What nonprofit ownership means for Philadelphia’s top newspapers

Terry Egger, left, publisher and CEO of Philadelphia Media Network (PMN), H.F. “Gerry” Lenfest, center, chairman of PMN and Pedro A. Ramos president and CEO of The Philadelphia Foundation hold hands after signing an agreement at the National Constitution Center in Philadelphia, Pa. (AP Photo/Rich Schultz)

At an applause-filled ceremony Tuesday replete with invocations of Joseph Pulitzer’s endowment of his eponymous prizes, ownership of Philadelphia’s top newspapers was formally turned over to a nonprofit institute created to safeguard local control and institutionalize grant-funded journalism at the outlets.

The move offers no immediate solution to the business struggles facing all metro newspapers, and early reactions about whether it was likely to spur meaningful innovation were mixed. But it should, at a minimum, provide a measure of stability at The Philadelphia Inquirer, Philadelphia Daily News, and Philly.com, which have been plagued by a series of ownership changes in recent years. And while the arrangement has some rough parallels in the industry, it also amounts to an experiment with a unique ownership structure for local media—major papers operating under the auspices of a leading community foundation.

“What would this city be without the Inquirer and Daily News? Ask yourselves,” H.F. “Gerry” Lenfest, the now-former owner of the papers’ parent company, Philadelphia Media Network, said at Tuesday’s news conference

Under the arrangement, PMN will be owned by The Institute for Journalism in New Media, a new arm of the nonprofit Philadelphia Foundation. The tax-exempt institute, jumpstarted by a $20 million endowment from Lenfest, will solicit additional funding and act as an in-house grant-maker for reporting projects and journalism innovation, eventually also awarding grants outside of PMN. The publications, meanwhile, will remain independently managed, for-profit enterprises dependent on ad and subscription revenue for their basic operations. It’s a complicated set-up:

The move comes after years of bloodletting at the Philadelphia newspapers, leading last year to consolidation of the Inquirer and Daily News newsrooms. That unification will prevent internal competition for grants, said Stan Wischnowski, PMN’s executive editor. The funding, he said, will pay for enterprise work the newspapers couldn’t otherwise sustain.

“The timing of this couldn’t be better for us,” he said. “I think there will be a range of investigative work that will be very much grant-dependent. Then, there will also be those areas where our natural traditions of coverage will kick in. A lot of it will be based on the timeliness, relevancy—all of those core areas of developing investigations.” 

The Institute for Journalism in New Media will be governed by a 10-person board, which includes Lenfest and is rounded out by academics and nonprofit executives. (Disclosure: One of them is Steve Coll, dean of the Columbia Graduate School of Journalism.) The group will solicit and vet grant proposals, awarding funds from the endowment proceeds. While the organization will focus on aiding PMN-related projects in the short-term, it intends to expand its mission outside of Philadelphia as well. “It’s kind of like a local laboratory for ideas to be tried out,” said Sarah Bartlett, a board member and dean of the City University of New York Graduate School of Journalism.

Foundation-supported journalism is nothing new at this point to many metro newspapers, including those in Philly. But the new arrangement is designed to attract more funding by allowing outside donors to make tax-deductible donations to support Inquirer or Daily News journalism, if indirectly.

The prospect of more grant-funded journalism raises its own set of questions about who sets the editorial agenda: the funders, or the newsroom. Howard Gensler, the president of the local Newspaper Guild, expressed concerns on that score in a good post by Joel Mathis of Philadelphia magazine.

David Boardman, a board member of the new institute and dean of the Temple University School of Media and Communication, said the construct creates an extra barrier to outside influence. 

“In any sort of nonprofit environment, you always want to make sure that the tail isn’t wagging the dog—that you’re not just chasing the money,” Boardman said. “In this particular case, we as an institute have no agenda other than supporting quality journalism.”

The relationship includes two-way veto power—the institute can deny the newspapers’ grant proposals, while the newspapers can turn down funding if it presents a conflict of interest—though it remains to be seen if that latter power would be exercised should the newsroom continue to shrink. Layoffs across PMN claimed 46 journalists’ jobs in November.

The board, which has yet to have its first meeting, will hire an executive director and eventually lead fundraising efforts to bolster the endowment. The board will have “nothing to do with the daily operation of the papers,” said Boardman. “They’re still going to have to make this a successful business on their own.”

For Wischnowski, who oversees the joint newsroom, adapting to a more grant-focused model will take time. “We’ve got some experience in this realm,” he said, pointing to the creation last year of a newsroom position overseeing strategic partnerships. “But it’s new at this scale, and will be a lot of learning as we go.” 

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David Uberti is a CJR staff writer and senior Delacorte fellow. Follow him on Twitter @DavidUberti.