1. Philanthropy and Journalism:
A Lack of Independence, Transparency & Sustainability
Malena Caruso | Chris Garner | Kristen Kellar | Matt Michaels | Mitch Montoya
Marisa Paulson | Lorena Villa Parkman | Veronica Smith | Drew Woolley
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2. PHILANTHROPIC FUNDING….

3. Threatens News Independence
Act Independently
Journalists should be free of obligation to any interest other than the
public's right to know.
Journalists should:
—Avoid conflicts of interest, real or perceived.
— Remain free of associations and activities that may compromise
integrity or damage credibility.
— Refuse gifts, favors, fees, free travel and special treatment, and shun
secondary employment, political involvement, public office and service
in community organizations if they compromise journalistic integrity.
— Disclose unavoidable conflicts.
— Be vigilant and courageous about holding those with power
accountable.
— Deny favored treatment to advertisers and special interests and
resist their pressure to influence news coverage.
— Be wary of sources offering information for favors or money; avoid
bidding for news. —Society of Professional Journalists
Code of Ethics

4. Threatens News Independence
 Commercial outlets may reflect an
owner bias, but this is countered by One of the primary
the need to attract (and keep) qualities of good
readers and viewers. The most journalism is
successful news outlets are overtly independence—you
commercial. don‘t owe
allegiance to
 Nonprofit news orgs typically anybody. No matter
measure their success in terms of how well-intentioned
influence, not audience, because the charitable
their customers are the donors organization is, you
who've donated money to lose some of that
influence politics, promote justice, or independence.
otherwise build a better world. —Steven Duke
Source: Medill Associate Professor with 25+
―Nonprofit Journalism Comes at a Cost: The downside of nonprofit news
years in newspapers & magazines
organizations like MinnPost, Voice of San Diego, and the Washington
Independent,‖ Slate, Jack Shafer, Sept. 30, 2009

5. Threatens News Independence
 According to a Pew 2011 poll, 77% of
Anybody who invests a
Americans think news organizations tend
lot of money in a
to favor one side while reporting. 80%
newspaper wants
believe journalism is influenced by
powerful people or organizations and 63% something out of it. The
think media are politically biased. Chicago Sun-Times was
started by Marshall Field
 If the public distrusts independent, because he wanted a
profitable news orgs, why would they turn voice for his empire.
to one backed by foundations, corporate —Scott B. Anderson
sponsors, and wealthy people? Medill Assistant Professor
with 30+ years in the media industry
 Can nonprofit news orgs achieve any
product that runs counter to the interests
to those that have contributed large sums
of cash? How do you control perception?
Source:
―Press Widely Criticized, But Trusted More than Other Information
Sources,‖ Pew Research Center for the People & the Press, Sept. 2011

6. Threatens News Independence
 A 2011 Pew study of 46 national
They‘ve got an and state-level nonprofit news
websites, and the 68 institutions
agenda. There‘s a and individuals that financially
certain kind of thing back them, found that half
they [philanthropic “produced news coverage that
foundations] want to was clearly ideological in nature”
fund. You have to
thread the needle  Of the 1,203 stories analyzed, the
majority presented a narrow
between what they range of perspectives on the
want to fund and topics covered. 50% offered just a
what you want to single point of view on
do. controversial issues. Only 2%
contained more than two points
—Rich Gordon
Medill Professor, Director of
of view. Source:
―Non-Profit News: Assessing a New
Digital Innovation Landscape In Journalism,‖
Expert on online communities Pew Research Center for
& online advertising Excellence in Journalism, July 2011

7. Ignores Audience
 Without being forced to compete Foundations lack the three
in the marketplace for audience chastising disciplines of
dollars, nonprofit news orgs move American life: the market
away from a mass audience and test, which punishes or
toward the audience of rewards financial
―evaluators, policy-makers and performance; the ballot
other elites.‖ box, through which the
numbskulls can be voted
out of office; and the
ministrations of an irreverent
press biting at your heads
every day.
—Former Rockefeller Foundation President
Peter C. Goldmark Jr.
Source: Rockefeller Foundation 1997 Annual Report
―Foundation-Funded Journalism: Reasons to be wary of charitable
support,‖ Journalism Studies, Harry Browne, Sept. 2010

8. Ignores Audience
 News organizations have
 Non-profit organizations wouldn‘t
want to report something that could a responsibility to their
potentially hurt the reputation they readers to report both
have with their funder, so they may sides of the issue and not
play down the story.
leave any gaps in
 In the case of the Texas Tribune, coverage regardless of
Stephen Robert Morse, Tow-Knight where they get their
Entrepreneurial Journalism Fellow at funding.
the City University of New York,
wrote that an insider informed him:
―Because it is important for The Trib
to maintain positive relations with
donors, the organization rarely takes
strong stances on issues.‖
Source:
―The Texas Tribune‘s non-profit business model is harming for-profit
journalism in Texas…‖, Stephen Robert Morse‘s Media Blog, March 2012

9. Hides Roots From Audience
NONE of the supporting foundations, corporations,
and individuals on The Bay Citizen, California
Watch, CIR, MinnPost, The St. Louis Beacon, The
Texas Tribune, The Voice of San Diego have LINKS.
Do you know who they are? Would the
average news consumer? Would they look
any of them up online?

