The opera, the ballet, the symphony… the newspaper? If you live in Utah, there might be one more nonprofit institution giving you a call in hopes of an end-of-year gift.
The Salt Lake Tribune is making waves in the journalism world by being one of the largest journalistic institutions so far to shift its business model and apply for nonprofit status. Nonprofit journalism is already a small but thriving sector, and it’s expected to grow as it becomes more and more difficult for traditionally for-profit news outlets to break even.
The Institute of Nonprofit News (INN), which is already nine years old, reports that there are about 200 nonprofit news outlets currently reporting in the U.S.1 The sector as a whole brings in $350 million in total annual revenue. 90% of the sector’s revenue comes from philanthropic support, though some of the 501(c)(3)’s are beginning to develop other revenue streams.2 One potentially troublesome fact is that on average, these newsrooms are only dedicating about one tenth of their resources into revenue generation (the oldest of these organizations spend about 15% of their resources on development).3
There’s also the matter of how the IRS classifies them – and what kind of coverage this enables nonprofit newsrooms to have. 39% of these newsrooms focus on investigative journalism, 23% on explanatory and analysis;4 people are wondering, will the Salt Lake Tribune still be able to cover the Jazz? The Tribune is applying for nonprofit status under the auspices of “Education” – is it sufficiently “mission-driven” to be educating people about local sports?
Fraser Nelson, the Tribune’s vice president of business innovation, says that the Tribune is essentially a mission-driven organization already. “Education, according to the IRS and the regulations we’re applying under, includes instruction of the public on subjects useful to the individual and beneficial to the community. That’s journalism in a nutshell, right?”5
Only time will tell as to whether the IRS feels the same way. The Tribune officially submitted its bid for 501(c)(3) status on May 30th, and now they wait.
Either way, their very attempt shows that the face of journalism is changing – for the better or for the worse? Assuming that the press does in fact provide a public good, it’s true that major newspapers aren’t all that different in function from nonprofit arts and cultural institutions. With social media gobbling up journalism’s previous ad revenue, times are tough and the papers (both analog and digital) are in jeopardy.
But is shifting to a nonprofit business model the appropriate answer? It might free the press of shareholder demands and a pesky tax burden, but will it actually make the press more… free? It’s long been recognized that news outlets have some kind of duty to their advertisers, which occasionally influences coverage, but how does that change when a newsroom is almost totally supported by major donors? How does that influence things politically? Will there be new parameters on what certain news outlets can and can’t say?
We want our newspapers – some of which, like the Tribune, are over a century old – to stick around, but we also want them to tell the truth. No matter who might be keeping them afloat.
Should the nonprofit business model and journalism mix? Is this a #PRWIN or #PRFAIL? #YouDecide.
Schmidt, Christine. “This Is the State of Nonprofit News in 2018.” Nieman Lab, 2 Oct. 2018, www.niemanlab.org/2018/10/this-is-the-state-of-nonprofit-news-in-2018/?relatedstory.
Schmidt, Christine. “Here’s The Salt Lake Tribune’s Plan for Securing 501(c)(3) Status.” Nieman Lab, 3 June 2019, www.niemanlab.org/2019/06/heres-the-salt-lake-tribunes-plan-for-securing-501c3-status/.