Animated disagreement between coworkers is a venerable tradition often denied to Bright Hall's far-flung, break room-less staff. Advise & Dissent is an attempt to fix that. Click here for past debates
, and click here to read Matt Negrin's first post on non-profit newspapers
Perhaps some journalists will head to work tomorrow (assuming they still have a job) rather relieved: A new bill, introduced on Tuesday by Sen. Benjamin Cardin, D-Md
, would allow struggling broadsides to declare themselves as "non-profit," pursuant to the U.S. Tax Code's guidelines for 501(c)(3) organizations.
In English: Newspapers could take the form of universities, as proposed on The New York Times' op-ed page in January
, and similarly sustain their enterprises through endowments.
The analyses that have accompanied the news of Cardin's proposal have accurately attributed to the new business model
one important downside: Newspapers who self-declare as "non-profit" cannot endorse political candidates for office, among other political activities. Unfortunately, that is hardly the only side effect of such a switch. Non-profit status, which has served some media outlets rather well, could actually prove quite harmful to newspapers in the long term. Here are two reasons why:
1. Investment incentives? -
- If Zachary Seward's estimates are correct,
it will require at least $114 billion to guarantee the short-term survival of every struggling American newspaper -- approximately one-seventh of what the United States conferred to homeowners in its recent stimulus package. Of course, the non-profit model proposes that private investors, not the federal government, would provide the funding to endow journalistic enterprise writ large.
But therein lies the problem.
Even if it's true that a cadre of news enthusiasts anticipate the opportunity to sustain the sagging "fourth estate," their philanthropy will hardly be even handed
. The Times' tested college endowment analogy explains why: Despite a manifest concern for the future of higher education, philanthropists most commonly offer their coveted cash to colleges likely to produce notable successes and breakthroughs. In those academic settings, innovation underpins investment; investors have the greatest incentives
to donate only to the best.
Applied to the news industry, however, it is hardly "the best" who require dire financial assistance. Both the Rocky Mountain News and the Seattle Post-Intelligencer's collapse this year elucidate that it is the lack of innovation, not the incidence of it, contributing to the medium's decline. Therefore, if money flows in the direction of those most capable of evolving, small, local papers will still stand to suffer (a truth to which the American university system can also well attest). And that's the exact scenario Cardin designed his bill to reverse.