Foundation and Endowment Support

Foundations already play a key role in supporting investigative journalism. The Center for Public Integrity and the Center for Investigative Reporting are both impressive, longstanding models that depend at least in part on foundation money for their operations. Two newer examples of this model are the recently announced Huffington Post Fund for Investigative Journalism and the Kaiser Health News initiative. There are also several university-based reporting projects like the University of Maryland's Journalism Center on Children and Families and Brandeis University's Schuster Institute for Investigative Journalism.

Perhaps the prime example of this model is ProPublica, an ambitious, not-for-profit investigative outfit that is financed by wealthy philanthropists at the Sandler Foundation and has hired a number of veteran investigative journalists. With an initial gift of $1.25 million from the Sandlers and additional grants from the John D. and Catherine T. MacArthur Foundation, the Atlantic Philanthropies and JEHT Foundation, ProPublica boasts an annual budget of $10 million and a staff of 28 reporters. ProPublica is designed to share its content with partners at mainstream, traditional outlets (as well as on the Web) to reach audiences.

The dilemma facing philanthropists is how best to spend their money in support of quality journalism over the long term. Can investigative projects be carried out on a larger scale? Should foundations take over and run local media outlets or work to fill in specific gaps left by commercial media? Are they better off supporting back-end operations, providing seed money for innovative projects, or sharing best practices? To this end, the Chronicle of Philanthropy recently explored the idea of creating a new nonprofit matchmaker that would connect journalists and news organizations with foundation funding. This coordinating body would help combine the diverse streams of funding from various foundations and make philanthropy more strategic and effective at supporting the news.

One model that would leverage both public and private funding to support in-depth journalism and beat reporting would be a federal matching grant program. Such a program could pair the community foundation model described above with a federal funding stream. A federal fund housed in an agency such as the National Endowment for the Humanities — or some newly created entity — would match foundation contributions, but money would flow through the foundation, thus keeping the government out of content decisions and helping to create a firewall between journalists and the government.

The drawbacks with the foundation model are also fairly straightforward. Even if foundation funding for news organizations were provided with no strings attached, the success of this model remains entirely dependent on the largesse of wealthy donors. The money is not guaranteed, and if funders were to withdraw their support, dependent news organizations could come to a crashing halt. Foundations also tend to fund startup initiatives, rather than to provide general support over long periods of time, and there is a perception that foundations remain somewhat conservative in their selection of worthy projects.

It's unclear whether there is anywhere close to enough foundation money available to fund the full extent of journalism the country needs. According to the Foundation Center's most recent tally, philanthropic contributions to media as a whole amounted to roughly $410 million; of this amount, only about one-sixth went directly to supporting journalism. This amount is wholly insufficient to support the annual newsgathering expenditures of a single newspaper like the New York Times. Other concerns about this model stem from the danger of foundation-supported newsrooms currying favor with their benefactors instead of looking out for the best interests of their readers. Although we should embrace charitable giving to news organizations as a positive development, and highlight those cases where the models appear to be sustainable, placing all of our hopes on this model would be misguided. Other, more dependable and sustainable models are still needed.

Instead of relying on the ongoing support of foundations, some commentators suggest that newspapers ought to build up their own funding through endowments. David Swensen and Michael Schmidt of Yale University, writing in the New York Times, suggest that those who care about the future of journalism should consider modeling newspaper endowments after those of colleges and universities. They argue that by endowing our most valued sources of news, we would free them from the strictures of an obsolete business model and offer them a permanent place in society. Endowments would transform newspapers into unshakable fixtures of American life, with greater stability and enhanced independence that would allow them to serve the public good more effectively.

Calculating that newsgathering at the Times costs approximately $200 million per year, Swensen and Schmidt suggest that a $5 billion endowment would sustain the operation. Warning that "many newspapers will not weather the digital storm on their own," they call for "enlightened philanthropists" to act immediately or "watch a vital component of American democracy fade into irrelevance." Steve Coll, former managing editor of the Washington Post, fueled this debate, writing in the New Yorker that a $2 billion endowment could ensure a healthy newsroom for the Post and endorsing the idea of newspapers going nonprofit.

Although endowment-supported news organizations would not be as vulnerable as foundation-supported ones, there are some similar weaknesses beyond the obvious challenge of locating sources of such massive amounts of money. By remaining entirely dependent on the financial health of endowments, news organizations would be especially vulnerable during economic downturns, such as the one we are currently experiencing, which could lead to severe cuts in news operations.