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American journalism is at a transformational moment, in which the era of dominant newspapers and influential network news divisions is rapidly giving way to one in which the gathering and distribution of news is more widely dispersed. As almost everyone knows, the economic foundation of the nation’s newspapers, long supported by advertising, is collapsing, and newspapers themselves, which have been the country’s chief source of independent reporting, are shrinking—literally. Fewer journalists are reporting less news in fewer pages, and the hegemony that near-monopoly metropolitan newspapers enjoyed during the last third of the twentieth century, even as their primary audience eroded, is ending. Commercial television news, which was long the chief rival of printed newspapers, has also been losing its audience, its advertising revenue, and its reporting resources.

Newspapers and television news are not going to vanish in the foreseeable future, despite frequent predictions of their imminent extinction. But they will play diminished roles in an emerging and still rapidly changing world of digital journalism, in which the means of news reporting are being re-invented, the character of news is being reconstructed, and reporting is being distributed across a greater number and variety of news organizations, new and old.

The questions that this transformation raises are simple enough: What is going to take the place of what is being lost, and can the new array of news media report on our nation and our communities as well as—or better than—journalism has until now? More importantly—and the issue central to this report—what should be done to shape this new landscape, to help assure that the essential elements of independent, original, and credible news reporting are preserved? We believe that choices made now and in the near future will not only have far-reaching effects but, if the choices are sound, significantly beneficial ones.

What is under threat is independent reporting that provides information, investigation, analysis, and community knowledge, particularly in the coverage of local affairs.

Some answers are already emerging. The Internet and those seizing its potential have made it possible—and often quite easy—to gather and distribute news more widely in new ways. This is being done not only by surviving newspapers and commercial television, but by startup online news organizations, nonprofit investigative reporting projects, public broadcasting stations, university-run news services, community news sites with citizen participation, and bloggers. Even government agencies and activist groups are playing a role. Together, they are creating not only a greater variety of independent reporting missions but different definitions of news.

Reporting is becoming more participatory and collaborative. The ranks of news gatherers now include not only newsroom staffers, but freelancers, university faculty members, students, and citizens. Financial support for reporting now comes not only from advertisers and subscribers, but also from foundations, individual philanthropists, academic and government budgets, special interests, and voluntary contributions from readers and viewers. There is increased competition among the different kinds of news gatherers, but there also is more cooperation, a willingness to share resources and reporting with former competitors. That increases the value and impact of the news they produce, and creates new identities for reporting while keeping old, familiar ones alive. “I have seen the future, and it is mutual,” says Alan Rusbridger, editor of Britain’s widely read Guardian newspaper. He sees a collaborative journalism emerging, what he calls a “mutualized newspaper.”

The Internet has made all this possible, but it also has undermined the traditional marketplace support for American journalism. The Internet’s easily accessible free information and low-cost advertising have loosened the hold of large, near-monopoly news organizations on audiences and advertisers. As this report will explain, credible independent news reporting cannot flourish without news organizations of various kinds, including the print and digital reporting operations of surviving newspapers. But it is unlikely that any but the smallest of these news organizations can be supported primarily by existing online revenue. That is why—at the end of this report—we will explore a variety and mixture of ways to support news reporting, which must include non-market sources like philanthropy and government.

The way news is reported today did not spring from an unbroken tradition. Rather, journalism changed, sometimes dramatically, as the nation changed—its economics (because of the growth of large retailers in major cities), demographics (because of the shifts of population from farms to cities and then to suburbs), and politics (because early on political parties controlled newspapers and later lost power over them). In the early days of the republic, newspapers did little or no local reporting—in fact, those early newspapers were almost all four-page weeklies, each produced by a single proprietor-printer-editor. They published much more foreign than local news, reprinting stories they happened to see in London papers they received in the mail, much as Web news aggregators do today. What local news they did provide consisted mostly of short items or bits of intelligence brought in by their readers, without verification.

