Debate Over the Nonprofit Newspaper Model Lands in the Senate

Conor Clarke in the Atlantic’s business blog today, reports on Senator Benjamin Cardin’s plan to make it easy for newspapers to become nonprofits. But do we really want newspapers that promote the agendas of private foundations?

The nonprofit model has been floated ever since it was revealed that newspapers are doomed, and most point to the Poynter Institute, owners of the St. Petersburg Times, as the best example of nonprofit news done right.

The proposed legislation, called the Newspaper Revitalization Act, would allow dying papers to operate as nonprofits for educational purposes under the U.S. tax code, giving them a similar status to public broadcasting companies. In return, newspapers would be unable to endorse candidates and legislation. There’s really no problem with that part, notes Clarke. “Opinion is cheap and plentiful on the web.”

The bigger problem is how to get from here to there. The message of Yale investment guru David Swensen’s suggestion about this “wasn’t the abstract notion of turning a newspaper into a non-profit; indeed, a handful newspapers and newswires (the Guardian, the AP, the NYT, the St. Petersburg Times) have come up with hybrid or ostensibly non-profit ownership structures already. The problem was endowing a newspaper like a university.” To run the New York Times, for example, would require an endowment of $5 billion. “Making this happen requires more than a law,” writes Clarke. “It requires an angel.”

When Big Think interviewd John Temple, former editor of the Rocky Mountain News, he dismissed the potential of the nonprofit model, arguing that the profit-motive catalyzes innovation, sparks editorial energy, and does more to serve the broader public agenda, without private political motive. What do you think? Can a nonprofit model salvage the Fifth Estate, or do newspapers need to evolve into something different, but equally profit-driven, to survive?