Staff Pick: If a Free Press Can Strengthen Our Democracy, Who Will Strengthen Our Free Press?

STAFF PICK

Funding the News: Foundations and Nonprofit Media

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PUBLISHERS

Shorenstein Center on Media, Politics and Public Policy at the Harvard Kennedy School

Northeastern University's School of Journalism

FUNDERS

Barr Foundation; Heising-Simons Foundation; Media Impact Funders

QUICK SUMMARY

The analysis of more than 6,500 grant makers suggests the money they are pumping into journalism-related ventures is neither advancing the media's democratic function nor filling the gap left by rampant newspaper closures.

FIELD OF PRACTICE

Journalism and Media

WHAT MAKES IT STAND OUT?

Many foundations commission and produce reports assessing the impact of their funding. Sadly, precious few make these kinds of report public, particularly in cases like this in which there is a focus and diligence on identifying the gaps, pain points, and insufficiencies of the existing funding. This comprehensive review of the foundation funding flows offers both a helpful snapshot of the top funders, and funding trends, while also providing an honest assessment of what is needed to improve the effectiveness of these efforts.

The report is arranged into three parts: section one charts the growth of the nonprofit news sector leading up to the 2016 election; section two provides a detailed analysis of 32,422 journalism and media-related grants totaling $1.8 billion distributed by 6,568 foundations between 2010 and 2015; and the final section highlights the report’s main findings and gives the reader a sense of the direction of the field with a look at significant emerging initiatives.

Introductory context also helps clarify the severity of the situation, and after reading the gloomy financial picture of the media landscape it is enough to make anyone wonder how philanthropy alone can turn things around. For example, at the beginning of the Internet era in 2000, ad revenue for print advertising in newspapers reached $67 billion. In 2014, adjusting for inflation, digital and print revenue yielded only $20 billion, meaning that once you adjust for inflation, newspapers were making less revenue than they did in 1950! This field-wide crisis set the stage for a number of resourceful journalists to create a variety of local and national nonprofit digital news start-ups, which were mostly supported by donors and foundations. However, this led to a “Darwinian” ecosystem of support that created more challenges than solutions given the state of competition, local economies, and “the fickleness of funders.”

Other media funding challenges that the report surfaces include:

• A “Pack Philanthropy” culture in which a few nonprofits are able to quickly scale due to large investments from a number of foundations, leaving others financially vulnerable with too little support;
• The new field of start-up journalists had little experience running nonprofits and were not savvy at donor cultivation or diversifying revenue streams;
• The tendency among foundations to finance innovative start-ups with “seed funding” only to move on before the start-up is equipped to overcome the funding deficit;
• Because foundations tend to generally be risk-averse, convincing them to fund news start-ups is a hard sell;
• According to an API survey conducted in 2015, 52 percent of funders reported they make media grants in areas where they want to affect public policy, and a third of funders indicated they fund media in order to advance a “larger strategic agenda” indicating there may be pressure on news nonprofits to align their work around the political objectives of their funders;
• Local news has been particularly hard hit as most small, place-based funders and community foundations lack the expertise or track record in funding local media, and this has led to the creation of “nonprofit media deserts” outside of the large metro areas on the East and West Coasts where most large foundations that support media are based.

Highlights of foundation funding patterns between 2010 to 2015 include:

• The largest funder of nonprofit media related activities is the Freedom Forum giving nearly $175 million in funding, almost all of which goes to support the museum activities of the Newseum, which it operates;
• The second largest funder in this area is the Knight Foundation with approximately $133 million in support of a broad array of journalism activities, including being the leading funder for the majority of start-up news nonprofits with $53 million given to such activities, and Knight also accounts for a 20 percent of all grant dollars supporting local/state nonprofit news;
• Approximately half of all funding was earmarked to established, “legacy” media nonprofits such as public radio and television stations, and long established magazines;
• An estimated $331 million or 19% of all foundation funding supported mostly newer, digital nonprofit media including national nonprofit news organizations, local nonprofit news organizations, and university-based media;
• Foundation funding for public media tends to be highly concentrated across a small number of grant recipients. About two dozen recipients accounted for 72 percent of all foundation funding to public media;
• Ten states accounted for 83 percent of total foundation funding to public media indicating that large regions of the country lack access to nonprofit news apart from what might be provided by public television and radio;
• Nationally, news nonprofits depended on about two dozen foundations for nearly 70 percent of the grants awarded.

The report provides an open invitation for a greater variety of donors to become involved. The transparency a report like this provides is a good strategy to motivate additional funding for the ambitious goal of sustaining a robust press in order to preserve the health of our democracy.

KEY QUOTE

“A final concern voiced among those we interviewed is that patterns in foundation funding to date reflect ‘elites supporting elites,’ financing those nonprofit journalism initiatives most likely to be consumed by audiences who already read the New York Times or Washington Post and listen to NPR. Our findings specific to the concentration of funding within a few national news nonprofits, the disproportionate focus on the environment and health as subjects, and deep geographic disparities in funding that favors the East and West Coasts all suggest there is merit to these critiques. Apart from these geographic differences and subject biases, several of our interviewees not only expressed concerns that minority and ethnic communities are being underserved, but also that women who found or run news nonprofits are receiving insufficient funding in comparison to their male counterparts, a likelihood that merits further analysis.”

--Janet Camarena