Philanthropies pledge $500 million to address 'crisis in local news'

David Folkenflik

September 07, 2023 / 7:01 am

caption: Journalists protest outside the offices of the <em>Austin American Statesman</em> in June as part of a nationwide effort by staff at Gannett-owned newspapers to draw attention to layoffs and budget cuts. A coalition of donors is promising to bolster local news with a half-billion dollars over five years.

Some of the biggest names in American philanthropy have joined forces to spend at least $500 million over five years to revitalize the coverage of local news in places where it has waned.

Led by the Chicago-based MacArthur Foundation, the new initiative, called Press Forward, seeks to nurture and sustain new models for funding journalism as the industry has come under severe financial pressures. In its announcement Thursday, the group of more than 20 charitable organizations noted that about a fifth of the nation live in so-called "news deserts" with little or no reliable coverage of major local developments.

"There is a crisis in local news," says John Palfrey, president of the MacArthur Foundation. "The fact that so many newspapers are going out of business, that there are so many news deserts across America, that it poses such a threat to our democracy [means] that we had to do something at scale to be helpful."

Penny Abernathy, a visiting journalism professor at Northwestern University who studies the local news industry, has found that 2,500 newspapers — more than a quarter in the U.S. — have gone out of business since 2005. Such a loss is accompanied by a rise in corporate and government corruption and a drop in voter participation, research indicates. Misinformation can arise from outlets that appear to offer the news yet have hidden agendas.

The MacArthur Foundation gives more than $30 million annually to help support PBS, NPR and other journalism ventures. Those efforts will continue.

"We realized even if we just doubled what we were doing for journalism and media, it would not be enough," Palfrey says. He expects his foundation will ultimately contribute at least $175 million toward the Press Forward initiative over the five years.

Other major participants include the Ford Foundation, Knight Foundation, the William and Flora Hewlett Foundation and the Carnegie Corporation of New York. Groups will either direct money through a centralized fund or issue grants independently.

"As some things go away, other things are cropping up," Palfrey says. "We feel that we can both support very strong existing organizations and efforts and we can help feed the next generation of sustainable news organizations." First grants are to be awarded later this year.

Smaller philanthropies will participate as well, including The Lenfest Institute for Journalism, which owns the Philadelphia Inquirer and has helped other papers convert to not-for-profit status. The Archewell Foundation, established by Prince Harry and Meghan Markle, Duke and Duchess of Sussex, will also take part.

Hoping this time will be different

This is not the first effort to infuse big dollar amounts into local news. The Knight Foundation previously devoted $300 million in grants over five years. Google and Meta (formerly Facebook) each launched their own nine-figure investments in news. The two digital giants have often been blamed for scooping up content from news outlets and siphoning off advertising that previously helped pay for that original journalism. The tech companies' money subsidized some well-regarded initiatives but has not notably altered the landscape. And Google and Meta have stepped back from some of their partnerships with news outlets.

"We've failed 1,000 times. We've failed all kinds of ways," says Alberto Ibargüen, the president and CEO of the Knight Foundation. "An informed electorate, an engaged community, is core to a well-functioning democracy. I am very optimistic that if we have more experimentation, we will find a way."

In recent years, there's been a new push, led by Steve Waldman, co-founder of Report for America, among others, for the federal and state governments to subsidize reporting on the local level. That has borne fruit in California, which funded a $25 million project paying for stipends for reporters through the University of California at Berkeley Graduate School of Journalism, and in New Jersey, which has allocated $5.5 million through a consortium of six college campuses there. There is some bipartisan support for a bill in Congress that would allow generous tax deductions for outlets hiring reporters.

And there are innovations happening in the industry. Older digital outlets such as the Voice of San Diego and the Texas Tribune have been joined by others such as the non-profit Baltimore Banner; Report for America has placed dedicated reporters in existing and upstart newsrooms around the country; the American Journalism Project has helped news outlets refine their business strategies; the National Trust for News has enabled the acquisition of news organizations by not-for profits.

Last year, Chicago Public Media acquired the Chicago Sun-Times after the paper suffered years of steep revenue drops; the MacArthur Foundation was a major financial backer for the deal.

Ibargüen says the new philanthropic push will serve to bolster, accelerate and expand such efforts, while acknowledging they may not prove to be a panacea for the industry. (The Texas Tribune, for example, unexpectedly laid off 10 percent of its staff this summer, adding to a sizeable list of news outlets that recently have slashed jobs.)

"You cannot have news reporting if you don't have reporters - and you can't have reporters if you cannot afford to pay them," Ibargüen says. "We've been on a search to look: What's the model?"

Ibargüen says the initiatives' leaders hope to bring other national and local philanthropies on board, along with major digital platforms. He thinks a billion dollars — double the new commitment — is possible over five years.

Countering 'capitalism run amok'

The industry has been beset by a trio of challenges: the consolidations of major advertisers; the massive shift in audiences' reading habits from paper to digital and a comparative unwillingness to pay for news online; and key owners' relentless drive for profits.

Many major newspaper groups — including Gannett, McClatchy, and the old Tribune and MediaNews publications — are now controlled by investment funds which have embarked on severe rounds of repeated cuts. In the case of the two latter groups, it's Alden Global Capital, which has been criticized as a "vulture capitalist" outfit. (Alden rejects that description, arguing it has acquired papers no one else has figured out how to make money consistently from.)

Many of these papers, once considered the lifeblood of news coverage in their areas, are now hollowed-out shells of their former selves. While Palfrey says for-profit news outlets may receive some of the Press Forward funds, the nature of their ownership would be weighed carefully.

"The chance that we would support a hedge fund-supported newspaper is very, very low," Palfrey says. "One of the reasons we're in this predicament is greed. And one of the reasons we're in this predicament is capitalism run amok. And I think that we're not going to be propping up organizations that may or may not have made good choices in that corporate setting."

Palfrey calls the philanthropic funding "seed money," not charity.

"What is exciting about this moment - against the backdrop of genuine crisis - is the innovation that's occurring," Palfrey says. "And we want to support those social entrepreneurs, those journalists, those editors who are figuring out new ways to provide local news to every community in America."