Nonprofit Journalism: Removing the Pressure of the Bottom Line

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The British electorate supports its public broadcasting system despite the levy on televisions. A BBC survey last year found that eighty-one percent of respondents think "the Beeb" is worth the money--and many would pay more. Asked what they'd be willing to pay to keep the BBC from shutting down, the average answer was roughly double what they are paying now. For evidence as to why this might be, consider the BBC's coverage of the recent terrorist attacks on the London transit system. Baltimore Sun television critic David Zurawik noted that CNN's coverage "featured a red logo emblazoned with the words: "LONDON TERROR," and he quoted a CNN anchorwoman saying, "An eyewitness described utter pandemonium--bodies strewn around. ... People were screaming. ... They felt they were trapped like sardines essentially waiting to die." By contrast, Zurawik wrote, the BBC "provided a sense of stability even as the death toll climbed," offering an "oasis of relative calm" marked by "images of emergency workers restoring order." It should be noted, however, that there may be some problems ahead for this venerable broadcasting service. In the spring of 2005, the BBC announced plans to cut about 4,000 jobs from a workforce of about 21,000 to save some #355 million (about $670 million)--approximately 10 percent of its annual expenditure--over the next three years. Commenting on these proposed cost-saving measures, BBC director Mark Thompson said that the television license fee will only survive as the main method of funding the BBC "if the public is convinced that the corporation is spending money wisely."

In all likelihood, NPR is as close as we'll come to a domestic version of the BBC--and government funding will be a relatively small part of the picture. In fact, NPR only gets about one percent of its budget directly from Uncle Sam, although local public radio stations, which get about thirteen percent of their funds from Washington, use some of this money to pay NPR for programming. But while public radio in this country gets by on relatively little government money, it benefits from having a diversified funding base. Local public radio stations get about a third of their money from listener contributions and another quarter from corporate and foundation grants.

NPR has even established a foundation to raise an endowment for itself (PBS has more recently done likewise), and over the years has garnered funds from the Ford, Ahmanson and MacArthur foundations, among other sources. In 2003, it announced what has amounted to a $230 million gift from the estate of Joan B. Kroc, the San Diego philanthropist and widow of McDonald's tycoon Ray Kroc. The Kroc gift has enabled NPR to hire more journalists and expand its news coverage, which now involves 350 full and part-time employees and an annual news budget of $50 million. Local public radio stations provide news and public affairs programming of their own as well. NPR's Klose notes the contrast to for-profit radio: "Radio is completely finished as a reporting medium on the commercial side."

Unfortunately, the news about commercial news coverage generally is not good. The Project for Excellence in Journalism (PEJ), in its 2004 survey of the industry, "found that most sectors of the news media have seen clear cutbacks in newsgathering resources," according to Tom Rosenstiel and Amy Mitchell of the PEJ and Bill Kovach of the Committee of Concerned Journalists. The number of newspaper newsroom staffers shrunk by 2,000 between 2000 and 2004, a drop of 4 percent overall. Some major online news sites saw much deeper cuts, such as MSNBC, which cut around a quarter of its staff between 2001 and 2003. Radio newsroom staffing declined by 57 percent from 1994 to 2001. After an uptick in 1999, network staffing began to drop again in 2000. Since 1985 the number of network news correspondents has declined by 35 percent while the number of stories per reporter increased by 30 percent.

That same year, 2004, the Pew Research Center for the People and the Press, in conjunction with PEJ, conducted a survey of 547 national and local journalists. Some 66 percent of national journalists said profit pressures were hurting journalistic quality (and, to point out that this is not just the usual newsroom grousing, only 41 percent held this view in 1995). Among local journalists, the figure had risen to 57 percent from 33 percent in the same period. Dan Gillmor, a former columnist for the San Jose Mercury News and lately an advocate of citizens' or grassroots journalism, may have summed up the worries when he said in an interview: "It's not at all clear, given the erosion of the business model the mass media are now suffering, that they will be able to afford--or their shareholders will permit--the kind of things I consider crucial in a democratic society."

The trends in newspapers are particularly worrisome. Newspapers are the journalistic institutions providing the most extensive coverage, from small town papers right up through USA Today. They are the news organizations with the most boots on the ground. Their articles are longer, deeper and more extensively sourced than those of other media, and mostly self-generated. Paul Ginocchio, who analyzes media stocks at Deutsche Bank Securities, states flatly that: "Newspapers are the prime content providers for the modern news distribution machine."

