Are foundations the solution to the journalism crisis?

Article  by  François QUINTON  •  Published 25.03.2016  •  Updated 04.04.2016
Interview with Rodney Benson,associate professor in the Department of Media, Culture, and Communication at New York University.

Rodney Benson is the author of “The New American Media Landscape”  and “Are Foundations the Solution to the American Journalistic Crisis?

Why are foundations investing in media ? What are they aiming at?
 
Rodney Benson : First of all, I think there is a public service commitment to addressing various kinds of social problems. So I think there is an idealistic element there. But of course, there is also an element of control. These billionaires and these philanthropists are seeking to define how these problems are going to be solved. And their visions may not accord with what public policy might produce. But they have an outsize influence, because of their money, in directing local projects, in influencing national policy, in promoting certain kinds of information about these problems. It’s an agenda setting function. It’s a big problem across all sectors in the US today, because of the growing inequality and the recent Supreme Court decision that took off all the limits on campaign funding as well. So we see an incredible infusion of wealth into public policy. The foundations [+] NoteTop US foundations by assets X [1] are just one part of that.
 
 
What does foundations’ funding represent compared to other media’s sources of revenues?
 
Rodney Benson : If you look at all the money going into all types of news media – including subscriptions, advertising, etc. -- foundation funding is still only about 1 % of the total. Another way to look at it is that annual newspaper advertising revenues have dropped by $25 billion since 2006 and spending on editorial budgets have dropped by $1.6 billion. Foundations, at most, are putting back into journalism about $150 million per year. So, overall, it’s really a drop in the bucket.
For the nonprofits that do exist, they rely on foundations for more than a half of their money. I think it has made a real difference in supporting some investigative reporting outlets, such as ProPublica, the Center for Investigative Reporting, and others, that wouldn’t exist if it weren’t for foundations. So that has been a good contribution. The problem is that they are not a reliable long term source of funding for most nonprofits.
 
 
So do foundations focus on some kinds of media ? Nonprofit ?

 45 % of nonprofit media are clearly partisan 
Rodney Benson : Well, it’s interesting. Yes, they are providing funding for many nonprofits, but not all, and they are also giving money to many commercial media. One study showed that about 45 % of nonprofit media are clearly partisan. So a lot of nonprofit media are linked to conservative or left political agendas, and these media generally are not getting support from the major foundations (Gates, Knight, Ford, etc.). The other half of the nonprofits who are getting substantial foundation funding are really linked to mainstream American journalism and in some ways to the best traditions of The New York Times, The Washington Post, investigative reporting, etc. If you look at the leading nonprofits, the journalists that are there came from mainstream newspapers for the most part. One third of the journalistic workforce has been laid off in the US. A few of them at least have found jobs in the nonprofit sector. Paul Steiger, chief editor of ProPublica for many years, was previously The Wall Street journal editor in chief.

These foundation-supported nonprofit media are not really, for the most part, alternative or anticapitalist, but they are trying to carry on the best tradition of public service journalism that has been abandoned by traditional media.
 
 
The Gates foundation financed over 700,000 $ total to Le Monde in 2014 and 2015, do you know why ? Are there any counterparts ?

Rodney Benson : If you look at the description of the funding on the Gates Foundation website, the 2015 grant of over $400,000 was to support more overall “development coverage” and the 2014 grant of over $300,000 was to focus on innovation, health and development specifically in francophone Africa. The Gates foundation is very interested in development and health issues, so these grants are consistent with their general orientation. The strings attached are not direct. There is no “you should cover this issue in this particular way”. There is no directive as far as I know. What there is, with any funding, is an invisible line you probably should not cross if you want to get money a second time. You could burn your bridges if you want, but if you want a continuing line to your funding, you might be somewhat cautious about what you do with that money. You would certainly not want, for example, to criticize the specific kind of development work that the Gates foundation is doing, or the use of GMOs, which Gates has supported.
 
The Ford foundation, as well, has always had a big international component, so a lot of this foundation money is going outside of the US. The British media is getting some of the foundation money as well.
 
 
Such as The Guardian?
 
Rodney Benson : The Guardian, yes. It is in a way interesting to see how much of this money is going not to the “usual suspects” of nonprofit media but actually to mainstream, very commercial media. When you see a paper like the Los Angeles Times, owned by the Tribune Corporation, getting money (more than $500,000 from the Ford Foundation in 2014), that is disturbing in some ways. Because the Tribune Corporation is still driven by profit maximization. They have massively cut their editorial spending, their investigative reporting, they basically stripped their papers. And then, foundations in a way are enabling this, they are essentially saying: “Carry on, but here is some free money you can use to do some of that stuff you cut.” But there is no challenge from the foundations to the whole system that is resulting in this crisis of commercial journalism.
 
 The major newspaper companies are cutting staff in order to maintain their profits  I think that shows the limits of the foundations. In a way, they are enabling commercial media to still operate with business as usual and to focus on maximizing profits. One of the important things to emphasize in the US crisis is that most media are still quite profitable. The major newspaper  companies are still making 8 % to 15 % profits. And they are cutting staff in order to maintain their profits at that level.
 
They wouldn’t have to cut so aggressively if they didn’t have to please Wall Street stockholders.
 
 
Would you say foundation money reinforces media independence? Or maybe just for a certain period?
 
