THE INCREASINGLY urgent debate over how to maintain robust news coverage in America during a time when the economic model appears to be collapsing has been taking place on two parallel tracks - for-profit and nonprofit solutions. Each appears insufficient in its own way.
David Swensen, manager of Yale's endowment, has proposed a way to bring the nonprofit approach to scale: Convert struggling newspapers to nonprofits and create large endowments to cover their editorial operations. He has written that for $5 billion The New York Times could be preserved in perpetuity. Steve Coll, president of the New America Foundation, has noted that the Washington Post could be endowed for $2 billion.
Forget for a moment where all those billions would come from. Endowing an entire news staff is a solution that exceeds the dimensions of the problem. Advertising is declining at major newspaper companies, but it is a long way from vanishing. It is a revenue source that needs to be supplemented, not replaced.
Ad revenue would likely still pay for Redskins coverage, but grant money could underwrite that expensive bureau in Baghdad. A newspaper could still raise an endowment to ensure its future. But with ad dollars continuing to flow in, a newspaper like the Post wouldn't need anything close to $2 billion.
This merging of for-profit and nonprofit models faces some serious objections. Why should the tax laws give an advantage to newspapers over other kinds of media? How will the recipients of philanthropic dollars avoid having their news agendas distorted by donor preferences? Would the crutch of donor support hinder the search for new commercial revenue necessary for news organizations' long-term viability?
All are good questions, worthy of debate. But at a time when the prospect of no-newspaper towns is looming, an approach that allows newspaper companies to benefit from both for-profit and nonprofit revenue streams is well worth considering.
