Not-For-Profit: Just Say No

The newspaper-saving meme of the week seems to be the notion that everything will get better if newspapers can simply be converted to non-profit entities, with endowments supporting them just like colleges and other charitable institutions.

There are some smart people bandying this notion about, but fortunately, there are also some smart people pointing out that it's not a particularly good idea, for myriad reasons. Alan Mutter, as is his wont, runs the numbers, and there's additional data from Zach Seward at NiemanJournalismLab (who's otherwise neutral on the subject). 

But the best takedown comes from Jonathan Weber of NewWest, who pretty much demolishes the idea point by point, and concludes: 

Journalists, like most people, would like things in the future to resemble things in the past, and a gentle billionaire seems like a good enabler of the journalistic norms that we are all accustomed to. But before we commit to that path, I say, give the entrepreneurs a chance. New business approaches will, ultimately, be a much better guarantor of quality journalism - and democracy - than sugar daddies.

Note also, as I pointed out a while back, that the St. Petersburg Times' ownership by a non-profit trust hasn't insulated it in the slightest from the problems infecting all newspapers.

Back to the drawing board, folks. Non-profit isn't the savior. In fact, non-profit is the problem: As Mutter and Weber point out, putting endowments behind businesses that increasingly aren't profitable to begin with isn't going to solve the core problems of the newspaper business. I sound like a broken record, but the real solution will come when newspaper executives start really focusing on how to build the digital business that will, inevitably, succeed their print business. Hint: Start with some of the great ideas advanced by Steve Outing this week.

Update: Dan Gillmor also throws cold water on the non-profit ownership idea.

Comments

[Jorge]

Has anyone talked to the folks from NPR or any news public radio station. Those are entities that are currently doing non-profit journalism. I wonder if these smart people who are touting the NP model have talked to people who are actually doing it.

[David Cohn]

I'm going to agree and disagree.

I 100% agree that getting some sugar-daddies to coddle these failing businesses is a bad idea. The last thing I think we need are these poorly run businesses to become poorly run nonprofits. That is my worst nightmare.

I think the main oversight in all this talk about endowments to save newspapers..... is the "paper" part.

But I do think nonprofits can help. Going nonprofit is one (of many) potential solutions.

I consider myself a journalism entrepreneur - but I'm running a nonprofit: http://spot.us. I think it could be organized as a for-profit as well - but my youthful naivete convinced me to go nonprofit. I don't think that was a mistake.

But again: I agree with you. Getting endowments for every major paper in the country isn't a solution.

I do think that an endowment for either the WaPo or the Times could work - but they'd still have to become leaner and meaner than they are today.

[Dave]

I couldn't agree more and Jonathan makes great points. As a volunteer I have helped helped non-profits raise money asking various donors and foundations for charitable donations. As a publisher of a mildly profitable local internet site who has gone on many sales calls, I can tell you that it's not any easier asking donors for money than it is advertisers for their money. Quite frankly, it would be far easier for me to ask for money for a social service non-profit than a news non-profit especially in these economic times with real people suffering much more than a struggling news organization.

As you and I have experienced, it ain't easy running a local media enterprise but I'll bet on the long-term viability of entrepreneurs over the viability of a broad base of non-profit news enterprises beyond a select few. I can assure you that some of the most creative ideas I've had in my career are happening right now as we try to make our little enterprise more successful. Necessity is the mother of invention as they say.

[ea]

My difficulty in turning newspapers into non-profits is that it would cement in the local advertising monopoly these institutions are enjoying. No for-profit enterprise would be willing to get into a fight with an entrenched non-profit because the tax advantages tilt the fight in favor of the non-profit. I contend we have already stretched the definition of non-profits by including fabulously wealthy institutions like the National Geographic. Giving newspapers non-profit status is great for the newspaper owners, but not so much for local businesses that need to have competition in ad services to continue to get their message out.

[McClatchy Watch]

Mark, let me point out newspapers are already non-profit.

Kevin Gregory
McClatchy Watch

[Mark Potts]

Kevin: While I'm tempted to be glib and write something like "That goes without saying," in fact many if not most papers are still profitable, on an operating business (though not as profitable as before). It's when their heavy corporate debt loads are factored in that things get ugly. Alas, too many companies, like McClatchy, took on enormous piles of debt to acquire newspapers at inflated prices in recent years, and that's what's causing so much pain now.