The rise in the number of nonprofit journalism organizations has been heralded as one of the news industry’s most promising recent developments. Veteran reporters, tech-savvy journalists and members of the public are starting vibrant journalism nonprofits to fill the gaps commercial media are creating as they consolidate and slash newsroom jobs.
The early results are promising. Nonprofit journalism websites have won Pulitzer Prizes, pioneered innovative community-engagement efforts and begun important collaborations that are putting the value of public service journalism back in the heart of local media. But complex, contradictory and out-of-date tax laws threaten the survival of these organizations. To ensure the long-term health of these projects, we need to update our tax code to account for what is both a new kind of journalism and a new kind of nonprofit.
Since 2008, there has been a spike in applications for 501(c)(3) nonprofit status from journalism organizations. This uptick has raised red flags at the IRS. Even though many journalism nonprofits existed prior to 2008 and received IRS approval, the agency has traditionally taken a skeptical view of journalism as a charitable activity. Now the IRS has bundled recent applications from nonprofit news organizations and is studying them carefully because they have the potential to set a new precedent. This is hindering the growth and sustainability of nonprofit journalism efforts and threatens to undermine even longstanding organizations.
In the short term we must call on the IRS to rule favorably on the applications currently under review. In the long term we need a policy solution that will pave the way for a new era of nonprofit news in America.