Most of what American newspapers did from the time that the First Amendment was ratified, in 1791, until well into the nineteenth century was to provide an outlet for opinion, often stridently partisan. Newspaper printers owed their livelihoods and loyalties to political parties. Not until the 1820s and 1830s did they begin to hire reporters to gather news actively rather than wait for it to come to them. By the late nineteenth century, urban newspapers grew more prosperous, ambitious and powerful, and some began to proclaim their political independence.

In the first half of the twentieth century, even though earnings at newspapers were able to support a more professional culture of reporters and editors, reporting was often limited by deference to authority. By the 1960s, though, more journalists at a number of prosperous metropolitan newspapers were showing increasing skepticism about pronouncements from government and other centers of power. More newspapers began to encourage “accountability reporting” that often comes out of beat coverage and targets those who have power and influence in our lives—not only governmental bodies, but businesses and educational and cultural institutions. Federal regulatory pressure on broadcasters to take the public service requirements of their licenses seriously also encouraged greater investment in news.

A serious commitment to accountability journalism did not spread universally throughout newspapers or broadcast media, but abundant advertising revenue during the profitable last decades of the century gave the historically large staffs of many urban newspapers an opportunity to significantly increase the quantity and quality of their reporting. An extensive American Journalism Review study of the content of ten metropolitan newspapers across the country, for the years 1964-65 and 1998-99, found that overall the amount of news these papers published doubled.

The concept of news also was changing. The percentage of news categorized in the study as local, national, and international declined from 35 to 24 percent, while business news doubled from 7 to 15 percent, sports increased from 16 to 21 percent, and features from 23 to 26 percent. Newspapers moved from a preoccupation with government, usually in response to specific events, to a much broader understanding of public life that included not just events, but also patterns and trends, and not just in politics, but also in science, medicine, business, sports, education, religion, culture, and entertainment.

These developments were driven in part by the market. Editors sought to slow the loss of readers turning to broadcast or cable television, or to magazines that appealed to niche audiences. The changes also were driven by the social movements of the 1960s and 1970s. The civil rights movement taught journalists in what had been overwhelmingly white and male newsrooms about minority communities that they hadn’t covered well or at all. The women’s movement successfully asserted that “the personal is political” and ushered in such topics as sexuality, gender equity, birth control, abortion, childhood, and parenthood. Environmentalists helped to make scientific and medical questions part of everyday news reporting.

Although the readership of newspaper Web sites grew rapidly, much of the growth turned out to be illusory.

Is that kind of journalism imperiled by the transformation of the American news media? To put it another way, is independent news reporting a significant public good whose diminution requires urgent attention? Is it an essential component of public information that, as the Knight Commission on the Information Needs of Communities in a Democracy recently put it, “is as vital to the healthy functioning of communities as clean air, safe streets, good schools, and public health?”

Those questions are asked most often in connection with independent reporting’s role in helping to create an informed citizenry in a representative democracy. This is an essential purpose for reporting, along with interpretation, analysis and informed opinion, and advocacy. And news reporting also provides vital information for participation in society and in daily life.

Much of newspaper journalism in other democracies is still partisan, subsidized by or closely allied with political parties. That kind of journalism can also serve democracy. But in the plurality of the American media universe, advocacy journalism is not endangered—it is growing. The expression of publicly disseminated opinion is perhaps Americans’ most exercised First Amendment right, as anyone can see and hear every day on the Internet, cable television, or talk radio.

What is under threat is independent reporting that provides information, investigation, analysis, and community knowledge, particularly in the coverage of local affairs. Reporting the news means telling citizens what they would not otherwise know. “It’s so simple it sounds stupid at first, but when you think about it, it is our fundamental advantage,” says Tim McGuire, a former editor of the Minneapolis Star Tribune. “We’ve got to tell people stuff they don’t know.”

