DMI Blog

Karin Dryhurst

Nonprofit Newspapers: Why Not?

Steve Coll of The New Yorker recently called for philanthropists to lead the way in funding endowments for newspapers in order to maintain the watchdog role of investigative reportage. He points to Warren Buffett, a director of The Washington Post Company, who could pay for a Post endowment with five percent of his net worth.

Though it has found a new crop of defenders, the idea of newspaper endowments is nothing new: it follows decades of thinking on non-profit newspaper models, as Nikki Usher pointed out at the Online Journalism Review in December.

But the important question to ask is why has the endowment model failed to provide more than one lasting reputable newspaper? Coll points to the reluctance of media families. But many of the media barons, like the Chandlers of the LA Times and the Bancrofts of The Wall Street Journal, have exited the industry as profits have plummeted and left skeletal news staffs behind.

Coll misses the fact that even newer owners of newspapers have not promoted an endowment model, but instead have looked to capitalize on social media following the examples of Facebook and Twitter. A statement by one panel member at a Davos discussion reflects the outdated paradigm that newspapers must follow for-profit models.

“How do you compete when they have a different business model?” Jonathan Nelson, C.E.O. of Providence Equity Partners, said of social media. “It’s not even clear that they have for-profit models.”

Apparently, Nelson didn’t catch the dig made by Robert Thompson of The Wall Street Journal in October: “The newspaper business has actually been non-profit for quite a while now.”

I've argued in this space before that President Obama would be wise to help revive the ailing news industry, especially as a part of his pledge to promote the diversity of media ownership. After decades of industry reluctance to adopting new models, perhaps the push should come from the government.

While a newspaper bailout like that of France would raise questions about editorial content and independence, the alternative can't be the death of local newspapers.

The government must create incentives for changing the newspaper business model to one that focuses on the public good rather than advertiser interests.

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Posted at 10:24 AM, Feb 03, 2009 in Media
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