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Sept. 6, 2017, 11:11 a.m.
Business Models

Are nonprofit news sites just creating more content for elites who already read a lot of news?

When NYU professor Rodney Benson began a study of the different types of media ownership, he was struck at first by the unique American-ness of nonprofit news. As he began interviewing people who worked at nonprofit news outlets, though, he discovered something else that seemed strange.

“I was struck by how market-oriented they were,” he said, recalling a visit to The Christian Science Monitor. “They didn’t have the pressure of maximizing profits, they didn’t have the same pressures you have at a commercial news organization, and yet they didn’t seem all that different from the commercial media.”

Last week, The Guardian and The New York Times each launched philanthropic arms that will try to raise foundation money to fund stories on certain issues. This is in addition to the many outlets that either launched in the past 10 or 15 years as nonprofits (The Texas Tribune, ProPublica, MinnPost, The Marshall Project) or decided to become nonprofits (Honolulu Civil Beat, The Tulsa Frontier). All the stories we’ve written about nonprofit news ventures make it clear that these sites face many of the same pressures as for-profits. They’re trying to build well-educated audiences and raise subscription revenue. They worry about traffic. They partner with for-profit news organizations on stories.

The nonprofit model has some obvious benefits — such as the ability to publish important stories that market forces might not otherwise support. But it also raises new questions and pressures.

“It’s a Catch-22,” said Benson, NYU’s department chair and professor of media, culture, and communication.”The foundations are asking nonprofit media to be [financially] sustainable and to have impact. Those two things don’t go together easily.”

In a new paper, “Can foundations solve the journalism crisis?,” Benson looks at the role of nonprofits and foundation-supported news organizations in the U.S. today, exploring the benefits and shortcomings of the model. (The full paper is paywalled here. It was funded in part with a grant from Sweden’s Ax:Son Johnson Foundation — with “no strings attached,” NYU specified.) I spoke with him about his findings; our conversation, condensed for length and clarity, is below.

Laura Hazard Owen: What first got you interested in this topic?

Rodney Benson: This is part of a larger study of media ownership that I’ve been working on for the last few years with some colleagues in Sweden and France. I went in thinking that nonprofit media was something that was really distinctive about the U.S. media landscape, but that was in the context of thinking about the range of types of ownership of media — nonprofit, stock market–traded, privately held, and public media.

But then I was interviewing some people in the foundation world, and at The Christian Science Monitor, and I was struck by how market-oriented they were. They didn’t have the pressure of maximizing profits, they didn’t have the same pressures you have at a commercial news organization, and yet they didn’t seem all that different from the commercial media. That was what motivated this.

Owen: What do you mean when you say they were market-oriented?

Benson: They were using Chartbeat and other kind of audience metrics. At the Monitor, they wanted to reduce the subsidy from the church and figure out ways to get more money from audiences or advertisers. But it seemed to me that what made the Monitor unique was precisely that they didn’t have to worry about things like that.

I was also struck by the way a lot of people in the foundation world talked about [funding nonprofit news]: They weren’t in it for the long run, only to help the media make the transition to the market.

It seemed to ignore the problems that got us here in the first place. If the market was providing this kind of news, we wouldn’t need the nonprofits. I think those dilemmas are fascinating.

Owen: You’ve studied the composition of the boards of directors at commercial news organizations, foundations, and nonprofits. You found that “financial elites dominate the oversight of all three types of organizations,” and there are a lot of Ivy League degrees. How does that change the kind of content that’s produced? And if — as you write — “philanthropic support mostly reinforces and extends an upper middle-class, pro-corporate orientation in mainstream American journalism,” what’s lost?

Benson: I think what a lot of foundation-supported media are doing is providing quality news to audiences that are already getting a lot of quality news. That’s not a bad thing, but I don’t think they’re addressing the problem of the broader lack of public knowledge in the larger citizenry.

