AJR  Features
From AJR,   February/March 2008

Nonprofit News   

February/March » As news organizations continue to cut back, investigative and enterprise journalism funded by foundations and the like is coming to the fore.

By Carol Guensburg
Carol Guensburg (carol.guensburg@verizon.net) is senior editor for the Journalism Center on Children & Families, a University of Maryland professional program - and a nonprofit. It receives primary support from the Annie E. Casey Foundation. Guensburg spent 14 years as an editor and reporter for the Milwaukee Journal Sentinel after working for three other papers.     

Since 1993, the Henry J. Kaiser Family Foundation has funded journalism training on health issues, including funneling up to $50,000 to a handful of fellows each year to support reporting projects. But, dismayed by cuts in newsroom staffing, newsholes and airtime — and the sketchy reporting that can result — foundation officials began kicking around other ways to ensure solid coverage of topics they consider crucial.

One possibility: a nonprofit health news service of their own. Matt James, senior vice president for the California-based foundation, remembers running the idea past longtime editor Bill Kovach, founding director of the Committee of Concerned Journalists and an adviser to Kaiser's media fellows program. James chuckles, a little uncomfortably, recalling the start of Kovach's generally encouraging response during a meeting last May. "He basically said, 'Five years ago...I would have told you to go to hell and shown you the door.'"

These days, foundations and philanthropists are finding a warmer reception.

Beleaguered journalists who once clung solely to the business model of paid advertising and circulation now recognize the urgency of developing new revenue sources for labor-intensive newsgathering. For some, foundations hold increasing promise as allies in meeting the public's information needs — beyond superficial headlines and celebrity sexploits — so long as there are safeguards for editorial independence.

"The fact of the matter is philanthropic institutions have provided millions of dollars over the years to help journalists do their work. Journalists have an unfortunate habit of not acknowledging that," says Charles Lewis, head of the nonprofit Fund for Independence in Journalism. From 1989 through 2004, he served as founding executive director of the Center for Public Integrity, which "raised and spent $30 million [on journalism projects] in the years I was there."

New forms of nonprofit, grant-funded news operations are proliferating. The lineup includes the Pulitzer Center on Crisis Reporting (see "Funding for Foreign Forays"), Brandeis University's Schuster Institute for Investigative Journalism, MinnPost.com (see Drop Cap) and at least two state-level health news sites (see "Healthy Initiatives"). The Washington Independent, freshly minted in January, joined the Center for Independent Media's network of four related sites in Colorado, Iowa, Michigan and Minnesota. And there are many more in the mix.

The highest-profile newcomer is ProPublica (propublica.org), an investigative news operation that opened shop in Manhattan in January (see "Big Bucks for Investigative Reporting"). California philanthropists Herbert M. and Marion O. Sandler dreamed up the project — which they're bankrolling at $10 million annually for at least three years — and hired former Wall Street Journal Managing Editor Paul E. Steiger as editor in chief. He and Managing Editor Stephen Engelberg, a former investigative editor at the New York Times, eventually will oversee a staff of about 25 reporters, editors and researchers charged with producing public interest stories of "moral force," as the Web site proclaims. These will be offered free to select news outlets, whose own staffs may join in the newsgathering, as well as being showcased on ProPublica's site.

The Sandlers, who made $2.4 billion when they sold the Golden West Financial Corp. savings and loan in 2006, have given millions to Democratic Party causes over the years, according to news accounts. That — and donors' often heightened emotional investment in money they've earned — prompted Slate media critic Jack Shafer to question Herbert Sandler's role as Propublica chairman (slate.com/id/2175942/ ). Even though the couple pledged not to interfere with editorial content, Shafer recommended that Sandler guarantee at least 10 years' funding and then resign his position, "so he'll never be tempted to bollix up what might turn out to be a good thing."

Some prominent media leaders and innovators have called for even more philanthropic support to ensure journalism's vital watchdog role.

Geneva Overholser, writing in "On Behalf of Journalism: A Manifesto for Change," urged a greater role for nonprofits in assisting news media. Her 2006 treatise advanced journalist Lewis' suggestion that foundations and philanthropists create a "Marshall Plan" to create more public-minded forms of news coverage. Grantmakers could "increase support for nonprofit media organizations" and "foster new nonprofit media models," wrote Overholser, a Missouri School of Journalism professor. She also recommended steps for corporations, journalists, government and the public.