Reporting is not something to be taken for granted. Even late in the nineteenth century, when American news reporting was well established, European journalists looked askance, particularly at the suspicious practice of interviewing. One French critic lamented disdainfully that the “spirit of inquiry and espionage” in America might be seeping into French journalism.

Independent reporting not only reveals what government or private interests appear to be doing but also what lies behind their actions. This is the watchdog function of the press—reporting that holds government officials accountable to the legal and moral standards of public service and keeps business and professional leaders accountable to society’s expectations of integrity and fairness.

Reporting the news also undergirds democracy by explaining complicated events, issues, and processes in clear language. Since 1985, explanatory reporting has had its own Pulitzer Prize category, and explanation and analysis is now part of much news and investigative reporting. It requires the ability to explain a complex situation to a broad public. News reporting also draws audiences into their communities. In America, sympathetic exposes of “how the other half lives” go back to the late nineteenth century, but what we may call “community knowledge reporting” or “social empathy reporting” has proliferated in recent decades.

Everyone remembers how the emotionally engaging coverage by newspapers and television of the victims of Hurricane Katrina made more vivid and accessible issues of race, social and economic conditions, and the role of government in people’s lives. At its best, this kind of reporting shocks readers, as well as enhances curiosity, empathy, and understanding about life in our communities.

In the age of the Internet, everyone from individual citizens to political operatives can gather information, investigate the powerful, and provide analysis. Even if news organizations were to vanish en masse, information, investigation, analysis, and community knowledge would not disappear. But something else would be lost, and we would be reminded that there is a need not just for information, but for news judgment oriented to a public agenda and a general audience. We would be reminded that there is a need not just for news but for newsrooms. Something is gained when reporting, analysis, and investigation are pursued collaboratively by stable organizations that can facilitate regular reporting by experienced journalists, support them with money, logistics, and legal services, and present their work to a large public. Institutional authority or weight often guarantees that the work of newsrooms won’t easily be ignored.

The challenge is to turn the current moment of transformation into a reconstruction of American journalism, enabling independent reporting to emerge enlivened and enlarged from the decline of long-dominant news media. It may not be essential to save any particular news medium, including printed newspapers. What is paramount is preserving independent, original, credible reporting, whether or not it is popular or profitable, and regardless of the medium in which it appears.

Accountability journalism, particularly local accountability journalism, is especially threatened by the economic troubles that have diminished so many newspapers. So much of the news that people find, whether on television or radio or the Internet, still originates with newspaper reporting. And newspapers are the source of most local news reporting, which is why it is even more endangered than national, international or investigative reporting that might be provided by other sources.

At the same time, digital technology—joined by innovation and entrepreneurial energy—is opening new possibilities for reporting. Journalists can research much more widely, update their work repeatedly, follow it up more thoroughly, verify it more easily, compare it with that of competitors, and have it enriched and fact-checked by readers. “Shoe leather” reporting is often still essential, but there are extraordinary opportunities for reporting today because journalists can find so much information on the Internet.

Many newspapers are extensively restructuring themselves to integrate their print and digital operations, creating truly multimedia news organizations in ways that should produce both more cost savings—and more engaging journalism.

Los Angeles Times reporters Bettina Boxall and Julie Cart won the 2009 Pulitzer Prize for explanatory reporting by using both the Internet and in-person reporting to analyze why the number and intensity of wildfires has increased in California. They found good sources among U. S. Forest Service retirees by typing “Forest Service” and “retired” into a Google search and then interviewing the people whose names came up. “The Internet,” Boxall said, “has made basic research faster, easier, and richer. But it can’t displace interviews, being there, or narrative.”

At the same time, consumers of news have more fresh reporting at their fingertips and the ability to participate in reportorial journalism more readily than ever before. They and reporters can share information, expertise, and perspectives, in direct contacts and through digital communities. Taking advantage of these opportunities requires finding ways to help new kinds of reporting grow and prosper while existing media adapt to new roles.

These are the issues that this report—based on dozens of interviews, visits to news organizations across the country, and numerous recent studies and conferences on the future of news—will explore, and that will lead to its recommendations.

