How do you save the failing businesses of our once bright newspapers?
Make them not businesses.
Why didn't I think of that? NPR isn't worried about going under because they run off of endowments and donations. We have educational institutions, why not news institutions? There is plenty of business opportunities for news commentary, collection, and whatever else online. But for the big, centralized newsrooms to hire talented workers, they need something more to keep up the bottom line.
So here is David Swensen and Michael Schmidt, from their Op-Ed piece in the NYT:
As educational and literary organizations devoted to the “promotion of social welfare,” endowed newspapers would benefit from Section 501(c)(3) of the I.R.S. code, which provides exemption from taxes on income and allows tax deductions for people who make contributions to eligible organizations.
One constraint on an endowed institution is the prohibition in the same law against trying to “influence legislation” or “participate in any campaign activity for or against political candidates.” While endowed newspapers would need to refrain from endorsing candidates for public office, they would still be free to participate forcefully in the debate over issues of public importance. The loss of endorsements seems minor in the context of the opinion-heavy Web.
Aside from providing stability, an endowment would promote journalistic independence. The best-run news organizations insulate reporters from pressures to produce profits or to placate advertisers. But endowed news organizations would be in an ideal situation — with no pressure from stockholders or advertisers at all.How large an endowment would a newspaper need? The news-gathering operations at The New York Times cost a little more than $200 million a year. Assuming some additional outlay for overhead, it would require an endowment of approximately $5 billion (assuming a 5 percent annual payout rate). Newspapers with smaller newsrooms would require smaller endowments.
Steve Coll, formerly of the Washington Post, also thinks its a good idea.
Where privatization failed, let the public give a hand. Imagine every person who gave money to Obama giving $10 to the New York Times Non-Profit. I would give $15 and I didn't even give anything to Obama. That's not quite $5B, but through in a few institutional donors, and we're almost there. Imagine a newspaper with no ads.... I would subscribe to that.