A different kind of revenue, one that has nothing to do with advertising or subscriptions, is playing a larger role in journalism today.

Nonprofit funding, once largely the province of public broadcasting, is becoming an important source of support for a new cohort of non-commercial news organizations —  many of them digital natives — and a growing number of commercial news publishers, which are partnering with nonprofit media and in some cases accepting direct grants themselves.

But the ethics of taking grants from foundations and gifts from donors to produce news is still evolving and not without controversy. In New York, a major public TV station returned a large journalism grant for a documentary series because of the donor’s connection to the topic being covered. In New Orleans, a nonprofit media organization’s reporting about a university president may have cost the organization’s its office space at the school. In Texas, a nonprofit established new transparency rules after criticism that it was not revealing enough about donors and event backers.

The role of nonprofit media outlets also seems likely to grow. In Philadelphia, the new owner of city’s major newspapers is transferring ownership of the publications to a new nonprofit organization, a case being closely watched to see if it might become a model.

The ethics of taking grants from foundations and gifts from donors to produce news is still evolving and not without controversy.

All of this recently prompted former Columbia University Graduate School of Journalism Dean Nicholas Lemann to call in an essay in the New Yorker for firmer ethical guidelines so nonprofit media could “build trust with readers and media critics, and protection from editorial meddling.”

This report, by the American Press Institute, explores the ethical terrain of nonprofit journalism by examining the kinds of grants made, the nature of communication between funders and grantees, the existence of journalistic firewalls, and the prevalence of written guidelines. The report is based on two main elements: surveys of funders, nonprofit news organizations and commercial partners about a range of funding and ethical issues; and five essays commissioned by people from various media and foundation stakeholder groups that explore different areas of ethical complexity.

In a second phase, the study will be followed by recommendations for ethical guidelines.

The work was funded by the The John S. and James L. Knight Foundation and The Bill & Melinda Gates Foundation and conducted by API in collaboration with two partners, long-time nonprofit media executive Bill Buzenberg and former New York Times polling editor Marjorie Connelly.

Inside the new nonprofit media world

Percent of…
Media outlets who disclose funders at some level 99%
Nonprofit media who have written guidelines about funding 37%
Nonprofit media who have written guidelines on editorial independence 35%
Funders making media grants on issues where they do policy work 52%
Funders underwriting specific investigations or stories 59%
Nonprofit media who ever show content to funders pre-publication 4%

American Press Institute

The survey sample covered a cross-section of funders, nonprofit media and commercial news outlets. There is a higher representation of newer nonprofit media, many of them digital natives, that are not governed by traditional public broadcasting guidelines. Among commercial media, there is a higher representation of newspaper partners than other commercial media. We believe this work is the most comprehensive effort to date to explore the ethical landscape of nonprofit news.

The report finds relatively high levels of transparency about funding sources and what is being underwritten. There is little evidence that funders insist on or have any editorial review. Most never see content prior to publication.

A growing amount of funding is for coverage of specific problems and even specific investigations.

But the study also identifies a number of areas of sensitivity and potential controversy. Many funders, for instance, finance media in areas where they also do public policy work. A growing amount of funding is for coverage of specific problems and even specific investigations, not just general coverage areas or by providing more general grants for operations. There is a fair amount of variation in the nature of editorial communication.

And there are relatively few written guidelines establishing clear rules of editorial independence. A good deal of the protection of journalistic independence in the realm of nonprofit media is left to good intentions.

There is ample evidence that nonprofit funding of news has helped journalism. Charitable donations have spawned important work by outlets such as ProPublica, The Center for Investigative Reporting and The Center for Public Integrity (one of this report’s co-authors, Bill Buzenberg, is the former executive director of that organization). Nonprofit funding has subsidized creative and bold experiments in new and niche media by innovators such as InsideClimate News, Chalkbeat, and the The Marshall Project. It has helped create new robust local coverage by entrants such as The Texas Tribune, MinnPost and Voice of San Diego. It has forged new partnerships with commercial news outlets, who have embraced collaborations they once might have shunned.

But the growing realm of nonprofit media can be also strengthened by identifying where there are vulnerabilities that could undermine the editorial independence that will make the work produced more accurate and more credible.

