Ted Simons: An Arizona state university professor calling on the federal government to remove roadblocks to grants that would help nonprofit news organizations practice local accountability journalism. Joining us is Len Downie, Jr., we're family journalist at the Walter Cronkite school of journalism. What is local accountability journalism?
Len Downie Jr: It's what your previous guest, JJ, does, which is hold accountable those people with power and influence over the rest of us in our communities including not just the government but private industry and charities and entertainers and sports teams and so on.
Ted Simons: What is the face of local accountability journalism now?
Len Downie Jr: It's in flux. I should say it's at risk because many news organizations even including the Arizona Republic are much smaller than they were before because the ad revenue that subsidized especially accountability journalism has been shrinking and newspapers still put a high priority on investigative reporting they don’t have the resources to do as much as before. As a result the nonprofit organizations are springing up, in many cases being started by professional journalists who were squeezed out of or no longer interested in working for commercial news organizations because they couldn't do that investigative reporting any more. They start with foundation money and then private contributions and they begin doing investigative reporting and in many cases they are collaborating with the commercial news organizations to provide reporting that they couldn't otherwise do.
Ted Simons: Why would you see now nonprofits and the start-up nonprofits as maybe being an answer to fill in the gaps as opposed to the commercial news enterprises that we're familiar with and the ones that had been successful, reinventing themselves?
Len Downie Jr: They are reinventing themselves, some more successfully than others, becoming the multi-media multi-platform and so on, also trying to reinvent their economic models. But they are never going to be -- the newsrooms will never be as big as they were before. California is a good example where there are far fewer reporters now covering the state of California, doing accountability journalism about the state. California watch is a nonprofit up over the last four, five years supported by big foundations in California. They now provide this kind of investigative reporting and coverage of the state that newspapers and television stations throughout California.
Ted Simons: How do you make sure the nonprofits are independent, that the foundations that subsidize, if you will, keep these things afloat aren't giving suggestions?
Len Downie Jr: That's a very good question, the same way that advertisers usually have not influenced newspaper coverage or television coverage in the past. That means maintaining independence from your funders. Staying completely transparent about your funding. Putting on your website everyone making contributions to you. It means never taking money from somebody who wants you to cover something a certain way. Somebody comes to you as a nonprofit says, I want to save the whales. Here's $2 million. You have to say, we're not in the business of saving whales. If you want better coverage of the environment come what may, we'll take the money to do that, but not to carry out your specific wishes.
Ted Simons: how do you get people to fund nonprofit organizations when they hear that, that's not much of a deal.
Len Downie Jr: it's the same appeal that's made to people who will fund nonprofit ballet companies, nonprofit organizations like channel 8, who are doing it because it's a public good. See that local accountability journalism is a public good threatened by the Marketplace, losing its market and needs philanthropic support.
Ted Simons: Are you saying the Feds are reluctant to grant 501C3 status?
Len Downie Jr: There are a lot of people seeking status which allows you to do two things. You don't have to pay taxes if you kick in more than you say you spends, which is seldom the case for nonprofits. More importantly, the people who contribute to you including foundations can maintain their tax exemptions or get tax breaks if you're a private individual. So as a result a lot of people trying to start new 501C3s for good purposes but including some for political purposes there are organizations that are essentially engaged, for instance some of the pacs doing some of the commercials for the presidential campaigns are 501C3. People say, wait a minute, they are political. When these news organizations come along seeking 501C3, the IRS started giving them one at a time but there's no particular provision in the law for that. They are being treated as charitable foundations and the IRS is saying, aren't you the same as a regular commercial news organization or are you engaged in political reporting that we ought to be concerned about? The IRS is puzzled about how to proceed. They don't explain themselves, we're just trying to figure this out.
Ted Simons: how can you help them? Do you say these nonprofits you can't endorse candidates or issues?
Len Downie Jr: Yes.
Ted Simons: You have to set guidelines.
Len Downie Jr: Yes. There have been some applicants who said they want to endorse candidates and it hurts it for everybody else. Those are the kinds of stipulations you need to make to the IRS. I think the IRS needs to 16 designate public affairs news organizations that are not engaged in political activity as 501C3s automatically instead of the months that go by with very fragile nonprofit organizations looking for money and not getting that status.
Ted Simons: fragile indeed. We talked about nonprofit news on a number off indications here. They pop up, they go away. They are here, they're gone. There's not a lot of stability because there's not a lot of funding. Is this basically go to the Feds and say, help this group a little bit?
Len Downie Jr: To some extent, at least to make it possible for philanthropists and ordinary donors to contribute. There's a big debate we had here with another colleague over whether the government should grant money directly. That's not going to happen in these current budget times, but the government could make it easier for foundations to contribute. They could make it clearer it's alright for foundations to contribute to journalism. One of the big possibilities are the community foundations that exist in communities across the country including here in Arizona. More than 700 in the United States, hundreds of millions of dollars. They are collections of funds of local wealthy individuals who put their money in these foundations to improve their communities. My contention is that local accountability journalists help improve your community so those foundation they ought to be giving more money to local accountability journalism. They are doing it in some communities around the country but not enough.
Ted Simons: the nonprofit aspect, your quote was vital need for the nation.
Len Downie Jr: absolutely.
Ted Simons: good to have you. We'll keep an eye on that. That literally -- as you see it that's the future. It's got to be.
Len Downie Jr: Yes, it's going to be an important part of the future. We're no longer going to have one size fits all like commercial media used to be. It will be all different kinds and has to include the nonprofits.
Ted Simons: good to see you again.