What is happening to independent news reporting by newspapers?

Metropolitan newspaper readership began its long decline during the television era and the movement of urban populations to the suburbs. As significant amounts of national and retail advertising shifted to television, newspapers became more dependent on classified advertising. Then, with the advent of multichannel cable television and the largest wave of non-English-speaking immigration in nearly a century, audiences for news became fragmented. Ownership of newspapers and television stations became increasingly concentrated in publicly traded corporations that were determined to maintain large profit margins and correspondingly high stock prices.

Quarterly earnings increasingly became the preoccupation of some large newspaper chain owners and managers who were far removed from their companies’ newsrooms and the communities they covered. To maintain earnings whenever advertising revenues fell, some owners started to reverse some of their previous increases in reporting staffs and the space devoted to news. Afternoon newspapers in remaining multipaper cities were in most cases merged with morning papers or shut down. In many cities, by the turn of the century—even before Web sites noticeably competed for readers or Craigslist attracted large amounts of classified advertising—newspapers already were doing less news reporting.

The Internet revolution helped to accelerate the decline in print readership, and newspapers responded by offering their content for free on their new Web sites. In hindsight, this may have been a business mistake, but the motivation at the time was to attract new audiences and advertising for content on the Internet, where most other information was already free. Although the readership of newspaper Web sites grew rapidly, much of the growth turned out to be illusory—just momentary and occasional visits from people drawn to the sites through links from the rapidly growing number of Web aggregators, search engines, and blogs. The initial surge in traffic helped to create a tantalizing but brief boomlet in advertising on newspaper Web sites. But the newfound revenue leveled off, and fell far short of making up for the rapid declines in revenue from print advertising that accelerated with the recession.

The economics of newspapers deteriorated rapidly. Profits fell precipitously, despite repeated rounds of deep cost-cutting. Some newspapers began losing money, and the depressed earnings of many others were not enough to service the debt that their owners had run up while continuing to buy new properties. The Tribune chain of newspapers, which stretched from the Los Angeles Times and the Chicago Tribune to Newsday, The Baltimore Sun, and the Orlando Sentinel, went into bankruptcy. So did several smaller chains and individually owned newspapers in large cities such as Minneapolis and Philadelphia. In Denver, Seattle, and Tucson—still two-newspaper towns in 2008—longstanding metropolitan dailies stopped printing newspapers. More than one hundred daily papers eliminated print publication on Saturdays or other days each week.

In just a few years’ time, many newspapers cut their reporting staffs by half and significantly reduced their news coverage. The Baltimore Sun’s newsroom shrank to about 150 journalists from more than 400; the Los Angeles Times’s to fewer than 600 journalists from more than 1,100. Overall, according to various studies, the number of newspaper editorial employees, which had grown from about 40,000 in 1971 to more than 60,000 in 1992, had fallen back to around 40,000 in 2009.

In most cities, fewer newspaper journalists were reporting on city halls, schools, social welfare, life in the suburbs, local business, culture, the arts, science, or the environment, and fewer were assigned to investigative reporting. Most large newspapers eliminated foreign correspondents and many of their correspondents in Washington. The number of newspaper reporters covering state capitals full-time fell from 524 in 2003 to 355 at the beginning of 2009. A large share of newspaper reporting of government, economic activity, and quality of life simply disappeared.

Will this contraction continue until newspapers and their news reporting no longer exist?

Not all newspapers are at risk. Many of those less battered by the economic downturn are situated in smaller cities and towns where there is no newspaper competition, no locally based television station, and no Craigslist. Those papers’ reporting staffs, which never grew very large, remain about the same size they have been for years, and they still concentrate on local news. A number of them have sought to limit the loss of paid circulation and advertising in their print papers by charging non-subscribers for access to most of their Web content. They are scattered across the country from Albuquerque, New Mexico, to Lawrence, Kansas, to Newport, Rhode Island. Although they have not attracted many paid Web-only subscribers, their publishers say they have so far protected much of their print circulation and advertising.

