Carnegie Reporter, Vol. 3, No. 3 | Nonprofit Journalism: Removing the Pressure of the Bottom Line, page 2

The role of nonprofits in the media is being taken seriously enough that last year it was the subject of a symposium (co-moderated by James Hamilton) at Louisiana State University's Reilly Center for Media & Public Affairs, where discussion focused on five proposals:

• More media outlets should be operated by nonprofits, and government policy should support this.

• Foundations should subsidize information and analyses for journalists and for use in policy debates.

• The tax code and public policy generally should encourage individuals and families to own media companies.

• Public policy should encourage partisan media outlets supported by interest groups or political parties.

• The government should subsidize information about public affairs and the infrastructure to deliver it.

Such ideas are hardly mere academic fantasies. Nonprofits already deliver a lot more of our news than many people realize, and they have been doing so for a long time. The venerable Associated Press (AP) was founded in 1848 and now bills itself as "the largest and oldest news organization in the world." A mainstay of American journalism without which much of the nation's media simply could not function, AP is a not-for-profit cooperative of its member publishers and broadcasters, whose fees support a global network of 3,700 staff members-- some 2,500 of them journalists.

The Christian Science Monitor, meanwhile, has been publishing what a Boston Globe columnist called its "distinctive brand of nonhysterical journalism" on a nonprofit basis since 1908. Although down to just 59,000 subscribers and sorely tested by an unsuccessful TV venture, the paper has achieved great popularity on the Internet, where it gets 1.8 million individual users per month. Several local daily newspapers, including the St. Petersburg Times, the Delaware State News in Dover, and The Day in New London, Connecticut, are owned by nonprofits too. The New London paper has a bigger staff, higher salaries and more space for news than other papers of comparable size, according to a report last year in the American Journalism Review. A nonprofit organization called C-SPAN, meanwhile, has been giving cable television viewers unmediated access to Congressional debates and other government proceedings (as well as author talks, miscellaneous public affairs events and similarly meaty fare) since 1979. C-SPAN is funded by the cable television industry and, like AP, seeks neither profits nor government funding.

Across the Atlantic, not-for-profit journalism has a long and honorable history. The BBC is perhaps the best known non-commercial brand in the business worldwide, but it's less well known outside the United Kingdom that The Guardian, a respected national daily newspaper of decidedly liberal bent, is owned by the nonprofit Scott Trust, which was established in 1936 both to avoid death taxes and to sustain the old Manchester Guardian as an independent newspaper.

The Guardian model is interesting because it doesn't rely on any philanthropy beyond the Scott family's initial generous act. Instead, The Guardian and its Sunday sister, The Observer, are sustained by a variety of business ventures including regional newspapers, radio outlets and a set of special interest publications. The latter include a highly profitable automotive weekly and the United Kingdom's leading automotive web site. Thus, while The Guardian and The Observer have lost money for the past two fiscal years, the Guardian Media Group (which owns the Scott Trust's various media operations) has finished in the black.

While other newspapers in Britain have shifted to a tabloid format to appeal to readers, Guardian Media is spending more than #100 million (over $180 million) to relaunch the two national papers in a mid-size format because the editors opposed the rigid tabloid format. "There are times when both the Guardian and The Observer think it right to shout at their readers," writes Scott Trust chair Liz Forgan. "But the world they seek to report on is a complex one full of loud and soft, long and short and good journalism needs flexibility to do its job properly. Only by re-pressing completely, in a new size which was compact but big enough to allow more than one tone of voice on the front page and throughout the paper, could those journalistic ambitions be realized."

By the standards of American newspaper companies, the Guardian Media Group's pretax profits are modest: just three percent in the fiscal year ended April 3, 2005, nearly all of it attributable to asset sales. Pretax profits were seven percent in each of the two preceding years and two percent in 2002. In fiscal 2001 profits were a healthier fifteen percent, but much of this, too, was due to asset sales. Guardian Media Group chairman Paul Myners, writing in the company's 2004 annual report, makes no bones about what he's up to: "Our core objective is the protection of our national titles, The Guardian, The Observer and Guardian Unlimited [the Guardian's heavily used web site]. All other activities are in pursuit of that core objective and exist as a store of value to enable us to pursue our primary objective."

It's important to remember that, like the few American newspapers owned by nonprofit organizations, the Trust was founded as the result of an extraordinary act of generosity and public-spiritedness by a member of the owning family. Such acts, unfortunately, are likely to remain rare, and thus the ownership structure of the Guardian, like that of the St. Petersburg Times, (which is owned by the nonprofit Poynter Institute), is unlikely to be widely emulated.

In this country, at least, the journalism of ideas is a nonprofit preserve of longstanding, even if such periodicals aren't officially nonprofit charitable organizations under IRS rules. One that meets those requirements is Harpers, originally a business and now put out by the Harper's Magazine Foundation. Other such publications limp along trying to finish in the black but subsidized by committed individual donors. Most of these magazines are small, but they have an outsized impact on public opinion because of their influential readers, who include many journalists and academics.

CommonWealth magazine, for example, is quarterly publication of the nonpartisan Massachusetts Institute for a New Commonwealth (MassINC) and examines Bay State issues in depth. In 2002 it reported on relatively youthful state employees who manage to get themselves "fired" soon after they become eligible for pensions. "A review of pension records by CommonWealth reveals that more than 1,000 state employees have seized on a variety of special early-retirement provisions since 1990, with hundreds of them obtaining pensions for which they may not have been qualified," the article said, singling out some big name Massachusetts politicos in the process.

CommonWealth is sent to roughly 1,000 MassINC dues-paying members as well as 9,000 journalists, academics, public officials, business executives and other opinion leaders, many of whom it also brings together in public forums with politicians and other powerful Massachusetts figures. It's thus able to affect public opinion despite a small circulation and a budget of just $750,000 a year--and a business model based on seriousness rather than celebrity appeal. The trick is support from roughly 90 disparate sponsoring organizations, including banks, labor unions and law firms. For their money, says editor Robert Keough, they get to advertise in a respected medium targeted at some of the state's most important people. But because there are so many such sponsors in such a broad range of fields distributed so widely across the political spectrum, the magazine hasn't had to worry if one or two get mad about an article it publishes. Says Keough: "Being a nonprofit with a commitment to the improvement of civic life frees us from the lowest-common-denominator mentality that dominates commercial journalism today."

Next page: Nonprofit status has proved especially suitable for the journalism of advocacy.

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