Nieman Foundation at Harvard
HOME
          
LATEST STORY
Spain’s Eldiario.es has 18,000 paying members, and its eye on the next several million
ABOUT                    SUBSCRIBE
Sept. 19, 2012, 10:55 a.m.

A reason for optimism in the IRS’ handling of nonprofit news orgs

The San Francisco Public Press has finally, after 32 months, been granted 501(c)(3) status — a positive sign for its peers still waiting.

Editor’s Note: This update — from Digital Media Law Project director Jeff Hermes — got lost in the shuffle on Friday afternoon, so we’re reposting it here. The takeaway: There’s a reason to be a little more optimistic about the IRS granting nonprofit status to news organizations.

I am very pleased to be able to share the news that, after more than two and a half years, the nonprofit San Francisco Public Press has finally received recognition of its tax-exempt status from the IRS under Section 501(c)(3) of the Internal Revenue Code.

It’s good news for the future of nonprofit orgs looking to provide general-interest news.

For a while now, the Digital Media Law Project has been tracking numerous instances of journalism nonprofits delayed at the IRS in their efforts to obtain Section 501(c)(3) status. This status, among other benefits, allows a nonprofit to receive tax-deductible donations from charitable foundations and private donors. The ability to receive such donations is critical for the survival of many nonprofit organizations in their first years, and the San Francisco Public Press has had to struggle along without these donations for longer than just about anyone else stuck in the IRS process — a whopping 32 months.

Although the IRS has not commented on the specific reasons for these delays, the agency has historically been skeptical about granting 501(c)(3) status to nonprofit journalism and publishing organizations. In the past, it has required these organizations to demonstrate that they are organized and operated for an educational or charitable purpose beyond disseminating news to the public like a traditional newspaper. (For much more information on this topic, see our guide to IRS treatment of journalism nonprofits.)

As a result, the Public Press might have been facing significantly more scrutiny at the IRS than some other news projects — particularly those able to point to educational activity in the form of a teaching program or a focus on research via data-based or investigative journalism. In fact, several news centers focused specifically on investigative journalism have received their 501(c)(3) status over the last year. In contrast, as an organization focused on news of general interest, the Public Press would not have provided quite the same hooks for the IRS to latch onto as these other nonprofits.

This is not to say that the Public Press does not engage in research or investigative work; to the contrary, they work with dozens of professional journalists and volunteers to develop incisive and important accountability reporting. However, the Public Press’ application for 501(c)(3) status would have presented the IRS more squarely with the question of whether the dissemination of news is itself educational. And to everyone’s benefit, the agency has now recognized that the Public Press does serve a critical educational function in a media landscape with gaping holes in news coverage and numerous underserved communities.

Although the IRS did not explain its decision to the Public Press, with luck this represents a positive shift in the agency’s attitude toward journalism as an educational endeavor. We will continue to follow developments in this area.

Originally posted on Harvard’s Digital Media Law Project blog.

POSTED     Sept. 19, 2012, 10:55 a.m.
SHARE THIS STORY
   
Show comments  
Show tags
 
Join the 15,000 who get the freshest future-of-journalism news in our daily email.
Spain’s Eldiario.es has 18,000 paying members, and its eye on the next several million
“We have a potential of six million readers. You may not convince all six million people to be your socios, but if you learn more about their interests, you can get closer.”
Chasing subscriptions over scale, The Athletic wants to turn local sports fandom into a sustainable business — starting in Chicago
“It’s very easy today to be click-driven and produce articles that don’t have a lot of substance or depth and don’t cost that much to produce, but that dynamic is disappointing for fans who want higher-quality content.”
Hot Pod: We now have new, free rankings to show how podcasts stack up against each other
Plus: Parsing the RadioPublic announcement; premium podcast subscriptions; Bill Simmons oversimplifies things.
What to read next
0
tweets
Hot Pod: As more podcasts become TV shows, can their founders retain creative control?
Plus: Podcasts as time-shifted cable TV; MTV News launches its first podcasts; Postloudness moves beyond Mailchimp.
0The Hindustan Times is working to build the definitive online source of real-time air quality in all of India
In addition to pulling in data from government stations for its map, the organization is deploying and testing its own air quality sensors across the country.
0A new growth area for foreign reporting: podcasts? With reporters in-country, GroundTruth hopes so
“There’s pretty much nothing, as far as I can tell, in terms of real, international, on-the-ground reporting in the world of podcasting.”
These stories are our most popular on Twitter over the past 30 days.
See all our most recent pieces ➚
Fuego is our heat-seeking Twitter bot, tracking the links the future-of-journalism crowd is talking about most on Twitter.
Here are a few of the top links Fuego’s currently watching.   Get the full Fuego ➚
Encyclo is our encyclopedia of the future of news, chronicling the key players in journalism’s evolution.
Here are a few of the entries you’ll find in Encyclo.   Get the full Encyclo ➚
Foursquare
Hacks/Hackers
Time
Plaza Pública
Sports Illustrated
The Daily Show
GlobalPost
Bloomberg Businessweek
Investigative News Network
I-News
Sacramento Press
Media Consortium