This nation has a proud history of journalism, long tied most closely to newspapers. But the newspaper industry, as we know, has experienced a severe decline in recent years. The signs of this decline were evident to many of us in my hometown of Detroit back in 1987, when our two highly competitive newspapers, the Detroit Free Press and the Detroit News, announced the formation of a joint operating agreement (JOA). This allowed the two newspapers to combine their business operation, while keeping their editorial staffs separate. Despite reassurances from both news organizations that robust local news coverage would continue, it was pretty clear that change was in the air for the news business, and it remained to be seen how well the local community would be served.
Since then, the emergence of digital technology has complicated the landscape for news organizations. While there is great opportunity for innovation in news gathering and dissemination, not to mention the possibility for new nonprofit news enterprises, there are also obstacles posed by outdated regulations. The Federal Communications Commission (FCC) issued a report in 2011 entitled, “The Information Needs of Communities: The changing media landscape in a broadband age.” Pointing to the severe cutbacks in newsrooms across the country, the report noted that local communities are losing out on the kind of accountability reporting necessary to make informed decisions on local issues. Nonprofit media, the report suggested, could help address this concern.
To further explore the current state of nonprofit media, The Knight Foundation and the Council on Foundations joined forces to create a working group tasked to dig into regulatory obstacles. I was honored to participate on this working group and am pleased that our report, “The IRS and Nonprofit Media: Toward Creating a More Informed Public,” is being released on March 4th.
The Internal Revenue Service gets top billing here because the agency is using outdated regulatory approaches in determining tax exemption eligibility for nonprofit news organizations. While some nonprofits like MinnPost have been able to obtain nonprofit status, too many others have been waiting up to three years for the IRS to make a determination. Apparently the IRS does not consider journalism to be educational, an attribute key to tax exemption.
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--- nmwgfinalreport.pdf 2.51 MB