Is non-profit status the answer to boosting journalism’s role as governmental watchdog?

By Ernie Williamson

The Bulletin


Several times in this column I have expressed fear that the struggling financial condition of many newspapers will mean that local news coverage will be diminished.


With many newspapers cutting expenses or calling it quits, the number of newspaper employees has dropped from about 70,000 in 2006 to 32,000 today. That means fewer eyes watching school boards, city councils and public officials.


It has been hard to watch for someone who has spent more than 40 years in newsrooms.

But in an attempt to rescue local news coverage, there is a growing nationwide trend toward non-profit journalism. A non-profit status means a media outlet is accountable to the public just like other non-profits are.


Much of the non-profit journalism is coming from online startups while some comes from established newspapers like the Salt Lake Tribune and Philadelphia Inquirer that converted to non-profit.


One of the potentially biggest non-profit startups is being organized in Houston.


Three local philanthropies and two journalism foundations are investing more than $20 million to start an independent non-profit news outlet in Houston.


As of this writing, the project does not have a name or top executives, but the three Houston philanthropies – the Houston Endowment, the Kinder Foundation and Arnold Ventures - will join with the American Journalism Project and the Knight Foundation in launching on multiple platforms late this year or early next year.


Researchers from the American Journalism Project have already conducted focus groups looking for ways to provide “more firepower for the Houston media ecosystem.”

Once executives are selected, they will be expected to foster community engagement on important local issues.


The product will be free to the public.


If the executives of this new Houston non-profit want a successful role model, they should pay attention to the Texas Tribune, a non-profit that has established itself as the go-to-place for statewide political news.


What is the attraction of non-profit journalism?


As skepticism about traditional journalism has grown, the public seems to like the idea of media outlets that have nothing to gain and are driven by no other cause than the nobility of journalism.


In reality, of course, acquiring funding plays a major role in non-profit’s operations so I am not sure non-profit journalism should be more trusted than traditional media.


Non-profits also make life easier for publishers. Facing declining profits as advertisers defect to web companies like Facebook and Google, publishers will no longer need to please stockholders with huge quarterly profits.


In the non-profit model, most of the revenue comes from circulation revenue, reader donations and foundations. Many do have advertising, but it typically accounts for very little of the overall dollars that support an organization.


The funding is tax-exempt as long as the non-profits steer clear of overt commercialism. The newspaper doesn’t keep any of its earnings. The earnings are invested back into the media outlet or donated.


One disadvantage is that non-profits are prohibited from endorsing candidates or legislation.

I don’t think, however, readers will miss that.


In truth, although they are seeing a resurgence, non-profits have been around for a while.

The most famous nonprofit began in 1846 when five New York newspapers united to share incoming reports from the Mexican-American War. That experiment in journalism became the Associated Press, which to this day is still a non-profit cooperative.


Besides the pending Houston project, there have been several other notable developments.

Chicago’s public radio station announced that it would take on the struggling Chicago-Sun Times as a non-profit subsidiary.


In Maryland, businessman and philanthropist Stewart Bainum plans on launching a full-service non-profit digital newspaper for Baltimore.


Bainum explained why.


“I served in the Maryland general assembly from 1979 to 1987,” Bainum told the Poynter Institute. “Back then there were six vibrant newspapers covering the sessions. Now there are two. As a legislator, I saw all sorts of shenanigans. Not all of them got reported but a lot more then than now.”


(Please contact Ernie at williamsonernie@gmail.com. Or, send letters in care of The Bulletin, PO Box 2426, Angleton, TX. 77516)