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The Chicago News Cooperative was a nonprofit news organization that focuses on public-interest journalism.
The Cooperative was launched in October 2009 by James O’Shea, a former editor at the Chicago Tribune and Los Angeles Times. It indefinitely suspended operations in February 2012 after a grant from its largest funder, the John D. and Catherine T. MacArthur Foundation, fell through in part because of tax classification concerns.
While the Cooperative was operating, it employed around 15 to 20 staff members, seven of them full-time. From its launch through February 2012, the organization produced a two-page, twice-weekly Chicago news section for The New York Times that was distributed in the Times’ Chicago-area papers. It also supplied content for the Chicago public television station WTTW, whose parent company is providing the Cooperative with its nonprofit status during its startup phase.
Part of the Cooperative’s initial funding was provided by a $500,000 grant from the MacArthur Foundation, with two additional $250,000 grants from the Knight Foundation and the Media Development Loan Fund.
O’Shea had planned to turn the Cooperative into an L3C, or low-profit limited liability company, though those plans were put on hold pending clarification from the IRS. The IRS’ delay in ruling whether news organizations were eligible as tax-exempt 501(c)(3) organizations reportedly led to the MacArthur Foundation’s decision to drop the Cooperative’s grant.
Many of the Cooperative’s initial staff members were former Chicago Tribune employees, which prompted some criticism that the new organization might not be innovative — a criticism that was also voiced after the Cooperative’s shutdown. O’Shea and other Cooperative staffers said the Cooperative was built around traditional journalism practices, such as city hall reporting.
The Cooperative planned to fund its operations through a mixture of grant money, advertising, and a membership model (at $104 per year) to eventually wean the organization from foundation funding. It also planned to emphasize niche content, such as an education “News Interest Network” and Early and Often, a site built around the 2011 city elections that charged an initial subscription rate of $175, as well other possibilities such as verticals built around arts and culture or health and science, though those plans did not come to fruition.
The membership system was loosely based on the idea of a traditional cooperative, though members won’t be paid dividends. Instead, the surplus revenue would be invested back into producing journalism, O’Shea said.
The San Francisco Chronicle is a daily newspaper owned by Hearst Corp. The Chronicle was founded in 1865 by the de Young family, which owned it until 2000, when it was bought for $660 million by Hearst, which owned the San Francisco Examiner and had run a joint operating agency between the two papers since 1965. Hearst…