"Elites Supporting Elites." What's Wrong (and Right) With Foundation Support of Journalism

 photo: QVIST/shutterstock

photo: QVIST/shutterstock

To understand just how much work is needed to shore up what's left of the newspaper industry, consider the following data points: In 2000, print advertising revenue for newspapers was $67 billion. By 2014, that total had fallen to $20 billion, adjusted for inflation. During this same period, the number of people working in newspaper newsrooms dropped from 56,000 to 37,000. 

What has philanthropy done to offset these devastating losses? What can it do? And what are the risks that emerge as journalism leans more heavily on private support? 

These questions inform a new study, "Funding the News," by the Shorenstein Center on Media, Politics, and Public Policy and Northeastern University. Looking at foundation-supported journalism over a recent six-year period, the study concluded that there is much work to be done, both in terms of ramping up total funding and allocating grants more broadly across the sector.

The team of Northeastern University researchers assessed 32,422 grants distributed by foundations supporting journalism and media-related activities between 2010 and 2015. Total payout stood at $1.8 billion.

Two takeaways jump out from this study, both of which are unsettling. 

First, philanthropy's efforts to offset the decimation of the news industry amount to a finger-in-the-dike effort. Researchers found that "although there are some success stories, neither the digital news nonprofit sector, nor any other form of commercial media have yet been able to meaningfully fill the gaps in coverage created by the collapse of the newspaper industry."  

Second, the flow of grant dollars in this space provides a stark case study of the elite tilt of foundation giving. 

Northeastern researchers cited 6,568 foundations giving to journalism organizations. But as is the case in other funding areas, giving for journalism has been very concentrated, with just a few dozen foundations and grantees dominating the scene. 

The biggest money, nearly half the total, flowed to public media and much of that to flagship public radio stations in major cities like New York, Boston and Philadelphia. Major universities also pulled in big bucks for campus-based journalism and media programs. 

Meanwhile, much of the funding for newsgathering nonprofits came from a handful of funders and went to a limited number of grantees. At the national level, the report states that "between 2010 and 2015, eight out of 10 foundation dollars flowed to just 25 news nonprofits, with four investigative journalism units topping the list... Overall, national news nonprofits were highly dependent on about two dozen institutional funders for nearly 70 percent of the grants distributed over the six-year period analyzed." This funding also tended to support work on a handful of issues, such as the environment, and flow to a "disproportionate number of ideologically-oriented outlets."

Only $80.1 million—or about 5 percent of the $1.8 billion total—went to support state and local news nonprofits, despite widespread alarm about the demise of media at this level. And much of that funding came from just a few sources, most notably the John S. and James L. Knight Foundation.

Knight allotted $16.2 million in funding to local and state news nonprofits from 2010 to 2015, representing 20 percent of the total funding allotted. Coming in at a distant No. 2 was the California Endowment at just under $6 million. No. 3 was the Open Society Foundations at $5 million, followed by the Ford Foundation at $2.9 million.

This kind of funding concentration isn't relegated only to the journalism sector; it mirrors what's happening all across the larger nonprofit landscape. Just recently, for example, we reported on a study of funding on climate change that revealed that a handful of major funders dominated this space, channeling most support to a small number of top environmental groups that embraced a limited range of solutions.  

That study was written by Matthew Nisbet, a professor at Northeastern University, who is also an author of this study. 

RelatedSkewed Priorities? How Philanthropy Has Shaped Debates Over Climate Change

Both studies underscore a point we make often at IP, which is that the biggest players in philanthropy—deep-pocketed foundations and top living donors—have become an ever-more dominant force in giving. As a result, they increasingly and disproportionately shape the priorities of key segments of civil society. Their priorities frequently reflect a phenomenon the authors of this report describe as "elites supporting elites," with philanthropic dollars tending to stay inside the "bubble" that proved clueless about the heartland trends that produced a Trump presidency. The report, for example, finds that eight of the 10 states (including D.C.) that received the most funding for public media voted for Hillary Clinton in the 2016 election.

The other characteristic of the current giving landscape is a kind of "pack philanthropy, with funders passing over promising, albeit less renowned organizations in favor of high-profile and well-connected nonprofits in coastal cities.

Consider the case of ProPublica. The outlet launched in 2008 with an eight-figure commitment from Herbert and Marion Sandler. ProPublica has since become a fundraising powerhouse

In 2014 and in 2015, it raised nearly $13 million each year from foundations and individuals. In 2016, it raised nearly $17 million, including more than $2 million in online donations from thousands of contributors. And its 2017 annual report cited over $28 million in revenues generated through board of directors contributions and related grants, online donations, and other grants and gifts.

But the fundraising successes of ProPublica and other outlets like the Texas Tribune are not widely replicated, according to the Shorenstein study.  

Perhaps we should pivot to the good news.

Its critique aside, this report reminds us that the nonprofit media sector is now quite extensive, and in some cases, very well funded. Top public radio stations are flourishing, investigative reporting shops are breaking important news, state and local reporting outfits have emerged in many places, along with issue-specific digital sites like the Marshall Project, and august opinion magazines like The Nation and Harper's are hanging in there. 

Also, for all the criticisms of how foundations operate in this space, it's worth emphasizing that many funders have stuck with media grantmaking for years, even though hard metrics of impact aren't easy to come by for evaluating such funding. Some foundations, most notably Knight, have been impressively innovative and forward-looking in their media grantmaking. 

RelatedThe Futurist: Alberto Ibargüen and the Remaking of the Knight Foundation

What's more, as we've often reported, nonprofit news has gotten a big boost lately in the age of Trump. 

The report cites as causes for optimism the launch of the News Revenue Hub and NewsMatch, along with the considerable “Trump Bump” in revenue at ProPublica in particular. Outlets have raised record amounts of money since November 8, 2016. That's newsworthy in and of itself. The election, practically overnight, created a brand new funding niche—the crusade against fake news—that continues to attract donor dollars. It compelled funders new to journalism like the Barr Foundation, Craig Newmark, and the Heising-Simons Foundation to enter the fray—a welcome development in a sector that could use more funder diversity.

Also consider the success of H.F. Lenfest's Lenfest Institute for Journalism. After initially endowing it to the tune of $20 million, he pledged an additional $40 million last May. The institute also announced it received more than $21 million in new donations, while a matching campaign hopes to raise that figure above $100 million.

Foundations can't stop every small town daily from going under. They can't prevent vulture capitalists from bleeding regional outlets dry. Nor can they wave a magic wand to make Google and Facebook's digital advertising models disappear. But they can make a difference in defending the Fourth Estate, and many have risen to the challenge. 

Now what funders need to do is heed this study's findings and work to level the playing field by broadening their recipient base while supporting outlets that serve underrepresented parts of the county—precisely the areas most affected by the demise of regional and local news.