The motto of a lot of the foundation-supported media, even though they don’t have these business pressures, seems to be about providing quality news for quality audiences, in the sense of the demographics of high-income, high-education audiences. That’s felt when they get from foundations: This mantra that they have to be sustainable. And how can you be sustainable? You have to find a niche audience, large or small donors that will pay, or corporate sponsors. I think that compromises your ability to reach a larger audience.

It’s a Catch-22. The foundations are asking nonprofit media to be [financially] sustainable and to have impact. Those two things don’t go together easily. How do you have impact? Often, these organizations create partnerships with commercial media. Usually they just give it away because the commercial media won’t pay for it. That allows them to reach a larger audience, but it also ties them into the larger commercial media system because they have to produce content that the commercial media are going to be comfortable with.

They’re asked to be sustainable, and to be sustainable, they have to wean themselves off foundation funding, because the foundations say they’re not in it for the long run.

The other sources of income are paying audiences, subscriptions, corporate sponsorships, and advertising. Then they’re really targeting what they publish to this high-income, high-education audience, which makes them virtually indistinguishable from niche commercial media. I feel the potential for nonprofits to offer a radical alternative to commercial media is being lost.

Owen: Do you have any examples of a nonprofit that you think is doing a really good job at providing the radical alternative?

Benson: One good example I often give is San Francisco Public Press, which launched with the motto that it wanted to be the “Wall Street Journal for working people.” It’s really bent on providing quality in-depth investigative reporting but also figuring out a way to distribute that to low-income neighborhoods and reach beyond the usual suspects. One of the ways they try to reach a broader audience is by continuing to print a newspaper, since a lot of the poor and working poor don’t have regular online access.

There aren’t that many nonprofits that are trying to do that. More typical is something like the MinnPost, which has been very explicit about the fact that it is not about maximizing its audience but about reaching that elite audience.

Owen: You write about the weakness of public broadcasting in the U.S. How different do you think the findings of your paper would have been if we had more money going to public broadcasting here? Do you think our lack of a strong public broadcasting system has contributed to the growth of nonprofits here?

Benson: The amount of funding that we get for the Corporation for Public Broadcasting and PBS and NPR is really minuscule compared to funding in virtually all of the western European countries — just over $3 per capita compared to $100 in the U.K., $135 in Germany, $177 in Norway. Even when you include foundation and individual donors, the total funding for public media in this country is less than $9 per capita.

Public media in Europe is not niche media. You look at SVT in Sweden or ARD in Germany and they’re reaching 30 to 40 percent of the population, with big audiences across public platforms. There is a big difference between the U.S. and Western Europe in terms of the diffusion of public knowledge.

I do think the nonprofit media is more developed in the U.S. than elsewhere. I think there is a sense that the commercial media’s not providing everything we need and the path to strengthening our public media has been blocked, so there’s all this energy that’s gone into the nonprofit sector. Let’s not kid ourselves: It’s not sufficient. It’s a good supplement, but it’s not sufficient to deal with that market failure.

Owen: Your paper looks at some of the problems with foundation funding in general. I’ll quote a big chunk here:

Foundations’ support for a “multiplicity of overlapping and competing organizations insure[s] that protest will remain fragmented.” According to [sociologist Joan Roelofs], the “aim” of foundations “is to support forms of activism that do not seriously challenge the power structure.” Everything is on the table as a potential “cause of the troubles” — “inadequate participation, unresponsive government, inadequate schools, unimaginative political leadership training,” etc. — except the “institutions of capitalism.” The result is ultimately a “mass movement” of “fragmented, segmented, local, non-ideological bureaucracies doing good works, and on top of it all, dependent on foundations for support.”…

Any examination of recent foundation media grants — notably to commercial as well as nonprofit news organizations — provides support for both generous and critical assessments of the sector. Diversity, especially ethnic-racial and linguistic, remains a special focus, mixed in with efforts to encourage in-depth reporting on poverty, inequality, health, the environment, and global development. The language of grants, however, is always tempered and stops short of systemic critique.

Do you get the sense from talking to people within the foundations that they are aware of or concerned about this?

Benson: I don’t think it’s in the forefront of their minds. I’m hoping that this research can begin to put that issue on the agenda.

