Will nonprofit news outlets become key players in the journalism landscape in the future?

In the future, not-for-profit news companies will produce only a small percentage of the journalism in the United States. However, it is also likely that this kind of journalism will have an above average impact on audiences and the public.

On the one hand, there are a growing number of nonprofit news organizations in the United States. These emerging organizations are having an impact both on journalism business models (because they provide a viable model for other news organizations to follow) and the health of democracy in the United States (because of the journalism they are actually doing). And yet, for all the good they provide for both journalism and the public, the finances of most nonprofit news organizations are fragile. They depend on unpredictable grants from national and local foundations, private donations, audience memberships, and fundraising events.

Much of the future of nonprofit news depends on actions taken by the Internal Revenue Service. For several years during the height of the journalism financial crisis (when legacy news organizations were cutting staff and circulation at a pace which far outstripped the creation of news business models) there was a common complaint launched against the IRS that its rules and guidelines made unclear what kind of nonprofit news would be okay. The IRS had not been in the habit of designating news organizations not-for-profits, and the more politicized nature of many of these early journalism companies made for some uncertainty. For a year and a half, pressure mounted on the government to clarify the IRS rules so news organizations would know where they stood. Much of the uncertainty about the nonprofit status of news organizations has dissipated in the past few years as the IRS has clarified its criteria for evaluating news organizations, and as they in general have gotten more used to the idea. But it is important to keep in mind that, ultimately, news organizations are not totally in control of whether they get to claim tax exemptions.

Even with an increasingly smooth path to 501(c)3 status, though, it still seems likely that only a portion of news and journalism will be produced through a strictly not-for-profit business model. There are at least two reasons for this. First, the dominant media structures in the United States have been resolutely for-profit for most of the last two centuries. When institutions and organizations remain in one particular mold for a long time, the tendency is for them to remain in that mold even amid many other changes. Scholars call this "path dependency." For most news organizations, the "path" has been one oriented around commercial profit. It is likely this commercial path will start to break down to some degree, but inertia remains a powerful force.

Second, much of the news produced by nonprofit news organizations like ProPublica is niche-focused and assumes a fairly high degree of interest in politics and public issues. Involved, engaged readers are the core audience of many of these nonprofit news companies. And while it is likely that there are citizens whose needs for in-depth news reporting are currently being unmet, it also seems likely that this number is (relatively) small. In other words, nonprofit media organizations have tended to produce specialty journalism. We might even call it elite journalism! And there is only so much elite interest to go around.