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In 50 years, when scholars look back at the history of local news, I think they’ll break it down like this: America’s first period of local news, in the age of the founding fathers, was the Era of the Partisan Press — newspapers aligned with political parties and subsidized by the federal government. Then came the Era of the Commercial Press, in which local news was supported in large part by advertising. That lasted until the digital age and came to a sad end around 2020, as local news collapsed.

In 2020, it was unclear what would come next. There were early signs that it might become the Era of the Tribal press, in which every community mirrors the warfare we see on cable TV. As of October 2020, there were some 1,300 sites that were either driven by ideological financial supporters or blatantly pay-to-play (secret clients paying for stories in the local paper without disclosure). Many communities had nothing at all, which meant people got their information from social media and government news releases.

But there were also some positive signs. A new, better model for local journalism was developing. It consisted of reconceived commercial news organizations, a growing presence of nonprofit news organizations, a greater role for small and large philanthropic donors, and a role for taxpayers and government. These new “ecosystems” seemed more deeply grounded in the communities they served.

Those of us observing this here in 2020 must ask: Which of these paths will America go down? That will be determined to a large degree by the choices foundations and philanthropists, policy makers, and businesses make in the next few years.

Uninformed Decisions

First let’s review the scale of the collapse and the consequences for communities. Since 2004, the number of newspaper reporters has dropped by more than 60 percent. Some 200 counties and 1,800 communities have no local news source at all. Thousands of others have so-called ghost newspapers, which contain barely any local reporting. One study found that only 17 percent of the articles in local newspapers were about local matters. And that was all before Covid-19.

This matters not only because journalists are without jobs but because communities are without information.

Families are less able to make informed decisions about schools and health care, and communities are less able to solve their own problems. Studies have now proven that a disappearance of local news leads to less civic involvement and more polarization, corruption, and pollution. Where there is less local news, people feel more alienated from their communities and their local governments. There is less accountability for all local institutions — school boards, planning commissions, businesses, universities, labor unions, and city hall.

Alberto Ibargüen, the visionary leader of the Knight Foundation, used to say that journalism should be every foundation’s second most important issue. While that sounds a bit uninspiring, it’s exactly right. No philanthropists should shift away from their primary mission, but they should understand that their ability to effectuate change is highly compromised without local journalists. For instance, don’t we think that the billions spent on improving schools might be more effective if there were actual reporters covering schools?

Era of Civic News

That’s why we need to work, collectively and consciously, toward ushering in an Era of Civic News.

In this system, local news would look quite different. For starters, nonprofits would have to provide much more coverage than they have in the past. Thankfully, over the past decade, more than 300 nonprofit local news websites have sprung up, bearing names like VTDigger, Oklahoma Watch, Arkansas Nonprofit News Network, East Lansing Info, and the Texas Tribune. Many are doing fantastic local reporting. Philanthropic sources have increased funding to these groups, and last year a new organization called the American Journalism Project was created to help enlarge their number and viability. New national nonprofit organizations have also come forward to help with local news. Chalkbeat provides high-quality education reporting in eight cities. The Solutions Journalism Network provides training and financial support for journalism aimed at solving important problems.

This June, Report for America, the organization I co-founded and run, which is an effort of the GroundTruth Project, placed 226 reporters into 163 local newsrooms around the country, about half of which are nonprofits and half long-standing papers. We require that newsrooms raise a portion of the salaries for reporters from the community, forcing them to develop philanthropic operations that many never had before. In the past year, the program helped stimulate 7,800 donations to local news organizations with Report for America members. This approach helps educate local donors that, without local journalism, communities won’t make progress on health care, education, or many other issues they champion.

Public radio stations have also significantly beefed up their coverage of local issues. They have the potential to play a critical role because they already have proven business models — local memberships and philanthropy — as well as pre-existing audiences. Some have wisely teamed up with some of these first-generation nonprofit digital websites.

In other cases, for-profit newsrooms have shed their commercial skins. In recent years, the owners of The Salt Lake Tribune and The Philadelphia Inquirer donated their newspapers to nonprofit organizations. The Tampa Bay Times (formerly the St. Petersburg Times) was donated to one in 2003. These outlets have maintained much better coverage and have a better path to sustainability than most commercial papers.

Support From Billionaires

There’s plenty more that philanthropy must do. Although grant makers have increased their commitment to journalism from $123 million in 2009 to $370 million in 2018, newspaper revenue has dropped more than $23 billion. Nonprofit operations are rarely financially secure. In 2019, only one-third of the 300 local nonprofits had taken in at least $1 million in revenue, according to the Institute for Nonprofit News. But the gap that needs to be filled by philanthropy is manageable. If we added a reporter to follow each municipal government in the country, it would cost about $1 billion. By contrast, individuals, foundations, and corporations gave $450 billion to charitable causes in 2019, including $13 billion just to the top 20 elite (and mostly well-endowed) colleges and universities.

An Era of Civic News would also need to include commercial newspapers that refocus on serving their communities.

Sometimes a local benevolent billionaire reclaims a newspaper from one of the chains. Thanks to purchases by the rich, the Boston Globe, Minneapolis Star Tribune, Berkshire Eagle, and Los Angeles Times have all been investing more in journalism than their chain-based peers.

Others are experimenting with new corporate structures that maintain private ownership but increase the odds of community investment. The Philadelphia Inquirer became a public-benefit corporation (which was then acquired by a nonprofit). With a public-benefit corporation, investors can still invest and make a boatload down the road, but the company must commit to both making money and serving the community. This makes it easier for news organizations to raise money, and, should they ever be up for sale or go bankrupt, it becomes easier for community civic leaders to organize an acquisition. And other commercial newsrooms are experimenting with having deep partnerships with local foundations, creating an intriguing hybrid public-private model.

