Charitable funding is not the future of journalism

Jonathan Kay, it’s not your fault. It’s just that you did that thing that so many people do that drives my OCD brain batty. You used the concepts “nonprofit” and “charitable” interchangeably in your article on future media business models. I can’t help myself.

Your article is about the Walrus magazine. I am not writing about the Walrus magazine. I just found the piece to be an interesting jumping off point for a thought experiment. So let’s begin.
I think journalism is important. My first degree was in radio and television arts, which is like broadcast journalism without any facts. I am a media podcast junkie. So when I found an article that combined my media nerdism with my nonprofit nerdism, there was no way I could not write this post. 

There is no such thing as a “nonprofit business model”

Nonprofit is just a corporate structure, like being a publicly-traded company versus a privately-traded company.

All charities are nonprofits. Not all nonprofits are charities. That’s a super important point that basically everyone, after learning that there is “government” and “business”, should also learn.
Charities, by definition, operate in the public interest. A charity is incorporated for very specific purposes. Unlike businesses, which can switch their whole purpose whenever they want, a charity can only do what it was created to do. It must also abide by rules limiting political and partisan activities, fundraising activities, and commercial activities. Charities are supposed to be funded primarily by gifts, money and resources donated with no expectation or reward or return. 

Nonprofits don’t earn a profit for shareholders or owners. They do not have to serve the public interest. They don’t have to do “good”, or even pretend to do “good”. 

Let’s assume Kay’s suggesting that media outlets of the future will be charities. What would happen? 

Chaos. Horror. Social collapse.

Sure, some media outlets can be charities. Absolutely there is room for that. But for the whole sector? That may be the worst idea of all for saving journalism.

Here’s why: 

First, charities have to be approved by the government. I’m not sure about you, but I think that sounds antithetical to a functioning democracy. (Spectrum licensing and legitimate regulatory oversight aside.) You probably don’t want one level of government gatekeeping the entire journalism sector and deciding who gets to exist. 

Second, charities are limited in the amount of political activity they can undertake. This is a good thing (in theory), because it keeps them independent. But it would be untenable for a media outlet. How can you cover political stories and affairs without being political? Without attempting to influence public or official opinions? Covering a story is a way of saying “this topic is important and deserves attention.” Ignoring a story says the opposite. Both could be construed as political. Throw in the fact that the government gets to decide what is “political,” and it’s hard to see how a sector built on charitable contributions could also be a diverse, provocative, accountability-making force.

Third, charities can’t engage in partisan activity at all. Unhappily, the federal government’s definition of partisan and political particularly when it comes to social media, is very narrow. Charities can’t link to the social media accounts of elected officials. They can’t share information disseminated by political parties, even with a caption like “this is the #1 trending topic on Twitter today.” Journalists who cover politics have to do those things to do their jobs. 

Fourth, if the entire journalism sector were to rely on donations for survival, I’m not sure you’d have a more accountable media than you do today. A small group of people with wealth, and presumably influence, would decide who gets funded. By default, that also means they would decide who gets heard, what issues are aired, and what viewpoints are put forward. At best, journalists would work for a relatively small, relatively homogenous group of people. At worst, journalists would be under the thumb of a cabal of message-controlling, powerful, unaccountable, n’er-do-wells.

It’s probably a non-issue

I don’t think it will actually ever happen that journalism becomes a largely charity-driven sector. If you cover news that I want to consume, I’m going to pay you for it. Whether it’s crowd-funding, subscription, or pay-as-you-go, it’s going to happen (cabals be darned).

The ad-driven model that evolved over the decades was a response to the market failure that is inherent in journalism - the price of good journalism is probably higher than anyone is willing to pay. There’s virtually no demand to learn about issues we don’t even know exist until we’ve been told about them. Not all the news we need to know is news we want to know. So advertising was a way of funding the work, and it was good(ish) while it lasted. 

The market failure was always there, but the old business model is failing. Charitable donations are one response. A handful of charitable news organizations could definitely exist and thrive, but only in the midst of other models. For the sake of democracy.