Among the key findings from the surveys:

  • There are fairly high levels of public transparency about funding in nonprofit media. Nearly all (99 percent) of the media outlets surveyed — nonprofit and commercial — disclose their relationships with funders and collaborators in some manner — often by citing them within or alongside any story that has been underwritten.
  • At the same time, there are relatively few written guidelines governing nonprofit funding. Fewer than half of nonprofit news organizations (4 in 10) said they have written guidelines about what kind of funding they will accept. A third have written guidelines about what level of communication with funders is appropriate. As for funders, just 10 percent of those responding to the survey said they required grantees to have written guidelines detailing their editorial independence.
  • The absence of ethical guidelines about editorial independence may be even more striking because about half of funders (52 percent) make grants on issues about which they are also trying to change policy or public behavior. Only a few nonprofit media outlets surveyed, less than one in ten, have policies forbidding taking such grants. About a quarter of the nonprofits surveyed said they had never been offered this type of funding.
  • Funders can be quite specific about the journalism they want to underwrite. Six in 10 funders surveyed, for instance, say they have given grants in the last five years to finance particular stories, exposes or investigations–as opposed to general coverage areas. About a quarter of nonprofit media organizations said they have accepted such offers.
  • For all the specificity about what is being paid for, there is relatively little evidence of explicit editorial review by funders. Of the nonprofit media organizations that responded to the question, 96 percent said they never even show content to a funder pre-publication; just one outlet said it was a typical practice;  four said it happened rarely or only “sometimes.” Funders, however, were more likely to say they occasionally see content pre-publication, though it is not standard practice: 31 percent of those who answered said they “sometimes or rarely” see content prior to publication. Only two funders surveyed said they “usually” review editorial content before it is published.
  • Funders and grantees tend to describe the nature of their communication differently. Funders, for instance, are nearly three times as likely as their grantees to say they talk in some specificity about the work being produced, such as discussing specific stories or issues to be exposed (17 percent of funders versus 7 percent of grantees). Funders in turn are less likely (21 percent) to say they discuss coverage only in the most general terms than are grantees (34 percent).
  • Most grantees provide metrics about the impact of their work. Two-thirds of nonprofit news outlets, for instance, provide web traffic or social media activity, though only 4 in 10 funders ask for them. A number of metrics also involve information about impact, or whether the journalism is resulting in qualitative change on issues. A third of funders, for instance, say they request evidence that the public is more aware of an issue as a result of the work; about the same number say they look for a change in public opinion. About 4-in-10 nonprofits media outlets say they provide evidence of raised awareness or changes in public attitudes.
  • More foundations are funding nonprofit news organizations, and they are spending more money on media than they have before. For most funders, however, media is only a small fraction of their overall funding. Most nonprofits, on the other hand, rely on just a handful of  foundations, less than 10, for support.
  • For commercial news organizations, partnerships with nonprofit media appear to be more common than taking grants. Of the commercial media who had some involvement with any nonprofits in the past year, 70 percent said they had distributed content produced by a nonprofit media organization, and 54 percent  said they had worked together on reporting or editing content. In addition, 27 percent said they had accepted funding from a nonprofit.
  • The majority of commercial media who have partnered with or accepted money from nonprofits report they are doing more of it than they used to. Fifty-four percent said the number of partnerships with nonprofit of any kind have increased in the last five years. A quarter said the level of partnerships has stayed the same; just 7 percent said the amount has decreased.

In the end, one of the underlying issues regarding nonprofit funding of journalism involves the question of mission: To what extent are media funders and their media grantees and partners in this for the same ends?

Journalists usually see themselves in the business of making information public–though some of their work can be described as close to advocacy when they function as watchdog or investigator exposing wrongdoing.

Funders and foundations, on the other hand, may want to inform the public, but they may also be trying to drive toward particular policy outcomes.

Asked to choose which is closer to their media funding mission, just over half of funders who answered the question (54 percent) said they are mostly interested  strengthening a free press, but 4 in 10 (44 percent)  said they engage in funding of media to advance other larger strategic goals.

Their grantees also recognize that split: 51 percent of those media outlets who answered the question said they think their funders are in it to improve journalism; 41 percent to drive some other agenda.

To what extent are media funders and their media grantees and partners in this for the same ends?

The five essays commissioned by API and Buzenberg surfaced some additional issues and deepened the thinking on others:

For all the transparency that exists in this arena, for instance, Richard Tofel, president of ProPublica, argues there can be more. Both nonprofit and commercial media taking philanthropic support, he advocates, should disclose the sources of their funding and the amounts of all sizable contributions. “Without such disclosure, it is impossible for anyone to gauge whether the publisher is maintaining its independence in the face of donor pressures.”