Rodney Benson : For the nonprofit media that are not getting any commercial revenues, it really depends on the foundations and the kind of relationship they have. The challenge in the US is that a lot of foundations are looking for the next big thing: they are driven by the fashion of the moment of what to fund, and they are always looking for innovation. So, the foundations, over the last ten years, they noticed a crisis in journalism and said: “We’ve got to do something about this”. Now, they are already beginning to move on, but the crisis hasn’t ended. The foundations’ idea was: “We provide a bridge to some new unspecified business model. We give you some money, and you have to figure out how to make yourself sustainable;  we are not going to be there forever.” So these foundations are not anti-market at all. The trouble is that the kind of quality journalism practiced by the nonprofits isn’t market-sustainable – that’s why they need the foundations to support them!
 
There are a few foundations that are different, such as the Sandler Foundation, which has made a long term commitment to ProPublica. I don’t think they’ll ever leave. They’re always going be there providing a portion of operational funding. That’s unusual. But I don’t think it’s coincidental that ProPublica is one of the strongest nonprofits. It also has very hard hitting investigative reporting, not just about government, but on business issues as well. So, if you can have a kind of angel investor like that, it makes a difference. Now some other foundations are starting to realize that it will be difficult to pull out completely. Otherwise many of these nonprofits are going to really crash.
 
What’s happening though is, in order to become sustainable, without big foundation support, the nonprofits are becoming much more elite-focused. So they basically say: outside of foundations, who are the big donors we can get? And they are looking to corporate donors, to small groups of relatively wealthy donors in whatever community they are serving. And that limits their agenda and also limits their reach. If you look at their audience, for a lot of these nonprofit media, it’s really very small.
 
Let’s say Huffington Post has 150 million unique visitors a month, then most public commercial media have 10 to 20 million at least. These nonprofits are in the thousands. ProPublica’s online audience is around 500 000. It’s not reaching so many people directly. So it’s nice it is there, but I think we should not overestimate its impact. And when they do have impact, they tend to partner with commercial media and give away that content. So, sometimes this can really work, but that doesn’t address their problem of funding.
 
 
Are there any other countries where foundations are so active in the media?
 
Rodney Benson : The US philanthropic sector is massive, I mean it’s nearly 2 trillion in terms of total assets. Nearly 100 foundations have assets of $1 billion or more (and the Gates foundation alone, the largest, has $44 billion in assets). I don’t think there is any comparable case elsewhere in the world. But there certainly are foundations operating in other countries. In Sweden ,foundations have long been major owners of newspapers [+] NoteNotable newspaper-owning foundations in Sweden include Tore G Wärenstams stiftelse, Stiftelsen Barometern and Nya Stiftelsen Gefle Dagblad.X [2]. But they are set up in a different way. You can have a foundation owning a commercial newspaper. But often their goal is to show continuity in their mission over time. So they are the exact opposite, in a way, of the American foundations driven by innovation, interested mostly in startups. In Sweden, the foundations are linked to political currents in society, and so basically a foundation will be set up, saying, for example: “Our mission is to assure that this newspaper will always be run as a liberal / right newspaper.” They have an ideological purpose, but they are definitely there for the long term. That’s their mission.
 
I think there is a role for public policy here. Maybe in the US case we can be looking at tax law and other kinds of incentives to encourage foundations to stay for the long term.
 
Take for instance the example of the Knight Foundation where they withdrew from funding PBS (the small US Public Broadcasting Service). They basically said: “You know, we love what PBS is doing, but they are doing the same thing and we are interested in new things.” Knight was very direct about that. It’s interesting to note that PBS news gets maybe a third of its money from the government, but this money is actually the most crucial and the least constraining. I witnessed the top editor at Frontline, which is the main investigative reporting program at PBS, publicly say, basically, “We are so glad we get the government money, because that money allows us to do the investigative work”. Because the foundations and the corporate sponsors are often very cautious and they wouldn’t support that work.
 
 
Independence lies in the balance in the sources of revenues?
 
Rodney Benson : Well, in part. But the way the ownership and funding is structured matters most. One example. The BBC relies entirely on the government licence fee, like French public television. But the BBC in some ways has more autonomy than French public television because of the way they’ve set up the BBC trust, and the way they set up a royal charter established every ten years,  so these regulations provide this autonomy that makes it difficult for the government to directly intervene, even if they would like to. Public support for public media also helps: the fact that the BBC has such a good reputation in Britain makes it difficult for the government to try to censor or limit what the BBC can do. Again, in the case of foundations, it’s important for media that rely on them to have long term operational funding and not just project-based funding, which can create conflicts of interest and undermine journalistic independence.
 
 
But the British government is cutting BBC’s funding …
 
Rodney Benson : Oh yes they are, it’s always been a struggle. It’s hard to maintain but… That’s one of the big differences: if you look at public funding per capita in the US it’s about 4 €. Western Europe, France is maybe 60 € per capita; in the Scandinavian countries: it’s around 150 € per capita. The US is really different from all of Western Europe, which has a more mixed system, it has public and it has commercial. The US is hyper-commercial, it relies almost entirely on advertising, and has this small nonprofit sector to try to fill in the gaps.
 
So one thing I want to stress is: yes, there is this vital nonprofit sector in the US but it’s not really changing that much now or expanding. It’s still a minor part of the system. It’s great that we have it but the US is still overwhelmingly dominated by commercial media.

  • 1. Top US foundations by assets
  • 2. Notable newspaper-owning foundations in Sweden include Tore G Wärenstams stiftelse, Stiftelsen Barometern and Nya Stiftelsen Gefle Dagblad.
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