10. Hides from Audience
An audience can tell when a for-profit business buys an ad.
It is transparent: GM wants to sell you cars. When a non-profit
buys an ―ad‖ you don‘t know what its agenda may be.
—Caryn Ward Brooks
Medill Assistant Professor
with 25+ years of TV news experience
 One striking feature across many of the nonprofit news sites examined
by Pew in 2011 was that while they may have been forthcoming about
who their funders were, often the funders themselves were much less
clear about their own sources of income.
 ―This effectively made the first level of transparency incomplete and
shielded the actual financing behind the news site. The chief funders
listed for nearly two-thirds of the sites studied-28 in all-did not disclose
where their money came from.‖
Source:
―Non-Profit News: Assessing a New Landscape In Journalism,‖
Pew Research Center for Excellence in Journalism, July 2011

11. Lacks Sustainability
 A philanthropically supported news organization is a rigid structure
that can be at the mercy of its foundation‘s or corporate
sponsor‘s funds. The availability of this money, and the donors‘
interests to allocate it, can dramatically fluctuate and threaten
the future of a publication.
 Unlike with a non-profit, covering a negative story of a donor in a
paywall and/or ad-supported system does not threaten the entire
cash flow for the company.
Journalism needs to be confident in itself and that we‘ll attract
money—ads and subscribers—because of what we do. The ‗I‘m in
need of welfare‘ makes journalists a supplicant in that dynamic.
—Marcel Pacatte
Medill Assistant Professor and Managing Editor of the Medill News Service
Has worked at six newspapers

12. Lacks Sustainability
 The sources of money are not that large of pools. There is only a
handful of foundations that have historically funded journalism.
(John S. and James L. Knight Foundation, The John D. and
Catherine T. MacArthur Foundation…)
 Foundations are having a hard time keeping with demands from
the array of non-profit groups.
 The Carnegie Corporation vice president said in an analysis of
non-profit media that:
 ―Every time I turn around, there are a few more news
organizations, but we don‘t have more money. We
have less money.‖
Source:
―Re-imagining Education Journalism,‖
Goverance Studies at Brookings, Darrell M.
West, Grover J. ―Russ‖ Whitehurst, E.J. Dionne,
Jr., May 2010

13. Is a Fallible Source of Revenue
 It‘s much more important to continue
growing advertising. New-media consultant
If you rely on Merrill Brown says foundation-funded
journalism is merely ―a distraction for how
advertising and you journalism is going to thrive in the future.‖
piss one off, you still
have 99 advertisers.  Philanthropists get tired of funding things
and they move on. It‘s not a viable, long-
If you anger the one term model in an industry that still generates
foundation you $35 B per year.
have, that‘s it. The
ad-supported model  Better options: print and digital ad revenue,
print and digital subscriptions, paywalls
is much safer.‖  The New York Times, The Los Angeles Times, The Boston
Globe, The Minneapolis Star-Tribune, The Chicago Sun-
—Rich Gordon Times (and soon, The Chicago Tribune) are among 150
Medill Professor, Director of dailies with a form of digital subscription service. 323
news orgs have signed on with Press+.
Digital Innovation
Expert on online communities Sources:
& online advertising ―Philanthropic Foundations: Growing Funders of the News,‖ Annenberg School for Communication
University of Southern California, David Westphal, July 2009
―Wait — so how many newspapers have paywalls?,‖ Nieman Journalism Lab, April 5, 2012
―RR Donnelley‘s Press+ Blows Through ―300‖ Milestone,‖ Press+ Release, April 2, 2012

14. Is a big ? for the IRS
 ―…there are a number of concerns about where
journalism fits within current 501c(3) status. They
[IRS] do not consider journalism to be a charitable
function. Another issue seems to be how we are
substantively different from commercial models.‖
--Kevin Davis, Investigative News Network
 The IRS is slowing down or blocking approvals of
tax-exempt status for nonprofit news startups.
 The Chicago News Cooperative shuttered after failure to
receive tax-exempt status, and its foundations declined to fund
the effort in a sustainable manner.
Sources:
 The San Francisco Public Press has been waiting since January ―Making a Difference: Philanthropy and the Future of
2010 Local Accountability Journalism,‖ Walter Cronkite
School of Journalism and Mass Communication,
 The Investigative News Network has been waiting since July Leonard Downie Jr., Weil Family Professor of Journalism
and Vice President at Large, The Washington Post,
2010 Feb. 2012
 The Lens (New Orleans) has been waiting since Fall 2010 ―Will the IRS Derail Nonprofit Journalism? At a crucial
moment, the taxman drags his feet on granting tax-
exempt status,,‖ Columbia Journalism Review, Steven
Waldman, Nov. 2011

15. In conclusion…
 Non-profit funded journalism won‘t work because:
 The lack of Independence reporters and every
member of the news media organization would have
when deciding story coverage.
 A journalist‘s obligation is to his or her audience not
the source (information source or financial source).
 The lack of transparency with the agency funding the
news business. A viewer can not readily see the agenda
of a non-profit making it impossible to discern bias of the
donors.
 The uncertain sustainability of the non-profit news
organization. Foundations and sponsors can easily
change its agenda and decide to allocate its money to
another project – leaving the news business in the hole.