MacArthur Foundation offers $500 million lifeline for local news

As the financial picture for local news gets worse, a coalition of charitable foundations is offering a potential lifeline: an infusion of $500 million to help media organizations report on their communities.

The new Press Forward initiative announced Thursday by the MacArthur Foundation is the largest single philanthropic commitment to journalism after numerous other charitable efforts over the past decade or so to seed new ventures and shore up troubled news operations.

“My sense is that we are losing a newspaper in America every week, and that’s a dangerous thing for American democracy,” the foundation’s president, John Palfrey, said in an interview. “It’s hard to have a democracy when you don’t have good local news. When you lose credible news sources, misinformation and disinformation swoop in.”

The money from MacArthur in collaboration with 21 other foundations — effectively $100 million a year for five years — comes after an era-defining shift from print to digital publishing that triggered the loss of local advertising to competitors such as Google and Facebook. Roughly 2,500 newspapers have closed since 2005, mostly of them small weeklies, while broadcast news has suffered, as well. This has left a growing number of news “deserts,” communities without any professional media coverage.

Some of the gap has been filled by local and national nonprofit news organizations, such as ProPublica, the Texas Tribune and Marshall Project. Daily newspapers such as the Philadelphia Inquirer, Salt Lake Tribune and Chicago Sun-Times have also converted to nonprofit status with philanthropic support. The Sun-Times did so last year, aided by a $60 million grant from the MacArthur Foundation.

But the overall need appears to be vast. The Boston Consulting Group estimated this year that it would take about $1.75 billion to cover deficits incurred by U.S. newspapers.

MacArthur, known for its “genius” grants, organized the coalition, which includes many of the biggest names in American philanthropy, such as the Ford Foundation, Carnegie Corporation, Knight Foundation and the Sloan Foundation.

The Knight Foundation, which was started by the late newspaper barons John and James Knight, will be among the largest contributors, with a $150 million commitment. Among the smaller participants is the Archewell Foundation, which was founded by Prince Harry and Meghan, Duchess of Sussex.

Palfrey said the initiative would fund new as well as established news organizations on the local, state and national levels, with an eye toward building newsrooms in news deserts and among historically underserved communities. One of its aims is to improve newsroom diversity.

While philanthropic investment has fueled an increase in the number of news organizations, it hasn’t insulated such groups from the forces of the marketplace.

The statewide Texas Tribune — a nonprofit founded in 2009 that has been a model for other news start-ups — laid off 11 percent of its staff last month, triggering new concerns about the sustainability of organizations that rely on a mix of membership subscriptions, events and charitable grants.

NPR, which receives some philanthropic support as well as a small amount of government funding, also has periodically cut back its staff, including about 100 employees, or 10 percent of its staff, in February.

Tim Franklin, who heads the local-news initiative at the Medill School of Journalism at Northwestern University, said the $500 million initiative could be “a game changer” for many struggling legacy and start-up outlets.

“It could provide tangible benefits to local news organizations in giving them a financial runway to eventual self-sustainability,” he said. The size of the program also “makes a powerful statement to other potential donors and to policymakers in Washington and in statehouses that the local news crisis is a serious one for our democracy and that bold actions are required in the moment. This is eyebrow-raising commitment to this problem.”

Legislators in seven states have introduced bills that would give local news operations tax incentives, such as a tax credit for a subscription to a local newspaper or a payroll tax credit for hiring journalists. However, no state had passed a tax incentive bill as of July. A bill introduced in Congress in 2021 that would give similar tax credits is also still pending.

Two states, California and New Jersey, have funded small projects that provide taxpayer money for journalists’ stipends through state-funded colleges.

But Franklin said it was unrealistic to expect charitable organizations to address the scale of the news desert problem.

“There aren’t enough philanthropic dollars to solve the local news crisis at the community level, and I think even the foundations understand that,” he said

Palfrey agreed, saying: “This is a down payment on the future. The need in five years will still be there. … Our hope is this stimulates more sustainable support.”

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