by Daniel Akst

When newsgathering isn't tied into company profits, does journalism—and the public—benefit?

In the media cacophony that is New York, whoever heard of Gotham Gazette? Apparently lots of people. The web site, devoted to news of the city and its neighborhoods, gets more than 105,000 unique visitors per month. "In May [2005]," says Sara Stuart, Gotham's director of marketing and communications, "when you Googled 'New York City politics,' Gotham Gazette was the first of 26 million results."

National Public Radio (NPR), by contrast, is a household name. In the early 1980s it had only two million weekly listeners, but since then what was once the province of a band of self-selected cognoscenti has grown into nothing short of a mass phenomenon. NPR now reports 26 million weekly listeners--a figure that has doubled in just the past decade. NPR programming reaches listeners on more than 780 independent public radio stations blanketing the country, not to mention on the Internet.

Gotham Gazette and NPR are both fast-growing media organizations, but they have something more interesting in common: they are both private, not-for-profit organizations. In fact, at a time of growing concern over whether quality journalism and high profit margins can continue to coexist in the traditional media, nonprofit journalism is flourishing.

From individual bloggers to influential public affairs magazines, from community newspapers to broadcasting outlets, nonprofit media are multiplying in number, increasing their audiences and stretching the boundaries of journalism itself. Thanks to the Internet, barriers to entry into the news business may well be lower than at any time since wandering minstrels carried news from place to place in verse. And while nonprofits can't ignore markets any more than they can ignore budgets, a news organization that hopes only to break even can focus less on what will sell and more on the kinds of coverage it believes society needs. Thus, while for-profit broadcasters appear to have scaled back their commitment to news, NPR has been adding journalists and ramping up coverage.

Of course, profit and excellence in the media are hardly mutually exclusive. The New York Times, The Washington Post, the Los Angeles Times and The Wall Street Journal, which deploy masses of relatively well-paid professional journalists and maintain the highest standards, are all profit-seeking enterprises that also produce enormous social good. Princeton University sociologist and Pulitzer Prize winner Paul Starr, in his 2004 study, The Creation of the Media (Basic Books), is clear-eyed about the role of profit in all this, observing that, in general, "Markets in liberal societies enrich the public sphere far more than they impoverish it."

But in some situations the market mechanism--pressured by cultural, social and political changes--may not always be adequate, and some thoughtful people are suggesting that this is the case with respect to the profit-oriented media that dominate the American news landscape. The traditional postwar mainstays of American news--the big three television networks and the many daily newspapers that provide most local coverage--seem to be caught in a dispiriting cycle of cutbacks and declining audiences that they lack the ability to break. At the same time, consolidation and the decline of family ownership have left media organizations subject to the same profit pressures as other publicly traded companies--despite the special mission media companies have always claimed for themselves. Under the circumstances, it's fair to ask whether the news organizations of today--and tomorrow--are up to the task of sustaining the informed citizenry on which democracy depends.

"I think there is a fundamental role for nonprofit entities in our media system," says Robert McChesney, a University of Illinois communications professor who founded a nonprofit organization of his own (freepress.org) to advocate media reform. To critics like McChesney, the problem is a consequence of concentration and the obligations public companies of all kinds have to their shareholders. McChesney argues that the current system "is set up to maximize profit for a relative handful of large companies. The system works well for them, but it is a disaster for the communication needs of a healthy and self-governing society."

James T. Hamilton, an economist and political scientist at Duke University whose works include All the News That's Fit to Sell: How the Market Transforms Information into News (Princeton University Press, 2003), advocates outright nonprofit ownership as one of several means to generate more hard news coverage. "One way to increase the attention reporters pay to politics and government is to shift the objectives of some owners away from profit maximization," he writes. "A foundation concerned with the quantity and quality of public affairs coverage might decide to purchase or run a news outlet that emphasized hard news."

Sometimes when markets fail, the path is clear for government intervention and in fact, some advocates of a greater role for nonprofits support changes in tax and other public policies to promote this form of media ownership. In other advanced nations, after all, government plays a much bigger role, particularly in funding public broadcasting. In America, by contrast, the federal government only provides about fifteen percent of what is spent on public broadcasting, an amount roughly matched by the states. McChesney, for one, believes the most cost-effective way for nonprofits to improve the media is by focusing on government policy. He cites as a precedent the original Carnegie Commission on Educational Television, underwritten by Carnegie Corporation of New York during the administration of Lyndon B. Johnson. The Commission's landmark report led to the creation of the U.S. public broadcasting system in 1967.

But there are times when markets fail and government can't fill the gap, particularly in the wary and decentralized American tradition, which makes even modest government funding for the arts controversial, let alone the kind of national television tax that pays for the British Broadcasting Corporation (BBC). Often, in such circumstances, private, nonprofit organizations can step effectively into the breach--and the seeming marketplace shortfall in quality journalism may be just the kind of breach they can ably help to fill. A shortage of quality television for kids was addressed in just this way when Carnegie Corporation commissioned the feasibility study (by Joan Ganz Cooney) that led to the birth of the children's Television Workshop--creator of Sesame Street.

Nonprofits have succeeded in other complex, costly and socially critical ventures, including most notably higher education. America's colleges and universities are decentralized, overwhelmingly not-for-profit, dependent on a mix of funding sources--and despite a little grade inflation, the envy of the world. What they supply is both vital and, with some rare exceptions, unavailable from profit-making businesses. In the media, "the nonprofit sector shows promise," affirms University of North Carolina journalism professor Philip Meyer, who wrote a book called The Vanishing Newspaper: Saving Journalism In The Information Age (University of Missouri Press, 2004). He observes that, rather than being left entirely to a competitive marketplace, news coverage in this country has long been buttressed by various kinds of charitable or government benefits. McChesney points out that low postal rates, broadcast licenses, local cable monopolies and even the nature of copyright protections are among the many government policies that subsidize and shape the American media outside the free market system.

Nonprofits can also help fill an important coverage gap inherent in the structure of America's advertising-driven media business model. Since daily newspapers, for example, get four-fifths of their revenue from advertising, the places that need coverage most--places where people don't have a lot of money--typically get it least. This is why newspapers in some places have dropped the names of their older, struggling host cities from their names--the better to follow their affluent readers to the suburbs. At the same time, papers "covering" entertainment, home design and restaurants have proliferated, all of them appealing to the affluent and many carrying nothing like news. Nonprofit media could pay more attention to the Americans who don't shop or eat out quite so much.

Next page: The Christian Science Monitor has been publishing what a Boston Globe columnist called its "distinctive brand of nonhysterical journalism" on a nonprofit basis since 1908.

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