I don’t know that it’s the conscious intention of the people in the foundational world, but I think there are these structural effects. I’m sure that they get so many requests for funding, and their hope is to kind of plant seeds everywhere and hope something is going to sprout. But I think the structural effect of it is, in fact, to not build the momentum that you would need to really fully address any of these issues. There is a kind of structural incentive for foundations not to fund really radical structural reforms, or to really get behind broader transformation of the capitalist system. They’re looking for policy fixes that, in a way, take this larger status quo as a given, and look at ways to make the given system work better than it’s working right now.

Owen: In the past week, we saw The New York Times and The Guardian launch philanthropic arms that will seek foundation funding to report on certain issues. What do you think of initiatives like that?

Benson: I think it could be a good thing. Why not try and kind of figure out ways to support quality journalism? We’ve seen this before. The Huffington Post had a nonprofit wing, and the foundations for some time have been giving money to commercial media. The Ford Foundation and others have given money to the L.A. Times. In that case, I think it’s more disturbing, because the L.A. Times is part of a larger company that’s been massively cutting the quality of the journalism at the news organizations it owns, so in a way this foundation funding enables them to continue in that larger strategy even while it possibly allows them to do some quality work. It doesn’t challenge the logic underlying those larger commercial news organizations.

The New York Times and The Guardian are already operating in a way that’s insulated in some ways from market pressures, and that moves them maybe more in a logic they’re already moving toward. But I think the larger problem remains: Are they going to use that foundational support to figure out ways to extend their reach to new audiences and to audiences that aren’t already getting a lot of high-quality news? I think that’s one of the big questions.

Owen: In the conclusion of your paper, you write:

Foundation-supported nonprofit news media are thus deeply incorporated into the U.S. hyper-commercialized system of news production and circulation, in which most of the public is provided a steady menu of infotainment and sponsored content, while a small sector of in-depth (limited) critical news remains largely within the provinces of high cultural capital elites. While this kind of elite news might have generated a powerful agenda-setting effect in the past, the politically polarized fragmentation of the contemporary American media landscape makes it more likely that quality news will indeed be consumed mostly by “quality” audiences. This is a loss both for the elites, who may not be adequately informed about issues of concern to non-elite publics, and for younger and less-educated citizens who would benefit from more professionally vetted, in-depth reporting and less extreme partisan news, ‘fake’ or otherwise.

How do you think we can improve the system?

Benson: One of the problems that I identify is the way that foundations are moving increasingly toward project-based funding over long-term organizational funding. If the foundation world itself could acknowledge the importance of long-term organizational funding, that would be, I think, progress.

Also, developing a code of conduct for foundations and large donor contributions, so it’s clear that they are not going to try to interfere in the work they support.

Another idea is broader, small donor networks to support media. If there’s a way to harness some of the energy that’s gone into supporting political campaigns, could that be harnessed on behalf of nonprofit media that would be reaching a very broad audience?

And finally, even though it’s a nonstarter at the moment in the U.S., renewing efforts to increase public funding — a form of funding that draws from the entire populace and provides an incentive for news organizations to provide content that reaches out to a broad public. A lot of the problems that U.S. public media has have come from its reliance on high-income donors and corporate sponsors. It’s kept the audience small. I keep hitting on that theme, but it’s a key thing.

I interviewed someone at a foundation who said: Look, really, foundations are not a good way to distribute cheap public goods. This money that could have gone into the tax coffers has instead, through tax breaks, gone into the foundational world, and the foundation officials have no accountability for how they disperse that money. A lot of people who work in foundations are very conscientious, but they have tremendous power and there’s very little oversight of that. There’s very little reporting on the philanthropic world; there’s not much a philanthropy beat at most organizations anymore. Yet this sector is growing; its power and scope are growing. We treat it as if it’s this unalloyed kind of good, but it’s more complex than that.

Photo of macarons on sale at Whole Foods Market by Dennis M used under a Creative Commons license.

POSTED     Sept. 6, 2017, 11:11 a.m.
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