Larger newspapers are seriously looking into ways to seek payment for at least some of the news they put online. Their publishers have been discussing various proposals from Internet entrepreneurs, including improved technologies for digital subscriptions, micropayments (on the model of iTunes) to read individual news stories, single-click mechanisms for readers to make voluntary payments, and business-to-business arrangements enabling newspapers to share in the ad revenue from other sites that republish their content. Whether “information wants to be free” on the Internet has become a highly charged, contentious issue, somewhat out of proportion to how much money may be at stake or its potential impact on news reporting.

The audience for public radio has been growing substantially for several decades, driven largely by its national news programs.

Only a few large newspapers are already charging for digital news of special interest. Both The Wall Street Journal and the Financial Times sell subscriptions for access to their Web sites, and the Journal also has decided to charge for its content on mobile devices like BlackBerrys and iPhones. The Milwaukee Journal Sentinel sells subscriptions to avid Green Bay Packers football fans for its Packer Insider site, and the Pittsburgh Post-Gazette offers paid membership to a niche Web site of exclusive staff blogs, videos, chats, and social networking.

One entrepreneurial venture, Journalism Online, claims that publishers of hundreds of daily and weekly newspapers have signed letters of intent to explore its strategy for enabling online readers to buy digital news from many publications through a single password-protected Web site. A Silicon Valley startup named Attributor has developed technology to “fingerprint” each news organization’s digital content to determine where it shows up on other Web sites and what advertising is being sold with it. Attributor offers to negotiate with Internet advertising networks to share that revenue with publishers who join its Fair Syndication Consortium. The Associated Press recently announced a strategy for tracking news produced by AP and its member newspapers through the Internet, and then seeking payment for it.

Entrepreneurs have also proposed ways in which news consumers could allow their reading habits on the Internet to be monitored so that news organizations could sell highly targeted groups of readers to advertisers at high prices. Google offers publishers some ways to use its search engine to seek payment for their digital news. But given the Internet’s culture of relatively free access to an infinite amount of information, no one knows whether any of these approaches would lead to new economic models for journalism.

There have been suggestions that philanthropists or foundations could buy and run newspapers as endowed institutions, as though they were museums. But it would take an endowment of billions of dollars to produce enough investment income to run a single sizeable newspaper, much less large numbers of papers in communities across the country.

U. S. Senator Ben Cardin of Maryland has introduced legislation to allow newspapers to become nonprofits for educational purposes under section 501(c)(3) of the tax code, similar to charities and educational and cultural nonprofits. Philanthropic contributions to them would be tax-deductible. But the bill, which has not moved anywhere in Congress, does not address how a newspaper that is losing money, especially one saddled with significant debt or other liabilities, could be converted into a viable nonprofit.

For all this, many newspapers are still profitable, not counting some of their owners’ overhanging debt, which may be resolved through ongoing bankruptcy reorganizations and ownership changes. And many newspapers are extensively restructuring themselves to integrate their print and digital operations, creating truly multimedia news organizations in ways that should produce both more cost savings—and more engaging journalism.

A growing number of newspapers also are supplementing their reduced resources for news reporting by collaborating with other newspapers, new kinds of news organizations, and their own readers. In the most extensive collaboration, Ohio’s eight largest newspapers—The Plain Dealer in Cleveland, The Akron Beacon Journal, The (Canton) Repository, The Columbus Dispatch, The (Cincinnati) Enquirer, the Dayton Daily News, The (Toledo Blade), and The (Youngstown) Vindicator—have formed the Ohio News Organization. They share state, business, sports, arts, and entertainment news reporting, various kinds of features, editorials, photographs, and graphics. The newspapers work independently and competitively on enterprise and investigative reporting, to which their editors say they can each now devote more of their smaller number of reporters.

