June 27, 2009
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There’s a new conventional wisdom about foundation-funded journalism: It’s going to be bigger than most anyone imagined.

How big? Well, no one is suggesting it will become the dominant business model of the news-and-information world –- even though it’s far from clear what this new marketplace will look like in a mature digital world.

But, to a degree that has surprised many people, foundations and philanthropy have ramped up in multiple ways to fill fast-emerging information gaps or create entirely new ways of producing news that citizens need.

“Philanthropic foundations are increasingly embracing the idea that journalism projects can be a funding fit,” said Jan Schaffer, director of American University’s J-Lab.

One notable trend is the increasing presence of community foundations in backing local nonprofit journalism -– a niche the Knight Foundation is pushing and that shows signs of fast growth. Another is the accelerating expansion of investigative reporting nonprofits, especially at the state and local levels.

Many of these groups are gathering in New York starting today to explore the creation of a national investigative reporting network –- a co-operative that could go a long way toward filling gaps created by the slashing of for-profit investigate reporting staffs.

A little more than a year ago, nearly three dozen journalists, academics and foundation leaders met in New York to talk about the role of foundations in a journalism world that was becoming increasingly threatened.

The group’s conveners –- the Center on Communication Leadership and Policy at USC’s Annenberg School for Communication, and the Joan Shorenstein Center on the Press, Politics and Public Policy at Harvard University –- wanted to know if philanthropy might ramp up as mainstream news businesses faltered. The answer, the group surmised, was “quite possibly.” But there was also skepticism about whether foundations would provide much of a safety net for news and information.

What they couldn’t know at the time, of course, is how quickly the news industry’s decline would unfold: the closing of two major newspapers, the descent of others into bankruptcy, the massive layoffs of journalists and closing of bureaus. “When we had the meeting last year we saw a need,” said USC’s Geoffrey Cowan, one of the conveners. “But now we’re in a state of desperation. The collapse of the traditional economic model has increased both the need for nonprofit journalism, but also the receptivity toward it.”

I circled back recently with the people who attended this meeting, and found that many had recalibrated their assumptions of what foundations and philanthropy might achieve.

Alberto Ibarguen, who directs journalism’s most important funder, the Knight Foundation, says he’s been talking quietly for the last two years with some of the nation’s biggest foundations, and believes several of them may get into journalism funding in a significant way. “I think it’s safe to say there’s a growing understanding you can’t run a democracy without a free flow of information,” he said.

Alex Jones, director of the Shorenstein Center, also is aiming for a big philanthropic response. In his new book, “Losing the News” (Oxford University Press), he calls for a $2 billion endowment for PBS’ “NewsHour,” arguing that this could supply the nation with a critical piece of high-quality national and international coverage that would be available to all.

Neal Shapiro, president of New York’s WNET-TV, says foundations need to enlarge their thinking about the kinds of resources journalism may need. “I think they can be a (substantially bigger) player and in many ways they may have to be,” he said.

Many already are.

Somewhat to their surprise, the big investigative reporting nonprofits are seeing a resurgence of interest from funders; some, like the Center for Public Integrity, are even getting unsolicited calls from foundations wondering if they might play a role in financing investigative reporting.

“New funders have come to us, in part because they see what’s happening,” said Bill Buzenberg, who runs the Center for Public Integrity. “They’re as worried as we are about the watchdog function.” Buzenberg recently informed his board of two new major grants, and expressed optimism about future foundation gifts.

New investigative reporting operations are springing up in significant numbers. The latest is the Center for Investigative Reporting‘s launch of a California unit that will focus on education and other public policy issues. With grants of $1.2 million each from the James Irvine Foundation and the William and Flora Hewitt Foundation, CIR hopes to hire as many as 10 journalists to staff the new center.

The California startup is but the latest example of investigative reporting groups being established on a state or regional basis. Two other nonprofits, the Wisconsin Center for Investigative Journalism and the New England Center for Investigative Reporting, are up and running, and they represent the promise of a much larger collection of state and regional nonprofits focusing on watchdog reporting.

In fact, the CIR’s Robert Rosenthal and Buzenberg now think they might bring together all the regional operations into a network that could offer operational efficiencies and a common Web portal. What’s particularly striking about the conference they launch today to discuss this idea is how many new names and players are part of the mix –- groups like the Rocky Mountain Investigative News Network, InvestigateWest and CIR’s new California operation.

There are many other examples of new nonprofits charging into the investigative reporting world. Arianna Huffington recently announced the launch of Huffington Post Investigative Fund, with aspirations of a $1.75 million budget. There’s also David Cohn’s Spot.Us, the e-Bay style buy-and-sell model that taps the crowd for both story ideas and support.

