In April of 2011, nonprofit news organization ProPublica was awarded its second Pulitzer Prize in two years, highlighting the growing importance of nonprofit media models -- a model some hope could represent a sustainable future for journalism.
In order for a media outlet to be officially considered a nonprofit in the United States, it must be granted 501(c)(3) status by the IRS. This is easier said than done. According to a Poynter article from February, there currently exists a two-year backlog for media outlets applying for nonprofit status. This means that there are many media organizations that have adopted nonprofit, or mostly nonprofit business models, but that have not been granted a nonprofit tax status.
The Digital Media Law Project (DMLP) says that one of the factors delaying the IRS process is that in order for an organization to be granted 501(c)(3) status, it must apply as an educational organization rather than a journalism organization, reported the Nieman Journalism Lab in March. On April 2, the DMLP released an interactive guide meant to help journalism organizations navigate the process of applying for 501(c)(3) status.
So all of this begs the question, why go nonprofit in the first place? According to the chairman of the Texas Tribune, John Thornton, the Texas Tribune chose a nonprofit model because more traditional forms of revenue like subscriptions and classified advertising have declined due to an ailing economy and to the prevalence of cheaper alternatives. ProPublica also cited a lack of traditional revenue in its choice to become a nonprofit organization. According to ProPublica, investigative journalism has suffered the most from newsroom cuts, giving nonprofit newsrooms a chance to fill that watchdog role.
Also, some nonprofit media projects, such as Mother Jones, claim to be less biased than traditional media as they say that they are less beholden to corporate interests. Similarly, many Latin American nonprofit news sites, like Plaza Pública in Guatamala, have emerged in order to escape the corruption that plagues the traditional Latin American media, said Plaza Pública editor Julie Lopez.
However, status as a nonprofit media outlet does not immediately guarantee balanced reporting. According to the Pew Research Center, the most neutral non-profits “[tend] to have multiple funders, more revenue streams, more transparency and more content with a deeper bench of reporters.” In contrast, the most ideological nonprofits tend to be funded by one, parent organization, explained the Knight Center for Journalism in the Americas.
Funding is extremely important for nonprofit journalism, as it not only “makes or breaks” a media organization, but it is also a key indicator of the integrity of its content. The most successful non-profit media sites rely on a diverse source of income , reported the Knight Center. Mother Jones relies on magazine subscriptions, donations, and ads. The Texas Tribune “is supported by individual contributions, major gifts, corporate sponsorships, and foundation grants. The Tribune also generates earned revenue from events and specialty publications,” the organization said.
Nevertheless, the Texas Tribune was recently accused of bias by blogger Stephen Robert Morse when it ran a story about Texas A&M Chancellor John Sharp without disclosing that A&M is a corporate sponsor of the Tribune. In order to avoid similar controversy, some editors like Michael Stoll of the nonprofit SF Public Press say they are committed to a small-donor system, according to PBS Mediashift.
Even faced with the recent success of nonprofit media organizations, critics like media consultant Alan Mutter still claim that the non-profit media model is unsustainable. In 2010, two award-winning nonprofit news sites, The Washington Independent and The New Mexico Independent, folded because of financial troubles.
Last year in an interview with the Knight Center for Journalism in the Americas, Peruvian journalist Gustavo Gorriti commented on the difficulty of securing sustained funding. Gorriti suggested in the interview that the creation of a model of “fair advertising” might be a viable funding option for nonprofit media in the future. In the meantime, partnerships between large, traditional media outlets and smaller, nonprofit news organizations, like that between NBC and ProPublica, have become popular.
According to PBS Mediashift, these partnerships provide much needed content for penny-pinched traditional outlets and a wider distribution for nonprofits that often lack solid distribution networks. Because of partnerships like these, nonprofit founders like John Thornton say they are confident that their publications will stand the test of time, despite the many challenges that still face them.