The Star-Ledger in Newark has created a separate community news service that hired three-dozen younger, lower-paid journalists to report from surrounding New Jersey towns. The Seattle Times has agreed to share news Web site links and some reporting with what editor David Boardman calls Seattle’s “most respected neighborhood blogs,” to which residents contribute news to be edited by professional journalists.

Local news coverage remains underfunded, understaffed, and a low priority at most public radio and television stations, whose leaders have been unable to make—or uninterested in making—the case for investment in local news to donors and Congress.

As newspapers sharply reduce their staffs and news reporting to cut costs and survive, they also reduce their value to their readers and communities. At the same time, they are disgorging thousands of trained journalists who are now available to start and staff new kinds of local news organizations, primarily online. This sets the stage for a future for local news reporting in which the remaining economically viable newspapers—with much smaller staffs, revenues, and profits—will try to do many things at once: publish in print and digitally, seek new ways to attract audience and advertisers, invent new products and revenue streams, and find partners to help them produce high quality news at lower cost. They will do all of this in competition—and in collaboration—with the new, primarily online, news organizations that are able to thrive.

Why can’t television and radio make up for the loss of reporting by newspapers?

Some local television stations sometimes produce exemplary local and regional reporting, as demonstrated by the winners of the 2009 DuPont Award. A two-year investigation by WTVT, a Fox affiliate in Tampa, of criminal justice in nearby Hardee County led to the release of a truck driver wrongfully imprisoned for vehicular manslaughter. WFAA in Dallas, an ABC affiliate that has won more than a dozen national awards, received a special citation for three notable investigative reports in a single year.

Still, even in their best years, most commercial television stations had far fewer news reporters than local newspapers, and a 1999 study of fifty-nine local news stations in nineteen cities found that 90 percent of all their stories reported on accidents, crimes, and scheduled or staged events. In recent years, with their ratings and ad revenues in rapid decline and their once extravagant profit margins imperiled, many local television stations have made further cuts in already small news staffs. The number of television stations producing local news of their own is steadily shrinking. Some stations, such as KDNL, the ABC affiliate in St. Louis, and WYOU, serving Scranton and Wilkes-Barre in Pennsylvania, have dropped local news altogether. At 205 stations around the country, newscasts are now produced by other stations in the same cities.

In the past, the Federal Communications Commission required station owners to show they were serving the public interest before their broadcasting licenses could be renewed. But the FCC no longer effectively enforces the public-service requirement. Some cable television systems offer all-news local channels produced by the cable company itself or by broadcast station owners. The cable news channels, which recycle a relatively few news programs throughout the day, are usually lower cost, smaller-audience versions of host or collaborating broadcast stations.

On radio, with the exception of all-news stations in some large cities, most commercial stations do little or no local news reporting. A growing number of listeners have turned to public radio stations for national and international news provided by National Public Radio. But only a relatively small number of those public radio stations also offer their listeners a significant amount of local news reporting. And even fewer public television stations provide local news coverage.
Congress created the current system of public radio and television in 1967. Through the quasi-independent Corporation for Public Broadcasting, the federal government funnels about $400 million a year to program producers and to hundreds of independent public radio and television stations that reach every corner of the country. The stations, which are owned by colleges and universities, nonprofit community groups, and state and local governments, supplement relatively small CPB grants with fundraising from individual donors, philanthropic foundations, and corporate contributors. Most of the money is used for each station’s overhead costs and fundraising, rather than news reporting.

Three-fourths of the CPB’s money goes to public television, which has never done much original news reporting. The Public Broadcasting Service, collectively owned by local public television stations and primarily funded by the CPB, is a conduit for public affairs programs produced by some larger stations and independent producers that consist mostly of documentaries, talk shows, and a single national news discussion program, The NewsHour with Jim Lehrer, on weeknights.

