Reporters without orders

Can journalism funded by private generosity compensate for the decline of the commercial kind?

Bandits, terrorists, clan rivalries, lawless security forces and corrupt officials make Russia’s north Caucasus the murkiest part of an often opaque country. Journalism there is difficult and dangerous. Much of the best reporting is done by Caucasian Knot, a bilingual online news service. Whereas most of the Russian national media is owned and controlled either by the Kremlin or by tycoons wary of incurring its displeasure, Caucasian Knot is financed by donations.

Media philanthropists are active in calmer places, too. Readers and advertisers have switched to the internet. Profit margins have shrunk or vanished. Papers are dying and journalists being sacked. Costly foreign and investigative reporting has been particularly squeezed, as has local news. One increasingly popular—if limited—response to these travails is the sort of “philanthro-journalism” long practised elsewhere by the likes of Caucasian Knot.

Thanks to its charitable traditions, this trend is most visible in America. A few philanthropically financed operations have been around for decades, but recently they have been joined by many more. Jan Schaffer of J-Lab, a journalism think-tank at American University in Washington, DC, estimates that American foundations have donated at least $250m to non-profit journalism ventures since 2005.

Many of these, such as the Texas Tribune, cover state politics. The highest-profile is arguably ProPublica, an investigative-reporting unit set up in 2008 with help from the Sandler Foundation. It has already won two Pulitzer prizes. Its managing editor Stephen Engelberg argues that, since investigative journalism is now too expensive to be sustained by commercial business models, it ought to be considered a public good.

The trend is spreading to other countries, including Australia and Britain, where regulators and politicians have fretted about the decline of old-fashioned media without doing much about it. Money from the David and Elaine Potter Foundation is funding the Bureau of Investigative Journalism (BIJ), based at City University in London. Iain Overton, its editor, reckons that many traditional outlets lack the forensic skills, as well as the cash, to crunch data and hold the powerful to account.

Such subsidies aren’t new. Plenty of newspapers in what now looks like their golden age survived on plutocrats’ generosity. That continues today. Several American local papers, one of the most fragile parts of the industry, have been taken over by rich businessmen. Some of Britain’s upmarket dailies are scarcely commercial. The loss-making Guardian is run by a trust (which also owns the moneymaking Auto Trader). The Independent was saved by a Russian billionaire. Some might call that philanthropy, too.

But the likes of ProPublica and the BIJ have some distinct features. They do not seek to make a profit, even hypothetically. Most try hard to ensure donors have no editorial influence. Many give away their content (both those outfits’ websites sport a “steal our stories” button). ProPublica shares its underlying data on, say, doctors’ links with pharmaceutical firms, helping to generate more coverage. It is arguably closer to the world of campaigns and think-tanks than the media industry.

The main lesson of these experiments in philanthro-journalism is that giving up on profit does not mean an end to the concern about either money or readers. For some, legal and tax issues contribute to the money worry. In Britain the model has been hampered by the struggle to secure charitable status, which comes with tax and reputational benefits. The BIJ’s applications have twice been rejected by the charity regulator, whose criteria include broad restrictions on political activity. Jonathan Heawood, the founder of Wilkes, a new, non-profit parliamentary reporting service (named after a great journalist-politician of the 18th century) worries that it, too, might struggle to surmount the regulator’s high hurdles.

On the record, off the books

America’s Internal Revenue Service is willing to grant tax exemptions for non-profit journalism. That makes fund-raising easier, but only a bit. Like Caucasian Knot—which was set up in 2001 with a donation from George Soros’s Open Society Institute but has since diversified its funding—new ventures typically begin with one big donor, but quickly need to find others. John Bracken of the Knight Foundation, America’s biggest donor to journalism, warns start-ups that “we will not be providing perpetual support”. Many try to boost revenue through advertising, or cost-sharing agreements with other outlets.

Read more at Economist.com

 

About the John S. and James L. Knight Foundation

Knight Foundation supports transformational ideas that promote quality journalism, advance media innovation, engage communities and foster the arts. We believe that democracy thrives when people and communities are informed and engaged. For more, visit www.knightfoundation.org.