Jan Schaffer, executive director of the interactive journalism incubator J-Lab, introduced a "Citizen Media" report (kcnn.org/research/citmedia_introduction/) last February by writing that community foundations should "be alert to real possibilities for building community capacity" by supporting citizen media. "Journalism alone will not suffice," she elaborated in a phone interview. "I think foundations and philanthropies will play a role in supplementing that information landscape."

Dan Gillmor, in a September 17 op-ed published in the San Francisco Chronicle (sfgate.com/cgi-bin/article.cgi?file=/c/a/2007/09/17/ED1OS4OIU.DTL) and timed for a Council on Foundations' conference there, urged community foundations to "put the survival of quality local journalism squarely on their own agendas." Gillmor — who in January launched the Knight Center for Digital Media Entrepreneurship at Arizona State University's Walter Cronkite School of Journalism — suggested measures such as paying the salary of a local investigative journalist or providing seed funding for a network of local blogs and media sites, adding journalism training for participants.

And Alberto Ibargόen, president and CEO of the John S. and James L. Knight Foundation, publicly addressed those San Francisco conferees with a like-minded appeal, warning: "If the citizens are unaware, then the democracy is in peril." Knight and the council will cohost a seminar February 20 and 21 on communities' information needs in a democracy. Up to 200 community-foundation representatives will meet in Coral Gables, Florida, to consider media trends, the digital revolution, gaps in coverage and how these might be filled.

Foundations see their growing involvement as compensating for newsrooms' diminished coverage of civic issues. They're stepping in because "the traditional news business is not investing as much as it needs to..in getting reporters out to cover stories," Kaiser's James pointedly notes. "We as nonprofits have a duty to figure out: Is there a role for us, in increased training, in direct partnerships with news organizations or even [in] creating a new news service to fill that void?

"What we're talking about is supporting real journalism, not advocacy," adds James, whose foundation already partners with National Public Radio, USA Today, the Washington Post and other news media on public opinion research projects. "We're big believers in the role of journalism in democracy. We believe it's important for nonprofits to find ways to support it."

With newspaper revenue tanking as classified and retail advertisers migrate to the Web and Wall Street tightens its grip, journalists are casting about for financial lifelines. Foundations have the wherewithal to throw some: By law, they must spend a minimum 5 percent of their net assets each year on charitable causes. In 2005, U.S. foundations granted $158 million for media and communications, the Foundation Center reports, though it doesn't break down whether the payouts went for journalism per se or marketing or research dissemination. Nor does that figure necessarily reflect spending on journalism-related education.

Journalism's funders include those affiliated with legacy news media — such as Annenberg, Scripps, Tribune, Reynolds, Gannett — plus longtime supporters like Carnegie, Ford and the Pew Charitable Trusts. (AJR has received support from the Freedom Forum, Ford, Knight, Pew and Carnegie.)

Knight, the leading journalism funder overall, announced more than $21 million in journalism grants in 2006 and more than $50 million in 2007, though some of these are multiyear grants and won't be paid out all at once. "There are years when we are not the largest [journalism] grantmaker," Eric Newton, its vice president for journalism initiatives, said in an e-mail interview. Since the foundation's start in 1950, it has invested nearly $300 million in U.S. and global journalism — emphasizing mid-career training in the 1980s, journalism education in the 1990s and digital media innovation in the current decade.

Knight has contributed to journalism philanthropy in another fundamental way. Shortly after joining the foundation in 2001, Newton — former managing editor of the Newseum and, before that, the Oakland Tribune — helped pull together an informal group of program officers from legacy media foundations and others interested in journalism. Participants included the Bill & Melinda Gates Foundation, which in November announced a three-year, $1.7 million grant to the International Center for Journalists to support Knight health fellowships in sub-Saharan Africa.

"We think all foundations should care about the information needs of communities in a democracy," Newton says.

Done right, the journalism-funder relationship benefits both parties as well as the public they aim to serve. It supplies important news resources, and it satisfies a grantmaker's mission — maybe even bringing a touch of prestige. Done wrong, the association raises concerns about editorial objectivity and whether it has been compromised by a funder's agenda.