The newspaper industry remains quite profitable, but critics like Philip Meyer say this comes at the expense of spending on news. And the future doesn't look bright. Daily circulation, at about 55 million, has been stagnant for half a century--and "penetration" has been falling since the mid-1950s, at least. Back then, the industry sold 1.2 newspapers per household. Daily newspaper penetration today is hugely diminished, at roughly .5 newspapers per household. Worse yet, circulation has been falling in absolute terms since the mid-1980s. "I don't see any reasonable expectation this is going to change anytime soon," says John Morton, a veteran industry analyst. Newspaper advertising, meanwhile, the industry's lifeblood, is under attack. Such Internet ventures as craigslist.org and monster.com are aggressively competing for the industry's prized classified ad business. And Wal-Mart, the nation's most successful retailer, has preferred to advertise by direct mail.

As newspapers lose readers, celebrity-oriented periodicals are experiencing surging subscriptions and newsstand sales as well as big increases in advertising pages. They are also attracting a wider variety of ads, suggesting more mainstream acceptance. Meanwhile, says Steven Lagerfeld, editor of The Wilson Quarterly, which is published by the Woodrow Wilson International Center for Scholars, ideas-oriented publications such as his are battling for attention from the same relatively small group of potential readers. "There's no demand for quality," laments John R. MacArthur, president and publisher of Harper's.

But the appetite for escapism and schlock doesn't prove people don't want--or can't use--good journalism. "There is no shortage of historical studies showing a correlation between quality journalism and business success," writes Meyer, whose own work suggests that newspaper credibility is correlated with higher ad rates, and that higher staffing levels are linked to a slower decline in penetration. Paul Ginocchio, meanwhile, looked at 150 large newspaper markets and found, in the words of the Project for Excellence in Journalism 2005 report, The State of the News Media, "that papers recognized for superior news performance, like The Washington Post, the Lexington Herald-Leader and the Arkansas Democrat-Gazette had superior 'brand power'--defined as circulation numbers and ad rates above expectations for their markets." In other words, for newspapers, quality pays.

One area where news is clearly growing is the Internet, which has opened the door to a slew of other nonprofit media ventures that didn't exist before. New York's Gotham Gazette (gothamgazette.com) was started in 1999 with a grant from the Charles Revson Foundation and receives funding from the Rockefeller and New York Times foundations, among others. Besides offering a handy daily digest of New York City news stories appearing in other outlets, Gotham Gazette generates coverage of its own and publishes a policy magazine. It even posts translated articles from some of the city's foreign-language ethnic periodicals, and offers readers a database of articles relating to local political campaigns. Gotham Gazette is operated by the Citizens Union Foundation of the City of New York, a nonprofit research and education organization that sees itself as a watchdog of the public good. Gotham Gazette's annual budget is just $550,000 a year.

How does such an operation keep itself going financially? Gotham Gazette editor Jonathan Mandell says that the organization, which initially focused on establishing itself and building up its coverage, is now focusing more on sustainability as well, and that means finding new sources of revenue. Twice last year, for example, it ran appeals asking readers for money, garnering a total of $30,000, and Mandell says appeals this year will probably raise more. Gotham Gazette has also started offering classified and display ads, and is considering selling sponsorships for its popular e-mail newsletters, which offer potential advertisers the advantage of a highly targeted readership with a manifest interest in the topic at hand. "The Internet part of us in some ways is far more important than the nonprofit part of us," Mandell observes, noting that many news sites on the web aren't making a profit even if they wish they were.

Organizations such as Carnegie Corporation, the Reuters Foundation, the Pew Charitable Trusts and the John S. and James L. Knight Foundation, meanwhile, have been funding a variety of media undertakings, from providing information that journalists can use to underwriting actual coverage. The Reuters Foundation, for example, has supported Voices of Iraq (http://www.aswataliraq.info/), a grassroots Iraqi news site that, with the help of $800,000 from the United Nations, plans to become an independent commercial news service. In this country, Carnegie Corporation is among the funders of the Center for Public Integrity, which conducts investigative reporting through a global network of journalists. Last year the Center's inquiry into U.S. government contracts in Iraq and Afghanistan won the online version of the George Polk Award, an important journalistic honor. The Center posts the fruits of its labor at http://www.publicintegrity.org.

Or consider the list of recipients awarded $12,000 each by the University of Maryland's J-Lab: the Institute for Interactive Journalism, which is using a $1 million grant from the John S. and James L. Knight Foundation to pay for its New Voices project. One was the Friends of the Deerfield (New Hampshire) Library to start a web site with local news, opinion and photography. Another was the Mid-Columbia Centro Cultural in Hood River, Oregon to launch a weekly half-hour, bilingual news program on a low-power FM radio station, with training for community members to write scripts and edit audio. Yet another is a community news weblog in a poor, largely African American neighborhood of Chicago. One of the goals, says J-Lab executive director Jan Schaffer, is for the New Voices grant recipients "to develop various models of sustainability--from corporate sponsorships, to foundations, to advertising, to subscriptions, etc."

"I doubt," she adds, in a comment that might apply across the nonprofit media landscape, "that there will be one size that fits all."

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