The Future of Funding for the U.S. Free Press

By Elly Boes

This year, veteran journalists from my hometown announced Nebraska’s first statewide independent, non-profit news organization, the Flatwater Free Press. Like any good reporter, I immediately texted my mum.

“One of the founders looked familiar, Kent Warneke who ran the Norfolk Daily News,” I wrote, adding, “made me think of grandpa.”

Every Sunday, my mum and I would visit her dad to have tea and read the latest edition of the Norfolk Daily News, a small newspaper he borrowed from our public library each week for over 30 years.

“Oh my gosh that is wonderful Elly!! He ran a great paper,” my mum replied.

It was the first good news I’d seen about the news industry in months.

Since the pandemic began, it’s estimated that thousands of newsroom employees were furloughed, laid-off or received pay cuts, particularly in print media.

In digital newsrooms, however, employment rates rose 144 percent between 2008 and 2020, according to the Pew Research Center. The Institute for Nonprofit News (INN) saw audience engagement and revenue increase with 43 percent more web traffic directed to non-profit news sites in 2020 compared to previous studies.

As non-profit models see increased success, national policymakers are beginning to catch up, begging the question—what funding best serves the future of the free press in the United States?

One option currently on the table is federal government intervention.

First introduced in 2020, “The Local Journalism Sustainability Act” garnered bipartisan support in recent months, offering tax credits for local news’ subscribers and advertisers as well as compensation for journalists.

While financial assistance would be available to both for-profit and non-profit organizations, critics of the bill argue it won’t address the inherent inequities in local journalism, and rightly so.

Currently lacking in the bill is any discussion around failed advertising models, which often result in major newspaper buyouts by private equity firms like Alden Global Capital, which now owns The Chicago Tribune among others.

Such changes have left non-profits with largely freelance staff. These employees may be excluded from the bill due to a requirement that compensation can only be paid to a local journalist who works at least 100 hours over a three-month period.

Additionally, subscription and funded efforts by Congress may leave minority-owned newsrooms with unequal financial support. A study by SHE Media found less than 15 percentof under-represented publishers saw increased ad-revenue support despite corporate promises to equalize spending since 2020.

But it isn’t just newsrooms that suffer without consistent funding amid a crisis. When the last recession hit in 2008, both my parents and grandparents cancelled our newspaper subscriptions because they were too expensive.

Like other Americans, we turned on broadcast news instead, leaving many of our local newspapers in distress or under new ownership.

Yet non-profit news organizations—both digital and print—are more than surviving this pandemic.

A 2017 study by the Media Insight Project found that just 54 percent of its 2,199 participants paid for access to local news.

Yet the latest data from INN observed that two-thirds of all newsrooms surveyed over the last year received increased individual donations.

Still, major contributions—of $5,000 or more—make up the majority of funding for non-profit models, both in individual and foundational giving.

Given this—and the havoc wreaked on journalism by COVID-19—it’s unclear how sustainable any local news organization will be without any assistance from state or federal grants.

Despite ethical concerns, government assistance for the free press has been employedmany times in the past, including the beginning of the pandemic. The Paycheck Protection Program—or PPP, an example of crisis funding—provided newsrooms with wage relief but disqualified many local papers because they are owned by larger companies.

It’s important to note here that most non-profit news organizations—like Nebraska’s Flatwater Free Press—establish themselves in local markets because other legacy papers don’t have the resources to cover specific investigative or community needs.

Like my grandpa, this means audiences seeking free news alternatives during a crisis most often find them at public institutions, such as libraries, or online.

To Matt Hansen, founding editor of the Flatwater Free Press, non-profit models with funding from a variety of sources are key to keeping the free press not only accessible but alive and well.

“The early indications of success in fundraising have really blown me away,” Hansen said in an interview with Nebraska Public Media. “It becomes very clear very quickly, when you got any talk about this project, or projects like this, that people understand the need for this in a way that surprises even me.”






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