28th March 2019
By Tom Law

Nonprofit journalism: can foundations object to the stories they fund?

Nonprofit newsrooms expanded rapidly in the United States after the dark days of the 2007-2009 financial crisis. More than 100 investigative and public interest news organizations launched between 2007 and 2017. The Institute for Nonprofit News today has more than 200 member organizations across North America and there are an estimated 110 news nonprofits that do not belong to the institute. The unprecedented growth could not have occurred without funding by foundations, which provide about 60 percent of the revenue for nonprofit journalism. An institute report estimated the combined revenue of its members in 2017 was almost $350 million.

Are the ethical guidelines that apply to commercial journalism with their focus on advertiser revenues appropriate for foundation funding? Broad guidelines exist for the nonprofit sector, but ethical grey areas abound and are seldom openly discussed.

Bill Birnbauer is an Australian former journalist and scholar who wrote a book called ‘The rise of non-profit investigative journalism in the United States‘ and here explores some of the awkward questions that can arise.

Bill Birnbauer

While conducting interviews with several American foundations that fund nonprofit investigative journalism, I met a program director who was most upset about a story published by a nonprofit news site that the director had funded.

The story led to the resignation of an agency official over the use of taxpayer-funded credit cards. The foundation director had a good relationship with the official, thought the amounts were trivial and that the story was overblown.

“It is a real question of what rights do we have as funders to say ‘we hate what you’re doing and we’re funding it’, or object to something that we think is unjust,’’ the director said.

I won’t go into the details here because the director did not want to be identified, but the experience raised questions in the program director’s mind about the relationship between foundations and nonprofit news organizations.

How might a foundation take on its grantees without stomping on freedom of the press? What rights did funders have to object? What did nonprofit news organizations owe their funders? Was it a good idea to have nonprofit journalism that relied on donations?

The questions raised are difficult and remain largely unaddressed in the nonprofit news sector other than in broad guidelines for funders and nonprofit newsrooms developed by the American Press Institute and a standard reference to a so-called firewall – editorial decisions should not be influenced by financial considerations – by the Institute for Nonprofit News.

But they are important given that about 60 per cent and often more of the revenue of nonprofit news organizations is provided by foundations. Foundations usually want something. They either want media reporting of an issue they fund through other grants or that they care about, and in some instances, they have democracy or journalism programs. It is not unusual today for foundations to fund the reporting of an issue such as education or the environment at a news nonprofit.

That kind of support in itself, some argue, distorts editorial decision-making by editors. That may be true, however, without such funding important issues of public interest probably would go unreported. That foundations have agendas should be neither surprising nor seen as a negative. Foundations want to change or improve things in their areas of interest; funding journalism often is a small part of a larger strategy for doing that. Some journalists may feel that such an arrangement would taint the purity of editorial decision making, but it needs to be recognised that the nonprofit sector’s business model differs from that of the commercial media. Foundations and funders are the business model, though an increasing number of sites have increased earned revenue and membership incomes.

That there have been attempts by foundations and wealthy individuals to initiate and influence stories, there can be no doubt. The Center for Investigative Reporting’s Robert Rosenthal told me: “I have had foundations approach me and want us to work with advocates for considerable amounts of money…” Nonprofit veteran Charles Lewis said: “I had murky characters come to me offering me money.’’

These approaches were rejected because the editors essentially had the same values, ethics and practices as professional journalists in the legacy media. And they worked in relatively wealthy nonprofits. But what of smaller outfits that might be less financially secure? “No one is in a financial position to say, ‘You know what, thank you for offering that $300,000, $400,000 to us, we’re okay; ethically we feel that is troubling’,” a former executive director of the Institute for Nonprofit News said.

The journalism of nonprofits such as the International Consortium of Investigative Journalists, ProPublica, Mother Jones and many others has enlivened a tenet of democracy by expanding the production and accessibility of civically important journalism. Nonprofit news organizations have shown that they can produce stories, datasets, and visualizations that mainstream newspapers and broadcasters simply do not have the resources, expertise, time, or culture to create. They have won journalism’s top awards, including Pulitzer Prizes, and their stories have reached millions of readers.

In a chapter on ethics in my book, ‘The rise of nonprofit investigative journalism in the United States’, I conclude that:

The nonprofit news sector differs from mainstream journalism and that difference ought to be acknowledged in the ethics that apply. What may seem questionable at a newspaper – such as advertisers suggesting story topics – may not be so at a nonprofit site because foundations do not have a commercial incentive. Foundation funding of health, environment, or criminal justice topics creates more quality journalism that is good for an informed citizenry as long as the funding is transparent and funders do not determine the content of the stories. That is a line that should never be crossed.

To return to the program director’s questions, if foundations are unhappy with the direction of the journalism their funding produced, they can refuse to renew their grants. Independence remains a key tenet of journalism whether it is on a commercial, public or nonprofit platform.