll to run such a foundation and pick directors who in turn would pick the editors who picked the reporters. All would be good for a year or two, but as foundation sleuth Martin Morse Wooster demonstrates in his 2007 book, The Great Philanthropists and the Problem of "Donor Intent," foundations have a tendency to deviate from the principles of their founders. Wooster points to the philanthropic institutions started by John D. Rockefeller, Henry Ford, Andrew Carnegie, John D. MacArthur, and J. Howard Pew as examples of organizations started by conservatives and taken over by liberals. "Why bother to set up a charity if, after you're gone, the people who run the charity with your name ignore your ideas?" Wooster says.

Foundations can evade ideological takeover by setting "term limits" on their operations, spending down their cash, and vanishing, as the John M. Olin Foundation did. But if the point is to stake the Times for perpetuity, the biggest problem will be keeping the foundation hustlers from taking over. In my experience, foundations that fund journalism directly—as opposed to journalistic education—are more interested in promoting what they consider "social justice" than promoting journalism. For them, a newspaper is just a means to an end. For a detailed look at foundations meddling with journalism, see Rick Edmond's timeless white paper from 2001, "How Foundations Use the News Media To Set an Agenda" (PDF).

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Jack Shafer is Slate's editor at large. Follow him on Twitter.

Illustration by Mark Alan Stamaty.

COMMENTS

Remarks from the Fray

It has been surreal to follow the debate that has unfolded in recent weeks on the subject of endowing news organizations -- as if this is a new idea.

NPR employs more than 400 journalists in 36 bureaus - 17 of them overseas. We produce and distribute more than a dozen hours of original news programming every day. Our audience is healthy, stable and growing. We have won just about every journalism prize in the book.

And, we are non-commercial and not-for-profit. NPR is supported by philanthropists, grants, corporate sponsorship, and by our member stations. (They are funded similarly, and well as by millions of listeners nationwide). Our endowment was formed in 1993 and stands at $205 million. We are the living, breathing prototype of the kind of operation David Swenson, Steve Coll, Jack Shafer and others are imagining – and imagining to be revolutionary.

So let me inject some reality into the debate:

First, the notion that non-commercial status and an endowment is protection from a bad economy is nonsense. Our endowment has shrunk like all endowments, making it difficult - though not impossible - to draw from. Our donors are also feeling the economic pressure; corporate sponsors, even more so. We cut 7% of our staff in December. And we will likely need to find other ways to cut our budget before this is over. If you're looking for a magic bullet – you won't find it.

Second, I take exception to Shafer's contention that philanthropy-supported journalism inevitably leads to compromise. NPR has been around for more than 38 years with no such degradation. There has been no case in our history of undue influence from a donor. Our structure and governance protects us from that. Neither the NPR Board of Directors, nor the NPR Foundation Trustees have any authority to direct our news coverage. The News Division reports to the CEO, who serves as a firewall. Listeners and philanthropists give to NPR precisely because they want to protect our independence and integrity. That is our inviolable pact with our audience.

Third, Shafer worries that an organization with an endowment and board means there's no one to yell at. Fear not – we get yelled at just as much as every other news organization. Our governance has not dissuaded our listeners from letting us know when they hear or read something they don't like; and they do so with the zeal of the owners that they are. Where is that yelling directed? You name it – to me, to our Ombudsman, to individual reporters, to the head of news, to our stations. We are all accountable and we take that seriously. Our non-commercial status does not insulate us from criticism – nor should it.

Lastly, Shafer concludes that non-commercial status inevitably leads to over-earnest (read: boring!) coverage. Our supporters don't want to hear dull coverage and our reporters have no interest in force-feeding broccoli to our listeners and online readers. It is possible to be not-for-profit, comprehensive and journalistically excellent, without losing the ability to tell a good story that will interest the audience. And our 26 million weekly listeners seem to agree.

--Vschiller
Vivian Schiller
President and CEO, NPR

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