It's instructive to look at, or listen to, NPR, perhaps the most successful model of nonprofit journalism. The privately supported membership organization derived a third of its revenue from grants, contributions and sponsorships in 2005. Its biggest revenue share (39 percent) came from programming fees paid by member stations, which conduct their own fundraising.

"We're always engaged in very constructive discussions with the world of philanthropy," says NPR President Kevin Klose, who describes himself as an active participant. The conversations emphasize editorial control, "the starting point for us.... One of the reasons why we are attractive to foundations and to corporate sponsorship is because of the integrity and independence of what we do. They wish to align themselves with that set of values."

They probably don't mind that their names, and information they care about, reach 26 million pairs of ears.

Klose says he engages with the foundation world not just to gain financial support. "It's also important to us," he explains, to learn "what people are thinking about. These are often very socially aware organizations that track issues naturally of interest to news organizations."

A sturdy firewall separates NPR's news and business operations. Barbara Hall spent more than 14 years on its fund-raising side, serving as vice president of development through late August 2006. (Near the end of her run her group generated more than $50 million a year, excluding a $230 million bequest from Joan B. Kroc in 2004.)

Over that time, Hall saw a shift in funders' strategies. "The best gift any nonprofit can get is unrestricted support. But the trend we've seen with foundations, and increasingly with individuals, is wanting to designate their support for specific issues and topics," says Hall, who left to head development for the Phillips Collection, an art museum in Washington, D.C. While "most foundations understand that news organizations are not advocacy groups," she adds, "now they're being very focused on what they're supporting and its impact."

"Funders may have their own interests — they often do," Klose says, but they can't dictate story focus. "We're very interested in philanthropic support of a whole range of activities: coverage of foreign news, coverage of children, family and education. We have a foreign desk, a national desk, a political desk. That's what people fund."

By designating funding, a grantmaker aims to raise the visibility of an issue or area and expand public knowledge.

The Carnegie Corp. of New York, for instance, gave NPR $200,000 last year to support education coverage. It began subsidizing that around the 2000 election, says Susan Robinson King, vice president of external affairs and director of the journalism initiative at Carnegie. Back then, NPR "had one reporter who sometimes covered education.... They were able with our money to hire a producer and really increase the level of reporting."

Dynamic social forces affect nonprofit journalism as readily as commercial news operations. Shifts in the economy boost or deflate endowments. Developments in research, demographics or regional politics, changes in leadership or board structure — all can affect attitudes and funding priorities. No wonder only a quarter of all grants get renewed.

I absorbed these lessons as founding director of Journalism Fellowships in Child and Family Policy from early 2000 through mid-2005. The professional development program, based at the Philip Merrill College of Journalism at the University of Maryland, awarded competitive fellowships for all-expense-paid conferences featuring expert briefings and skills training. Select fellows also received project support of up to $25,000 for six months. They contributed to scores of outlets, including NPR, the Chicago Tribune, the Austin American-Statesman, Reuters, Salon, Mother Jones, Reader's Digest, Portland's Oregonian, the Milwaukee Journal Sentinel, the Village Voice, WBUR-FM in Boston and Pacific News Service.

Ruby Takanishi, president of the Foundation for Child Development, a private philanthropy in New York, helped conceive the program and make sure it was funded generously. Her goal was to invest in journalists, particularly young ones who might have a more lasting impact in shaping the news, and "really improve the depth of reporting" on child and family policy, she says. Initially there was no limit to what fellows might explore in conference briefings or their own research: the impact of welfare reform on families, harsh "zero-tolerance" policies that criminalized youth, brain research on toddlers, the growing reliance on grandparents for foster care.

The expansive approach began to narrow after four years. The foundation had been concentrating its other funding on three subjects — children of immigrants, education from pre-kindergarten through third grade and an index of child well-being — and "some very strong voices on our board" wondered why these weren't getting more coverage from the news media, Takanishi recalls. The board decided the fellowship program's training and projects should be more clearly aligned with those issues for any future grants. At the time, we had a multiyear grant good through mid-2005.

