A Money-Saving Idea: Turn Newspapers into Foundations

Jack Shafer, Slate‘s editor-at-large, doesn’t think much of proposals to save money-losing newspapers by converting them into charities, using their assets as endowments. Some pundits are starting to argue that this is the best way to save papers like the New York Times and Washington Post, which are losing subscribers and advertisers. They think financial cut-backs are hurting “quality” journalism and that “legacy” newspapers like the Times and Post owe it to themselves and American democracy to re-organize themselves as nonprofit trusts. (I take it that the phrase “legacy newspapers” is comparable to “legacy airlines”: companies whose fixed costs put them on the verge of bankruptcy.)

Shafer thinks newspapers need to respond to changing market conditions, and they are fooling themselves if they think the foundation model can insulate them from hard times, new technologies, and evolving customer preferences. Foundations also change over time, and their officers can be expected to meddle in matters about which they know nothing. Shafer cites CRC’s book The Great Philanthropists and the Problem of ‘Donor Intent’ by Martin Morse Wooster to highlight the probem. 

Says Shafer: “Foundations can evade ideological takeover by setting “term limits” on their operations, spending down their cash, and vanishing, as the John M. Olin Foundation did. But if the point is to stake the Times for perpetuity, the biggest problem will be keeping the foundation hustlers from taking over. In my experience, foundations that fund journalism directly—as opposed to journalistic education—are more interested in promoting what they consider “social justice” than promoting journalism. For them, a newspaper is just a means to an end.”

Robert Huberty

Robert Huberty served as vice president of the Capital Research Center.
+ More by Robert Huberty

Support Capital Research Center's award-winning journalism

Donate today to assist in promoting the principles of individual liberty in America.

Read Next