News from the Field

Bezos and Buffet in the News Industry is Good for Nonprofits

When Jeff Bezos announced last week that he would buy The Washington Post, many people derided the sale price as essentially an act of charity: At $250-million, the price Mr. Bezos paid was a lot higher than the newspaper is actually worth.

Such punditry obscured what was so important about the sale for the nonprofit world. The transition at the Post was just the latest sign of the rise of a new class of newspaper investors who are determined to return news organizations to their important role in serving the information needs of communities.

The sale of the Post came just days after the investor John Henry, known better as the owner of the Boston Red Sox, purchased The Boston Globe and followed the lead of Warren Buffett, whose Berkshire Hathaway bought 28 newspapers last year.

The welcome investments come after a sharp decline in newspapers over the past decade that has deprived society of vital information. The news industry’s tailspin has been particularly damaging to nonprofits, which depend on a healthy media ecosystem to illuminate public debate on pressing social issues.

Even though the amount of content and commentary has exploded online, the layoffs of thousands of professional journalists around the country has meant that some very important issues are not getting the kind of vigorous and careful reporting that is essential in a democracy.

The troubles at the nation’s newspapers have sparked a concerted response from foundations.

In addition to longtime journalism supporters like the John S. and James L. Knight, Robert R. McCormick, and Scripps Howard foundations—which were created largely from newspaper fortunes—other philanthropies have stepped up to fill information voids.

The California Endowment, for example, has supported the Reporting on Health Collaborative, a project that aims to strengthen health journalism at a half-dozen newspaper and radio outlets in the Central Valley of California. The health-reporting collaboration has focused special attention on the spread of valley fever, a mysterious fungal disease that has been spreading quickly in the Southwest.

Almost immediately, the attention in several news outlets has resulted in aggressive government action to step up research on the disease. And state officials signaled their concern by putting a halt on prison transfers among particularly vulnerable inmates, which were causing the disease to spread fast.

Projects like the health collaborative can have a great impact when they “engage communities, bring people together, and start conversations without slipping into advocacy,” said Michelle Levander, who organized the collaborative as part of the California Endowment Health Journalism Fellowships program at the University of Southern California Annenberg School for Communications.

Another strong leader in promoting health journalism has been the Kaiser Family Foundation, which has moved past its role of simply providing grants and fellowships to spur coverage of health policy. Now it also directly carries out journalism activities through its Kaiser Health News service, which provides original and independent reporting on a broad range of health issues, including insurance, health policy, and healthcare costs.

Kaiser Health News makes its content available free to media outlets and the public. It is distributed through partnerships with prominent news organizations, includingThe Atlantic, Forbes, McClatchy-owned newspapers, NPR, and The Washington Post.

One of the big casualties of coverage in shrinking newsrooms has been environmental reporting, a beat that is disappearing even as the urgency of ecological concerns is increasing.

A small nonprofit news organization, InsideClimate News, has undertaken a valiant effort to fill the gap. With a budget of less than $1-million, the seven-person staff has taken on some of the most complicated and contentious environmental news stories, including reports on nuclear energy, gas drilling, and energy pipelines, an arcane subject that many mainstream news organizations have ignored.

InsideClimate News was rewarded with a Pulitzer Prize for National Reporting for its diligent pursuit of news about a particularly gruesome pipeline disaster near Kalamazoo, Mich. InsideClimate News is the smallest of three online news organizations to win the Pulitzer for national reporting so far. And it is an honor that has to be shared, in part, with the perceptive grant makers at the Rockefeller Brothers Fund, who helped start the organization.

Foundations are not just supporting nonprofit journalism but also providing grants to commercial outlets so they can focus on reporting they might otherwise scrap because of financial woes.

The Ford Foundation last year provided a grant to the Los Angeles Times to expand coverage of immigrants, the state prison system, and other topics. The grant maker also provides money to The Washington Post to expand government-accountability reporting.

All of these examples—and far more—demonstrate that nonprofit media organizations and grant makers can’t achieve their goals unless they have healthy commercial media partners to reach the broadest audience with critical information.

Equally important will be for foundations, nonprofits, and the new breed of newspaper investors to appreciate the importance of independent journalism.

Grant makers need to respect the editorial independence of the media organizations they support, and media investors need to restrain themselves from interfering in editorial decisions if they are to preserve the credibility and integrity of their enterprise.

Warren Buffett understands this important delineation. In his most recent annual letter to Berkshire Hathaway shareholders, Mr. Buffett states categorically that the newspapers acquired by Berkshire “will be independent in their news coverage and editorial opinions.”

To underscore the point, he noted that “I voted for Obama; of our 12 dailies that endorsed a presidential candidate, 10 opted for Romney.”

Mr. Bezos says he understands this as well. In a letter to employees of The Washington Post, he wrote, “So, let me start with something critical. The values of the Post do not need changing. The paper’s duty will remain to its readers and not to the private interests of its owners.”

Let’s hope he maintains that high standard. And while we’re at it, grant makers who support media projects should make that their standard, too.

Posted in the Chronicle of Philanthropy

Image by Esther Vargas

Leave a Reply

Your email address will not be published. Required fields are marked *