VT Journalism Collaborative Case Statement: Journalism and Philanthropy

America must re-examine its tax laws as they relate to foundation grants and philanthropic contributions to news organizations. As one veteran news analyst put it: “For-profit / non-profit… a specious distinction now. Most serious news operations are de facto non-profit.”

Given the gradual erosion of democratic fundamentals such as voting and reproductive rights, business regulation, efforts to privatize long-standing government functions such as public transportation, the military and the postal service, it’s critical that we protect and sustain our once-vital journalism infrastructure, now in serious decline. As The Atlantic recently reported, “American democracy requires informed citizens. But in many places, the industry responsible is withering before our eyes.

Although the Vermont Journalism Collaborative (VJC) is agnostic on news-gathering and distribution technologies, seeing online, broadcast, and print as equally important to sustaining a vital news operation, it is adamant that we share a clear consensus on what a responsible new organization is. The journalistic code of ethics clearly distinguishes fact from opinion and accepts responsibility for the accuracy of its work, provides context, and uses, verifies, and identifies its original sources. The Society of Professional Journalists(SPF) maintains and promulgates a comprehensive code of ethics to which responsible journalists and news organizations adhere.

As advertising revenue, once the bedrock income for local and regional news operations, shifts to online media companies and subscriptions no longer cover operating costs, many struggling news operations are asking themselves if they would be better off as non-profits, enabling them to accept grants and tax-deductible gifts. Some for-profit papers and broadcasters are even asking for donations even though they cannot offer a tax deduction, and a few have had moderate success. But any serious philanthropist is going to want deductibility.

As elsewhere in the country, VJC is exploring options for creating a 501©3 that could accept grants and tax-deductible gifts and re-grant them to struggling news operations to sustain their vital operations. The key statutory barrier is whether the conference can grant to for-profit operations in need.

In the past decade, more than 2100 local newspapers have gone out of business and about half of journalism jobs have disappeared. Journalists hold government and business to account. They educate us. A PEN America study concluded last year that as local journalism declines, “government officials conduct themselves with less integrity, efficiency, and effectiveness, and corporate malfeasance goes unchecked. With the loss of local news, citizens are less likely to vote, less politically informed, and less likely to run for office,” according to the study. This is a clear threat to democracy.

It’s time for Congress to authorize the IRS to treat national, regional, and local journalism as fundamental to democracy by extending tax-deductibility to donors who support it and to allow foundations to make grants.

We are asking that all serious news organizations be treated from a tax standpoint as non-profits and that gifts to them be made tax-deductible and foundations be allowed to grant to them.

̶ The Vermont Journalism Collaborative

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