Media, journalism, the news and grantmaking philanthropy, how do they coexist?

Par Jean-Marc Fontan , co-director of PhiLab
25 April 2019

Montreal, April 24th, 2019

 

Is access to information, through the independent press, necessary for foundations and should they support media outlets, journalism and access to information in general?

If we consider that philanthropy, in the broader sense of the term, aims to ensure, or maintain, an individual’s wellbeing within their community or in society at large,the answer is yes.

Access to information, the free circulation of information and freedom of expression are vital to the well-functioning of democratic societies. It is thus essential to ensure that this key sector – the broad domain of the news – can benefit from the required resources and adequate political framework to allow it to function correctly.

Now, in in the more limited, legal and political, sense, as defined by the federal government, in the context of the obtainment of a tax exemption status, charity (philanthropy’s official name in Canada) is oriented towards four causes: poverty alleviation, the advancement of education, religion, and all other aims that profit the collective.

The “all other aims that benefit the collective” allows the Canadian sector to support journalism and the news sector.

In theory, a society that has a democratic government, where freedom of expression and the press are promoted and defended, where numerous and diverse media platforms allow for the circulation of information, invest in investigative journalism, express a variety of points of view and do so from private companies, community organizations, and social or public businesses,”media support and access to information” should not become a significant issue for the grantmaking philanthropy sector. Further, the latter should only be called upon to do so in a marginal or in conjunction manner, and especially to support media outlets that cannot benefit from the for-profit dimension of their services.

Up until recently, this situation prevailed as much in the United States as in Canada. However, since the new Millenium, a funding emergency can be felt due to several factors, the most significant being the written press’ loss of profitability and the rise of media and electronic giants. The world of information is thus forced to revise its business model because of, amongst other things, the transfer of advertisement profits towards media giants such as Facebook, Google and others, as well as the transfer of financial investments from the traditional press to social media. We are thus in a news crisis, particularly for the written press, and the grantmaking philanthropy sector is called upon to take action.

 

What does the research say about this media crisis?

We can draw upon a few studies, mainly stemming from the United States. One of these studies, by Michel McMillan and published by the Wyncote Foundation, brings five main issues to light.

  • The first is directly correlated to the question of democracy. A free and healthy Press is one of the conditions to follow to ensure not only the proper functioning of a democratic society but also to facilitate the work of foundations in their mission.
  • The second reminds us of the importance of journalism that listen to communities, which means that journalists, on all questions, be well connected with the issues and questions that concern local, regional and national communities.
  • The third stems from the business models. It consists of rethinking the models in order to render them viable and allow a form of sustainability for media platforms.
  • The fourth issue concerns the disqualification of journalism by non-democratic ideologies seduced by “fake news.”
  • Finally, the fifth issue is ensuring the editorial independence of media platforms while maintaining a transparent business model.

 

What do grantmaking practices in the United States tell us about the information sector?

There is a recent study, published by the Center Foundation in 2013, indicating that grantmaking philanthropy’s contribution to American media is not only significant but growing: nearly two billion dollars (1.8) were given by 1 000 grantmaking foundations between 2009 and 2011 (for a total of 680 million in 2011). Also, donations reached a 21% increase during this period.

By looking at the redistribution of philanthropic donations in the United States, we observe that those directly dedicated to media are in seventh place, right after donations given to environmental causes. Specific forms of focus can be highlighted. For instance, ten foundations made 40% of all donations, and ten organizations received 22% of donations. Further, the distribution of donations is geographically uneven throughout the United States. Finally, ⅔ of the donations were earmarked for the support of a program or journalistic project. From another perspective, over half of the contributions went to the development of digital platforms (55%).

This study reveals little concerning governance or relationships being built between granters and grantees.

 

At the heart of the question of philanthropic funding of media outlets, we find the question of freedom of Press and its autonomy.

The cited study reveals that philanthropic action in the United States mainly covers the question of infrastructure. In other words, it is to ensure the maintenance and development of anything that allows for the improvement of access to information, meaning the transition towards digital platforms. A particular concern is that of access to information. This statement means that infrastructure receives more donations than interventions aimed at content development. While this is a first step, many analysts claim that it is insufficient.

Of course, it is important to fund infrastructure. However, it is also essential to ensure that journalism, while benefitting from adequate infrastructure (offices, equipment, wages, training, public policies, etc.), can operate freely, distribute reliable data and most importantly, that it be absolutely legitimate for journalists to be critical and to have the resources and the time to invest in investigative journalism. This type of support would allow for rigorous work to be done on sensitive issues.

 

I will end with the question of the media ecosystem’S sustainability. What can we conclude about the intervention initiated by grantmaking foundations to calm the traditional media crisis?

A first element indicates that the traditional media crisis is a social issue and not a fundamentally philanthropic one. In consequence, concerning this question, the intervention of foundations must be done in conjunction, be partial and cannot become a long-term recurrent form of funding.

The funding of traditional media platforms must be taken in charge by market mechanisms and be supported by adequate public policies while making room for philanthropic investment. It is thus vital to reconsider, from a cultural perspective, the place and importance that we give to information in order to modify our representation of media profitability: opening up the possibility of responsible investment, thus combining social, economic and environmental objectives, are to be explored.

A second element to aid in our reflexion calls for a profound investigation into the traditional media crisis. The transfer of advertisement profits benefits large digital platforms such as Facebook and Google. While the income of traditional media platforms, incorporated in private form, are taxed on the national scale, these large platforms intervene nationally, and thus gain advertisement income, but escape from the distribution of their tax envelope between the different countries that are part of their financial profits. In other words, taxes are paid by Google in the United States, and nothing is transferred to other national territories! This lack of transfer represents a lack of income for concerned States, which could support “Media Support Politics and Measures.”