There are university models like the Schuster Institute for Investigative Journalism at Brandeis University and the Investigative Reporting Workshop at American University. And, increasingly, there are community-based Web sites like Baltimore’s Investigative Voice, which have investigative reporting as their primary mission and could attract new foundation support. The Associated Press recently gave philanthropy-supported investigative reporting a shot in the arm, announcing it would disseminate the work of four of the largest organizations.

Health foundations are leading the way on another front –- the establishment of single-topic news organizations. The prototype is Kaiser Health News, formally launched June 1 by the Kaiser Family Foundation. With a staff operating mostly out of Washington, D.C., Kaiser Health News will spend an estimated $2 million this year, and eventually $4-5 million with a full-time staff of about a dozen.

Kaiser isn’t alone. The California Health Care Foundation, for example, recently approved $3.5 million to launch a news unit affiliated with the USC Annenberg School of Journalism that will focus on health-care policy issues in California. Michael Parks, USC journalism professor and former Los Angeles Times editor, is heading that effort.

Kaiser Senior Vice President Matt James, who oversees Kaiser’s health news service, said the decision to launch the news service was simple: “If nonprofits don’t find a way to invest in certain kinds of journalism, we’re not going to see that journalism anymore,” he said.

Although few sectors are as well funded as the health-foundation sector, this phenomenon is almost certain to spread to other fields as well -– the arts, science, environment, education -– all areas that have seen a fairly rapid decline in the news resources mustered by mainstream media.

That developments such as this are happening at a time when foundations and philanthropists have sustained massive losses in wealth makes them all the more impressive. At the same time, it’s important to note that they remain a pin prick against the tens of billions of private-sector dollars that now sustain the legacy news business. Several people I spoke with remain skeptical that foundations and philanthropy will be much of a factor in the developing news ecology.

Tom Curley, chief executive of the Associated Press, said entrepreneurs are still the people most likely to find solutions to whatever information gaps develop. The AP, he said, would need $6 billion “to endow its core agency operation. Entrepreneurs are moving too fast to plug gaps.”

New media consultant Merrill Brown says the work of foundations is “noble and important,” but he worries that it’s also a “distraction for how journalism is going to thrive in the future… It’s more important to get the advertising growing,” he said.

Bill Kling, of American Public Media, the second-largest producer and distributor of public radio programming, urges foundations to stick with their traditional role of encouraging innovation. “I have yet to see a viable business model that gets you from start-up to significance in a time frame any foundation could sustain,” he said.

For the time being, though, it appears that foundations are forging ahead, moved perhaps by the decline in news resources they see in their own communities. Some other evidence of this trend:

  • Community foundations are finding a funding cause with the rise of news Web sites in their hometowns. Foundations the likes of Berks County Community Foundation, the Boston Foundation, the Community Foundation of South Alabama and the Coral Gables Foundation are providing relatively small amounts of money to local news startups, but their funds go a long way in supporting these mostly low-cost operations. J-Lab counted $128 million in community foundation funds going to local news sites and investigative reporting operations between 2005 and 2009, and that number is certain to grow — helped along with a $25 million Knight Foundation program.
  • Non-governmental organizations are continuing to move into the journalism realm. An example is Human Rights Watch, which has established a video news unit to convert its academic-type reports on human rights violations into news packages. Carroll Bogert, Human Rights Watch’s associate director, said she has no worries about mustering the credibility to deliver the news even as the group acts as advocate for human rights. “I would say that in general, we do much more than journalists do to assure we have the facts right,” said Bogert.
  • Journalism schools are increasingly taking up the slack in reporting community news. The Web has given students the opportunity to develop neighborhood-level news in their communities in addition to their more traditional offerings of campus newspapers and broadcast outlets. At USC, where I work and teach, students are involved in at least three neighborhood Web projects that are serving news-deprived areas, in addition to a community-wide local news site. Additionally, students are now in constant demand from mainstream news organizations to buttress their flagging staffs.

It’s impossible to guess where all this will go, but it’s clear there are many avenues open to foundations or philanthropists interested in making a mark in the world of new media. New models may emerge. The Goldwater Institute, a conservative think tank, may be foreshadowing one model by advertising for an investigative reporter who will track wasteful government spending.

What’s more, it’s unlikely the main impetus for foundations’ growing interest -– severe retrenchment in mainstream news coverage –- will abate anytime soon. Consultant and Syracuse University journalism professor Vin Crosbie says we may be entering a Gray Age of information, in which legacy news resources recede much faster than new business models can be created. If so, the foundation-funded news wave may just be starting.

David Westphal is executive-in-residence at the Annenberg School for Communication at the University of Southern California. He is a senior fellow at the Center on Communication Leadership and Policy. Previously, he was Washington editor for McClatchy Newspapers.

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David Westphal is executive-in-residence at the Annenberg School for Communication at the University of Southern California. He is a senior fellow at the Center on…
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