Fund journalism, not tax status: Local for-profit newspapers deserve a share of philanthropic support

The tax status of the organization producing journalism should not determine whether that journalism is worthy of philanthropic support.”

Dean Ridings, president and CEO, America’s Newspapers

It is past time to recognize and support the main providers of local journalism — for-profit newspapers. The tax status of the organization producing journalism should not determine whether that journalism is worthy of philanthropic support.

The overwhelming majority of local journalism produced in America today is being done by newspapers. Northwestern’s Medill Local News Initiative reported that almost 70% of local sites and community outlets were for-profit enterprises. This research acknowledges that newspapers have been losing staff and publications, but also notes that new digital outlets frequently don’t replace the breadth of coverage provided by newspapers. Many new nonprofit outlets concentrate on specific subjects such as education, health, environment or politics, while newspapers provide general-interest local coverage — with the breadth and depth of coverage that the community needs.

The real question isn’t whether nonprofit journalism deserves philanthropic support, and my unqualified answer is that it does. My question is why the tax status of the organization producing journalism should determine whether that journalism is worthy of philanthropic support. Philanthropy can and should help preserve existing capacity and not just try to create new capacity.

There is also the misconception that new nonprofit news outlets may be the answer for the future of local journalism. While we all want an answer to journalism’s sustainability problem, so far, nonprofits haven’t experienced any more success than their for-profit counterparts. Additionally, well-intended philanthropists hoping to save local journalism can inadvertently favor communities that already have philanthropic wealth. Most often, small, rural communities are served by a for-profit newspaper, and if it closes, nothing replaces it, as those communities rarely have the necessary philanthropic infrastructure.

America’s Newspapers has conducted research among its members about their operating margin, a key metric used by for-profits and nonprofits alike. Many of our members report net income ranging from break-even to 10%. Clearly, even a small amount of philanthropic support can make a significant difference in their sustainability, and even limited support can mean that a community continues to have quality journalism. While nonprofit and for-profit news organizations both continue to seek digital growth, the print component that remains important to for-profit newspapers continues to provide a significant revenue stream. That combination of print, digital and philanthropic revenue can provide a more stable foundation for sustaining local journalism. Creating an entirely new nonprofit operation would take considerably more funding, but with no clear improvement in sustainability.

We don’t have to choose between nonprofit journalism and for-profit journalism. America needs both! Nonprofit newsrooms have an important role to play, just as family-owned, independent and other for-profit newspapers do. Our goal here is simple: we need more journalism, more communities covered and more sustainable news organizations.

Most of us believe that journalism is a public good, and philanthropy should support the journalists and the journalism — and not the tax status of the organization that employs them.

Dean Ridings is president and CEO of America’s Newspapers, which represents and advocates for family-owned, independent and group-owned newspapers across the United States. He welcomes your emails at dridings@newspapers.org.