Joe Bergantino, a co-founder of the New England Center for Investigative Reporting argues that national foundations in his experience have been totally “hands off” and “no strings attached” in their approach, but sometimes local foundations are more complicated. “In many cases, these foundations come from wealthy business owners who might end up being the subject of one of our investigations.”

Daniel Green of the Gates Foundation worries about funders being too specific about what they want underwritten. “But the answer,” he says, “is not in insisting that all grants be for general operating support,” or that foundations “avoid media funding entirely because critics might charge them with tainting independent media.” Green perceives a middle ground, where funding is governed by respected guidelines and best practices “to ensure that our grantees make content decisions based on editorial merit, not on the funding relationship.”

At The MacArthur Foundation, write Kathy Im and Peter Slevin, they are moving in a different direction — toward more general or unrestricted operating grants, to give media organizations the flexibility to “experiment and innovate at a time and place that they choose.”

And Alan Rusbridger, former editor of The Guardian newspaper, a commercial news operation, writes about receiving foundation support for special projects. “Does it cause us ethical dilemmas? Well, the dangers are obvious,” he says, but there is an important future for foundation funding of journalism. “It’s not a silver bullet. But it is, generally, a force for good. And no one has yet discovered the silver bullet.”

[pulldata stat=”54%” context=”of funders said they are mostly interested in strengthening a free press” align=”right”]

The growth of nonprofit funding in journalism is another dimension of the technological revolution that has disrupted media. As the advertising model in news media has suffered over the last decade, foundations and journalists have moved to fill what they consider important and growing gaps in coverage. Some of the funding has gone to new news organizations that are local or regional in focus. Others are national and international nonprofit news operations dedicated to specific issues or to investigative reporting. Some of these outlets are new, others are more established.

In the older advertising-driven model for news in the United States, the ethical mores were established over more than a century. A core insulating principle was variety: If a publisher had many different advertisers, the theory held, no one of them could hold great sway. Separations between advertisers and reporters were established and largely maintained.

In nonprofit news, the concept of variety is more challenging. Many nonprofits depend on a relatively small number of foundations for the bulk of their funds. And outside of public broadcasting, many of these nonprofits are fairly new, and the movement has not had a long period of time to create rules of the road.

About the study

While nonprofit media in the United States has been heavily represented traditionally by public broadcasting, the majority of new nonprofit news operators are digital natives, and often partner with legacy media on distribution. The survey sample in this study includes a variety public broadcasting stations and independent producers, but it emphasizes these newer players who operate more independently and outside traditional public funding and oversight.

To conduct the surveys (which were executed between May and November of 2015), API sent email invitations to a sample of foundations, nonprofit media organizations and commercial news organizations derived from various lists put together by professional groups and associations.

In all, more than 100 foundations and other grant making institutions, identified from different media funder lists, were contacted about the survey. Representatives from 76 funding organizations responded, 63 of whom reported that they fund news media activities. For nonprofit media, more than 110 organizations, also identified from different lists, were contacted; in all 94 completed the survey.[ref By various estimates, there appear to be somewhere in the neighborhood 170 newly created nonprofit news organizations operating in the country today. That number is aside from the more than 1,041 public radio and 365 public television stations listed by the Corporation for Public Broadcasting. There also exist a smaller number of nonprofit magazines, and a handful of news operations associated with educational institutions. This 170 number of new nonprofit media also is not stable. It rises or falls as many small organizations get started or cease operations. Our sample of nonprofit media organizations also includes a few organizations operated by universities and some public radio and television stations that produce news (many public TV stations do not produce original news programming on a regular basis). Thus with the inclusion of some public broadcasters and university nonprofit media, the sample of 94 nonprofit media respondents represents a large proportion of the new nonprofit media not governed by public funding and oversight.] Emails were sent to top managers at more than 650 commercial news organizations. Of the 146 who completed filled out the survey, 76 said they had partnered with nonprofit media or accepted nonprofit funding. The surveys were executed in stages between May 20 and Nov. 5, 2015 with the use of the online research software Survey Monkey.

The study is not a representative sample of all media-funding foundations, nonprofit media organizations or commercial media organizations in the United States. The precise size and scope of that universe are difficult to know. But the results provide  a useful reflection of the range of views and sentiments of people who are wrestling with similar problems and issues.

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