Nonprofit angel wings

Sometimes, contra Jeff Jarvis, philanthropy is the answer to journalism's problems

Digital professor and provocateur Jeff Jarvis recently tweeted, “Every time a rich person gives to a nonprofit, a journalism startup loses its wings.”

My fear is, every time a professor wings his analysis of nonprofit journalism, a startup loses its rich person.

I admire my friend Jarvis and have learned a great deal from him over the years. Beyond his captivating arguments, he’s earned influence by putting hours and energy into the less-sexy task of developing business models for digital journalism. But this argument, which I’ve heard versions of over the years, misunderstands the nature and role of nonprofit media: He suggests that tech tycoons should put their money and energy into helping commercial news innovation, rather than nonprofit journalism. This analysis suffers from several false premises:

“Nonprofit” equals unsustainable “charity.” Jarvis’ main point is that rich tech folk should focus on for-profit ventures because: “Charity doesn’t scale. Sustainability does.” But this conflates a few things. “Nonprofit media” is not the same as “charity” nor are nonprofits inherently unsustainable or small. Among the flimsy little nonprofit news organizations of the past were the Associated Press, National Geographic, NPR, and Consumer Reports. And the internet era has brought us a little piker called Wikipedia. Come to think of it, there is some good work being done by sturdy (nonprofit) journalism schools.

Jarvis is absolutely right that too many nonprofits and foundations haven’t thought through the sustainability strategy, just as some digital startups never developed a business model beyond, “go viral and hope Yahoo buys me!” The Knight Foundation’s sustainability initiative via the Investigative News Network is well timed.

But in other cases, nonprofits can teach commercial websites a thing or two about sustainability. When newspapers started collapsing because they were overly dependent on advertising, local public radio sometimes fared better because they had spent decades cultivating direct relationships with listeners. You may call those small donations charity (boo) but those recurring annual payments look an awful lot like subscriptions (yay). In some cases, muscular nonprofits have the ability to be just as sustainable as for-profits because they have several of the same revenue sources—advertising, events, subscriptions—while adding a fourth stream, donations.

Donations to nonprofits would divert money away from commercial enterprises. Jarvis says that given finite amounts of money, “I prefer to see that precious resource go first to sustainability” by which he means the wealthy should aid commercial ventures, not journalistic nonprofits. My experience trying to raise money for both for-profit and nonprofit projects is that most rich folks do not sit there with one pile of money trying to decide whether to put it into commercial ventures or philanthropy.

Rather, they have two pots—one is for projects that they think will make them massive amounts of money and the other is for charity, whether it’s fighting hunger, saving whales, or investigative reporting. Yes, the winners of the new media economy should, as the professor suggests, “bring their innovation and investment to news, to teach us how to see and exploit new opportunities to improve news and sustain it.” This is for making loads of money. And they should also put philanthropic dollars into the parts of the media ecosystem not being met by the commercial sector. This is for getting into heaven.

Nonprofits are an unfair threat to commercial enterprises. Some argue that nonprofits should stay out of the way of the commercial sector as it goes about the business of finding the real solutions to the journalism problems. Well, I, for one, am glad that the folks at Wikipedia did not say, “we stand down for a while and let the folks at Encyclopedia Britannica have at it.” If the new economy has taught us anything, it’s that innovation and sustainability can come from all sorts of places, and we should let a thousand apps bloom. And if nonprofits are really so fragile, they will pose no threat to a commercial entrepreneur who has devised a lucrative new way to do great journalism.

Beyond that, nonprofit media can often help for-profit media. Many commercial news operations will tell you that they have found ways to produce all sorts of news but can’t come up with models for very labor-intensive journalism on a significant scale. Being able to team up with a nonprofit media outlet may enable them to produce and distribute good journalism, at a lower cost, which means their business models become more sustainable, not less.

In the end, despite Jarvis’ general critique of “charity” journalism, he does say that some of his best friends are nonprofits. He offers several excellent suggestions, including that “Philanthropy should support that which the market will not support.” One such area on which we can all agree: labor-intensive accountability reporting, especially on the local level. Commercial media models have so fair failed to solve this problem.

Thanks to a deluge of online metrics, editors can plainly see that this type of reporting rarely generates enough traffic to cover the costs of creation, even if they have tremendous civic value (i.e. making a city less corrupt, or schools better, or water more drinkable). This is exactly the kind of “market failure” that the philanthropic sector should be addressing, and it is an area of finite dimension. Indeed, we need philanthropists to double their contribution in this area, not cut back. A meaningful increase in philanthropic giving actually could have an enormous impact.

Good journalism needs all the help it can get, which means a robust combination of both commercial innovation and philanthropic support. Angels, after all, need two wings to fly.

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Steven Waldman is founder of, co-founder of Beliefnet, and a former newsmagazine journalist. Tags: , , ,