I'd come out of newspapers, editing and reporting mostly on the features side. I tried to equate the tightening scope as something akin to the challenge of producing stories for the ad-driven annual dining guide or cruise travel section or the fall prep sports guide. With some effort, you could come up with fresh, worthwhile stories for the dedicated space. But there was a crucial difference: While it was relatively easy to develop briefings and story ideas for covering immigrants and early education, there was no guarantee of real estate or airtime in others' newsrooms.

Our program's compressed focus, combined with industry-wide newsroom cuts in staffing and newsholes, made the fellowships a tougher sell. In the end, my advisory board, my boss at the college of journalism and I decided to seek a final, yearlong grant — which we got — and then put the program to rest.

Most of the former fellows who'd gotten project support said their work wouldn't have proceeded as quickly — or at all — without financial assistance and guidance. Their comments dovetail with those of other journalists who've received fellowships elsewhere — from the Alicia Patterson Foundation, Kaiser and the New America Foundation, to name a few. Funding enabled them to report on issues they cared about passionately. And it's important work, judging from some stories' impact and honors.

Out of my program alone, for instance, reporting by Barbara White Stack of the Pittsburgh Post-Gazette ultimately led the Pennsylvania Superior Court to rule that child-welfare dependency courts should be open to the public. Eric Eyre of the Charleston Gazette, reporting with then-colleague Scott Finn, exposed the high social costs of school consolidation in rural West Virginia. That project, which documented schoolchildren's hours-long bus rides, slowed the consolidation movement and won the Education Writers Association's grand prize in 2003.

Over the years, newsroom leaders and staff repeatedly told me that outside funding from various nonprofit programs validated their journalistic ambitions for projects while delivering vital budget relief.

"It's made a huge difference here. The majority of the long-term investigative projects that we do here would not have been possible" otherwise, says Eyre, a nine-year veteran of the Gazette. The privately owned paper circulates 48,000 copies daily and 74,000 on Sunday. Eyre also won a 2006 Kaiser Media Fellowship in health, which equipped him to do a project on poor oral health in his state.

Colleague Ken Ward received an Alicia Patterson fellowship to examine the coal industry — in December 2005, a month before the deadly Sago mine collapse. He delayed starting the fellowship while contributing breaking stories, then used it to produce a Gazette series on U.S. mine safety and a Washington Monthly article on the Bush administration's mine safety policies. Investigative Reporters and Editors honored Ward's series with a medal — its highest award — and the PBS documentary series "Exposι" focused on Ward's work in a program originally broadcast in November. "We were pretty happy for them to do this," Ward says. "It certainly made us look good."

Editors in some other places endorse training but decline grant support for newsroom projects. If a story is important enough, they say, they'll find money for it in the budget. They don't want the merest hint of outside influence. Nor do they want to be constrained by a donor's funding scope.

In 2006, as editor of the Lexington Herald-Leader in Kentucky, Marilyn W. Thompson wanted her paper to undertake a major project examining Republican Sen. Mitch McConnell's political fundraising practices and suggestions of influence peddling. When she realized her lean newsroom budget alone wouldn't cover it, Thompson got her Knight Ridder bosses' enthusiastic approval to seek a grant from the nonprofit Center for Investigative Reporting. The California-based center provided $37,500 to underwrite the salary of reporter John Cheves, who took an unpaid six-month leave of absence to do the project, as well as to cover expenses.

Just before the October publication of Cheves' four-part series, "Price Tag Politics," McConnell staff members complained of liberal bias — at the center. They cited center board and staff members' donations to Democratic candidates or causes. They called it "a known liberal entity, but what they seized on was the underlying funding," Thompson remembers. In particular, the McConnell camp objected to involvement by the Deer Creek Foundation of St. Louis, which had funded groups seeking campaign finance reform. McConnell had led the fight against the bipartisan measure in Congress and in court. He was the lead plaintiff in McConnell v. Federal Election Commission, an unsuccessful U.S. Supreme Court challenge to the 2002 law.

By the time the McConnell complaints surfaced, both the newsroom's ownership and leadership had changed. In June, the paper had been acquired by McClatchy; in July, Thompson had gone to the Los Angeles Times as national investigations editor. McClatchy officials "brought me in on several conference calls" before deciding to reimburse the funder, Thompson says. Now an investigative reporter for the New York Times, Thompson says she was disappointed by the decision. Cheves' work — published that October — was excellent and error-free, she says, and "no one likes the suggestion that their reporting was in any way biased."

