Propping up old media – foundation pays journos’ salaries

On the Kickstarter website dozens of prospective start-ups are relying on the generosity of the crowd to help them launch new media ventures.

And, as I’ll outline in an upcoming piece, some are doing quite nicely.

But the old media is getting a helping hand too as deep-pocketed foundations alarmed at the erosion of capability in newsrooms dip into their endowments to pay the salaries of journalists.

Testing the water with this new model is the Ford Foundation, initially built from some of the proceeds of Model T sales and now endowed with $US10 billion, which allowed them in 2011 to dispense $US413 million last year to worthy causes.

Last year the Ford Foundation gave a $US1 million, two year grant to the Los Angeles Times to pay the salaries of five journalists, including a Brazil-based contributor.

The money came with “no strings attached”, wrote Davan Marajah, editor and executive vice president of the Los Angeles Times Media Group. But Ford stipulates that the money has to be funnelled into coverage of: "Immigration and ethnic communities in Southern California, the California prison system, the Southwest border region and one of the most important international stories in our region, Brazil."

The money comes from a portfolio separate to the Ford Foundation’s over investments, to avoid conflicts of interest. As I wrote in a previous post, at least one hyper local media start-up has set up in the greater LA region to fill the void in ethnically diverse communities where the Times has largely withdrawn reporters from.

The investment seems to be paying off, though the notion of paying private media companies to invest in coverage is met with skepticism from senior journalists I’ve spoken to on my travels in the US. Maybe that’s because most of them are working for foundation-funded journalism centres which are effectively competing with the likes of the LA Times for the foundations’ attention. They see it as competition.

But a former LA Times editor and self-confessed “newsosaur” has questioned whether the arrangement qualifies for the foundation’s tax exempt status in this post, which is worth reading for the general background to the move and the LA Times’ owners’ financial woes. The work of these Ford-sponsored reporters has to be made freely available on the LA Times website, not included behind its paywall.

The Ford grant broke new ground, but was quickly followed by a similar grant to the Washington Post. This one year grant funded four reporters to work on special projects related to “money, politics and government”. Ford said it had agreed in principle to extend the grant for an additional two years at the same level.

That seems to be it for the moment – other large foundations fund journalism not for profits and research in the field but haven’t gone as far as underwriting the salaries of reporters in the newsroom. The grant, similarly, attracted criticism from some in the media. For Reuters, Steven Brill wrote:

“When Henry Ford set up his Foundation, did he really intend to help bail out over-leveraged financial investors in a media conglomerate? And is the New YorkTimes not getting these Ford grants because it is doing so well by charging readers for online access that, at least on a relative basis, it doesn’t need the money? Or is the Times about to get some of the Ford money, too? Has the Times sought a grant? What about other newspapers?”

The Post used some of the Ford money to hire Pulitzer Prize winning journalist mike Sallah.

It’s a bit early to tell what impact these grants ultimately are having. But there remains the issue of longterm sustainability – what happens when the foundation money dries up – are these areas of coverage any more likely than they are now to attract support from the papers themselves? It seems, frankly, unlikely.

A more sustainable, but expensive measure would be for the foundations to invest in media companies, taking a sizeable stake and running them along the lines of the UK’s Guardian newspaper, which is operated by a not for profit trust. Still, the Guardian loses money – the economics would have to look much better to make it work. This from the Huffington Post:

Ford and many other large foundations have the resources to do just that [take stakes in media companies]. But they have to decide whether they are serious about this as a major priority or whether they are content with just dribbling out a few dollars that will not accomplish much of anything.

What’s the situation here?
Would the underwriting of newsroom positions help boost neglected areas of coverage in New Zealand newsrooms? Frankly I can’t think of a foundation or philanthropic organisation that would produce the money to do so.

But with a bit of lobbying, from the media itself and those interested in arresting the slide in coverage in important areas of public interest, this could prove to be a more attractive option than funding the setting up independent not for profit media operations – which have proliferated here in the US.

The cost-structure would be much lower and journalists have a ready audience waiting for them. I could see this happening on a subject and regional basis.

Maybe a community-minded organisation would see value in having a fulltime reporter on the New Zealand Herald focused entirely on local body politics and following the money in council, supplementing the coverage of Bernard Orsman, Brian Rudman and others.

The Waikato Times could really benefit from a reporter, underwritten by a not for profit, focusing entirely on environmental issues facing the primary sector in the Waikato – water quality, land management, that sort of thing.

Probably the quickest way to get decent coverage of both issues would be to boost the existing media, rather than seeding new online outlets focused on the job.

Either way, the direct funding of media outlets by foundations is in the very early stages in the US. It’s too early to tell whether its a viable longterm option for the cash-strapped media.

Science Media Centre manager Peter Griffin is currently in the US on a Fulbright-Harkness Fellowship to study innovation in media. He is blogging his trip at Future News.