But there is a risk that, if not managed well, some of these positive trends could end up exacerbating the effects of income inequality or polarization.

Many public radio stations have ended up with more affluent and whiter audiences because their fundraising needs pull them in that direction. The new breed of digital-first nonprofits will have the same tilt. The need to shift commercial business models toward subscriptions could, ironically, also push toward a more affluent audience, as they tend to be more able or willing to pay for news. “Elites are giving to other elites to support the kind of journalism already read by well-educated people,” concludes professor Nikki Usher, in her forthcoming book News for the Rich, White and Blue.

That problem would probably be exacerbated if we turned exclusively to the nation’s wealthiest. Even if Laurene Powell Jobs woke up and decided to solve the local news problem by herself (which she could, by the way), it would be hard to get excited about democracy’s fate depending entirely on the fancies of a few billionaires.

Public Acceptance

To truly bring about an Era of Civic News, we need more than philanthropy and business: We need taxpayers to make it clear how vital news is to our democracy.

The postal subsidy the federal government started providing to news publications in the 18th century made a tremendous difference — massively helping create the early newspaper industry — because it was content neutral. Government support in the civic news era would need to be similarly impartial.

The best idea is based on a new bipartisan bill called the Local Journalism Sustainability Act, drafted by Rep. Ann Kirkpatrick, Democrat of Arizona, and Rep. Dan Newhouse, Republican of Washington. The act would provide taxpayers with $250 refundable tax credits that they could use to buy a news subscription or donate to a local news nonprofit. Rather than government officials sitting around a table or in a Zoom meeting deciding who gets what, the choices would be made by Americans themselves — but with their preferences amplified. This would unleash a virtuous market dynamic. Local news organizations would need to persuade residents that they are worthy of donations or subscriptions. Newspapers that continued to disinvest in reporting would become vulnerable to competition by other organizations. Ghost newspapers would ultimately lose out to living newsrooms.

There would be some difficult policy questions, including what outlets qualified as “local.” The journalism world would need to mobilize to create a set of standards. And no matter how rigorous those standards were, some of the money would inevitably still end up with dubious publications. That’s how the postal subsidy worked and how the deduction for charitable giving currently works. You decide which charity to support, and the government subsidizes your choice, regardless of whether you’re helping the Red Cross or the First Church of Snake Handling. But just as Thomas Jefferson tolerated subsidies for Federalist lowlifes — for the greater good — we’d accept some questionable cases to help build a system of subsidies that is robust and broadly accepted by the public.

From Hedge Funds to Community Nonprofits

While the Local Journalism Sustainability Act forms the core of a smart strategy, it is not sufficient. It would provide a regular tax credit, but that needs to be refundable so that people who pay little or nothing in taxes can benefit. If made refundable and used by the same proportion of people as checked off the federal campaign-finance credit, it would pump $5.5 billion into local media each year.

The Rebuild Local News coalition, which I lead, recently proposed several other critical governmental changes that would help usher in an era of civic news. We should “supersize” the NewsMatch program, set up by a consortium of foundations to match money that nonprofit news organizations raise from their communities. We need an ambitious “replanting strategy” that would help move hundreds of newspapers out of the hands of hedge funds and into community nonprofit groups. Congress should pass a set of tax incentives for chains or hedge funds that donate newspapers to nonprofit groups. The Justice Department should adopt a new approach to antitrust law that would block or slow down certain mergers.

Philanthropy should support major new national nonprofit organization to help struggling newspapers become community nonprofits or public-benefit corporations. (I am working with others in the field to create such an organization.) In some cases, the new fund would help with the logistics of the change — tax filings, legal bills, bankruptcy filings. In other cases, it would acquire newspapers for little money, or accept them as donated assets, and then hand them over to local groups. What’s more, it would provide expertise and operating capital to help newly reconstituted news organizations succeed, perhaps tapping into the system of tax-exempt bonds that helped public radio stations grow in the 2000s.

Public Policy’s Role

For those wondering whether public policy can or should play a role, the public broadcasting system offers another important precedent. Before 1967, there were 292 public radio stations — a number strikingly similar to the number of local nonprofit news organizations today. These stations had great energy and talent but little money, with many run out of universities. Congress then passed the Public Broadcasting Act of 1967. Now there are more than 900 public radio stations and 356 public TV stations, including powerhouses that produce some of the best content out there. But while some of our favorite Ken Burns series feature Corporation for Public Broadcasting logos, the majority of CPB funding goes out to local stations, by formula — not for specific content but for general operating support.

Let’s say the federal government created a similar arrangement for local news organizations with the goal of tripling the number of local reporters. That would cost the federal government a few billion dollars in lost tax revenue and some direct expenditures. The price tag would be about the same scale as the tax deduction for business meals and entertainment.

Philanthropy can — and really must — play a leading role in promoting this change. First, and most obviously, foundations and individual givers large and small must increase their financial commitment by an extra $1 billion to $2 billion a year.

But philanthropy also has a role in encouraging positive developments in the business world — for instance, by helping to develop financing mechanisms that reward local ownership. And, finally, it can help shape the creation of public policies that will usher in a better local news system.

Foundations need to stop looking at the collapse of local news as primarily a problem for local news. It’s so much broader than that. Any philanthropic institution that is trying to bring about positive change will be increasingly hobbled if it doesn’t attend to this crisis. The good news is that this moment of fluidity also presents an opportunity. We can build a system that not only fills the gaps but improves upon what came before — a true Era of Civic News.

This piece is adapted from a piece in the “Washington Monthly.”

Source of original article:John D. and Catherine T. MacArthur Foundation (www.philanthropy.com).
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