That was precisely why McClatchy's vice president for news, Howard Weaver, returned the center's grant. "I'm not uncomfortable with the journalism, and I'm certainly not uncomfortable with the journalist," the Herald-Leader quoted Weaver as saying at the time. "I just think that the relationship [with the outside groups] was sufficiently unorthodox that we don't need to do it."

The incident made a lasting impression at the center. While there always has been "a complete firewall" between editorial and fundraising, since then "we have made the case more strenuously to funders that we would prefer general operating support as opposed to project-specific support," says Christa Scharfenberg, the center's associate director. (Funding for the McConnell project had come from money Deer Creek had designated for campaign finance coverage.)

And in mid-December, the center's board voted to offer the executive director job to Robert J. Rosenthal, former managing editor of the San Francisco Chronicle. He accepted. "We decided the organization was ready to grow and evolve," Scharfenberg says. "We wanted an experienced, highly regarded journalist at the helm, which we think also will deflect concerns about the journalistic integrity of the organization."

Takanishi of the Foundation for Child Development believes foundations and journalists have "a shared future" because of the public's right to know. She also encourages "more critical coverage of philanthropy.... It exists in the public trust, so it should be open for examination." But "how do foundations, by making grants, [best] support journalism?" she muses. "How does journalism cover philanthropy? It's sort of biting the hand that feeds you."

Edward Wasserman, the Knight Professor of Journalism Ethics at Washington and Lee University in Lexington, Virginia, agrees that foundation handouts can put recipients at a disadvantage. "Who's going to do the story on the Knight Foundation?" he asks rhetorically, noting his own endowed teaching position. The funder does "a good but not infallible job. The news organizations that should be reporting on them can't," at least not impartially. "Most of the people in media have one eye out for where the money might be coming from."

The plight is a familiar one in many newsrooms, though with different players. Is there "any real difference between advertiser influence and donor influence on editorial sanctity? There shouldn't be," says Lewis, of the Fund for Independence in Journalism. A journalist in residence at American University, he maintains that nonprofit journalism ventures can "basically ensure transparency and credibility, sometimes more so than a commercial outlet does."

To preserve newsgathering integrity, nonprofits "must disclose their donors," Lewis says. "I happen to think it's important to have some discretion about whose money you accept. There are some other schools of thought about that," he acknowledges. "Make sure, to the extent possible, that the journalist inside the nonprofit newsroom doesn't have substantial interaction with the donors" — a condition he couldn't follow as both editor and publisher at the Center for Public Integrity, he admits.

Wasserman says he's especially uneasy with "an almost direct line between funder and news organization," a structure emerging in health news services. "I could very readily see that this opens the door for various trade coalitions to bankroll reporting that could in itself be perfectly OK, but, in terms of subject matter, would have a tilt toward topics of greatest interest to the funders: biofuels coverage funded by Archer Daniels Midland. You get into a murky area pretty quickly."

But Missouri's Overholser is less wary of foundations developing their own news media outlets. "There are a lot of ways to do journalism in the public interest," says Overholser, who also chairs the Center for Public Integrity's board and serves on a handful of other nonprofit journalism boards. "The only key here is transparency.... An educated consumer should be able to see who put [a report] together, who funded it, what are the underlying goals..... I welcome partisan information, as long as it's labeled. What worries me is deceit, when we get people playing on the public stage who don't acknowledge their money is coming from the left wing or the right wing.... We need to have some reliable sources whose goal is to be nonpartisan, to report whatever they find — no matter how unsettling to their funders."

Overholser, like others interviewed for this story, expresses confidence that nonprofit news operations will flourish. She believes these may even bolster their for-profit counterparts.

"I never for a moment think nonprofits are going to supplant commercial media," she says. "The existence of nonprofits can strengthen the journalism done by commercial media. Nonprofits can be more fearless, in some ways, because they don't have to worry" about offending the powerful or risking popularity.

Carol Guensburg (carol.guensburg@verizon.net) is senior editor for the Journalism Center on Children & Families, a University of Maryland professional program — and a nonprofit. It receives primary support from the Annie E. Casey Foundation. Guensburg spent 14 years as an editor and reporter for the Milwaukee Journal Sentinel after working for three other papers.