Today
Mon 25 October 2021

Rodney Benson assesses the pros and cons of the funding model of American non-profit news organisations and considers whether it could help stop the relentless redundancies happening in UK journalism

As the UK media industry experiences the latest wave of redundancies in a repeated tidal wave of job losses, US-style philanthropic solutions are being considered as a potential lifeboat.

Public funding for media in the US is among the lowest in the world. As the advertising-dependent commercial model has collapsed, philanthropy has been asked to step into the breach. And why not?

America has the largest philanthropic foundation sector in the world, with total assets of more than $1 trillion and annual giving in excess of $75 billion. Only a tiny portion of this largesse goes to journalism: according to the Media Impact Funders database, the average annual giving to the broad category of ‘journalism, news, and information’ was about $320 million from 2016 to 2020 (up from $192 million per year between 2011 and 2015). Still, that’s a lot more than in any other country – including the UK, with estimated annual philanthropic donations to journalism of £30 million (about $50 million).

Foundation support has been crucial to the rise of the US non-profit news sector, accounting for nearly half of its total funding, with the rest coming from individual donations, events and advertising. America’s 250 non-profit news outlets generate estimated annual revenues of $500 million, providing jobs for 2,300 journalists.

Some of the best investigative reporting in the US is now being done by national non-profits such as ProPublica, the Centre for Investigative Reporting (CIR/Reveal), and the Centre for Public Integrity. These non-profits can conduct investigative reporting largely free from the commercial conflicts of interests that sometimes plague platforms reliant on advertising revenue. For example, CIR/Reveal was nominated for a Pulitzer Prize for its reporting on worker injuries and the human toll of robotics technology at Amazon warehouses, a topic not surprisingly ignored by The Washington Post – owned by Amazon founder Jeff Bezos.

American non-profits also provide excellent specialised reporting on criminal justice (The Marshall Project), the environment (Inside Climate News), and education (Chalkbeat). The Texas Tribune, MinnPost, and Voice of San Diego, among many others, provide comprehensive local public affairs reporting. Cooperation and sharing, rather than competition, increasingly define the non-profit news field. Witness the recent launch of the Colorado News Collaborative, which brings together 100 journalists from 60 non-profit news organisations as a way “to ensure more comprehensive coverage at a time of diminished resources”.


A Plan of Action

Yet philanthropic support is no panacea.

While the number of non-profit news outlets is growing, their ranks are far outpaced by newspaper closures in every US state. Hedge-funds such as Alden Capital now control half of America’s daily newspapers: they ‘save’ newspapers only to harvest profits through staff cuts until eventual closure. Even when the 2,300 new non-profit news jobs are added, total US newsroom employment has declined by 26,000 since 2008.

The story is similar in the UK. In 2010, the New Statesman reported that 40,000 mainstream journalism jobs had been lost over the previous decade – roughly one-third of jobs in the industry gutted.

Although access to philanthropic-supported media websites is free, non-profit audiences are remarkably similar to the paid subscribers of quality commercial media such as The New York Times. As a result, non-profit outlets end up mostly producing news for elites, further widening the digital information divide. Though, to their credit, some foundations are beginning to shift their priorities to serving economically and racially marginalised audiences with news that affects their communities.

Foundation support is also fickle, focused more on starting than sustaining. While some foundations have signalled their willingness to provide long-term support, most will inevitably move on in search of the next big thing. The majority of grants are project-based, supporting journalism not as a civic end in itself but as a vehicle to promote the foundations’ policy agenda. While journalists retain formal autonomy, if they want to renew their grants, they need to stay on good terms with their foundation sponsors.

As these shortcomings have become more apparent, and as the COVID-19 crisis further accelerates newspaper closings, even philanthropy’s strongest advocates in the US are now acknowledging the need for more direct Government support.

Three broad policy approaches are gaining attention. The first seeks to expand existing charitable tax breaks to increase funding for the news. A University of Chicago Business School report has proposed a “voucher programme” modelled on the provision of public funding to candidates for US President: citizens would only need to indicate on their tax form that they want to participate and a $50 contribution would be provided to their chosen outlet without adding to their tax obligation.

Providing more targeted aid, the ‘Local Journalism Sustainability Act’ – with bi-partisan support in Congress – would provide taxpayers with $250 refundable tax credits (more generous than existing tax deductions) that they could use to buy a news subscription or donate to a local news non-profit; it would also provide employers with additional refundable pay-roll tax credits to help them hire more journalists

A second approach addresses the problem of concentrated hedge-fund ownership. One proposal combines anti-trust enforcement with tax incentives to make it easier for the hedge-funds to divest themselves of newspapers so that community groups can more easily buy them.  

A third approach would build on the already-existing public television and radio infrastructure to support more local news reporting: expanding Government funding for already existing public media, while difficult, is more likely to gain traction than starting from scratch elsewhere. This initiative could learn from the BBC’s Local Democracy Reporting Service, which has financially supported 150 local journalists employed by other news organisations.

In sum, a pluralism of forms of ownership and funding can contribute to a more pluralistic public sphere. In the US, philanthropic funding is prominent because public funding is so small, and yet it’s still not enough – and the strings attached can be prohibitive for journalists. Sure, philanthropy should be part of the mix, in both the US and UK, but in its quest to revitalise public service journalism, I hope the UK won’t take for granted its long tradition of strong public funding – it’s a legacy the US is increasingly desperate to emulate.

Rodney Benson is department chair and Professor of Media, Culture, and Communication at New York University. This research is part of the UK component of the Media Influence Matrix, set up to investigate the influence of shifts in policy, funding and technology on contemporary journalism, funded by the Joseph Rowntree Charitable Trust. It is due to report in summer 2021

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