Because PBS has no production capacity of its own, it does not do any news reporting. But as a distributor of programming, it is exploring how to improve public television news in what a Pew Foundation-funded PBS consultant described as an often dysfunctional, entrenched culture with “too many silos”—meaning the many individual stations, production organizations, and programming groups—that have not worked well together on news reporting. An internal PBS study reportedly recommends the creation of a destination public news Web site, with content from throughout public television and radio. David Fanning, the longtime executive producer of Frontline, has proposed going further. Fanning wants to create a full-fledged national reporting organization for public television with its own staff and funding. Realizing either his proposal or the vision of the PBS study would require a major realignment of public media relationships and funding. Neither would increase independent local news reporting by public television stations.

While the audience for public radio of about 28 million listeners each week is just over one-third of the 75 million weekly viewers of public television, it has been growing substantially for several decades, driven largely by its national news programs. NPR’s Morning Edition and All Things Considered are the most popular programs on public radio or television. And Morning Edition’s audience of nearly 12 million listeners alone has been about a third larger than that for NBC’s Today. Although NPR also has lost revenue during the recession and laid off staff for the first time in a quarter century, it recently launched an ambitious Web site with national news updates and stories. It also hired its first editor for investigative reporting, Brian Duffy, who is working on accountability journalism projects with reporters at NPR and local public radio stations. NPR has seventeen foreign bureaus, more than all but a few American newspapers, and six U.S. regional bureaus.

But only a small fraction of the public radio stations that broadcast NPR’s national and international news accompany it with a significant amount of local news reporting. Those that do tend to be large city, regional, or state flagship stations. Some of these operations are impressive. Northern California Public Broadcasting, for instance, with stations in San Francisco, San Jose, and Monterey, has a thirty-person news staff reporting on the state’s government and economy, education, environment, and health. Its KQED public radio and television stations in San Francisco have announced a collaboration with the Graduate School of Journalism at the University of California, Berkeley to launch in 2010 an independent nonprofit Bay area news organization with $5 million seed money from local businessman Warren Hellman. The new entity’s reporters, working with KQED journalists and Berkeley students, will cover local government, education, culture, the environment and neighborhoods for its own Web site, other digital media, and public radio and television.

“There’s going to be fragmentation. It may be a good thing. We have to think of there being a new news ecosystem.”

Some public radio stations have sought advice from CPB, asking how they could expand and finance local news coverage, using journalists who had worked at local newspapers. A just-completed CPB Public Radio Task Force Report put “supporting significant growth in the scale, quality, and impact of local reporting” near the top of its recommendations for further increasing the audience for public radio.

Under Vivian Schiller, National Public Radio’s new CEO, NPR has taken steps to help member stations with local news coverage. NPR is a nonprofit that supplies national and international news and cultural programming—but not local news—to about 800 public radio stations. These stations are owned and managed by 280 local and state nonprofits, colleges, and universities that support NPR with their dues. Schiller says her goal, approved by the board of member station representatives that governs NPR, is “to step in where local newspapers are leaving.” In its most ambitious project, NPR has created a digital distribution platform on which it and member stations can share radio and Web site reporting on subjects of local interest in various parts of the country, such as education or the environment.

Overall, however, local news coverage remains underfunded, understaffed, and a low priority at most public radio and television stations, whose leaders have been unable to make—or uninterested in making—the case for investment in local news to donors and Congress.

What are the new sources of independent news reporting?

Different kinds of news organizations are being started by journalists who have left print and broadcast, and also by universities and their students, Internet entrepreneurs, bloggers, and so-called “citizen journalists.” Many of these new organizations report on their communities. Others concentrate on investigative reporting. Some specialize in subjects like national politics, state government, or health care. Many are tax-exempt nonprofits, while others are trying to become profitable. Most publish only online, avoiding printing and delivery costs. However, some also collaborate with other news media to reach larger audiences through newspapers, radio, and television, as well as their own Web sites. Many of the startups are still quite small and financially fragile, but they are multiplying steadily.

Several new local news organizations, each different from the others, can be found in San Diego. The reporting staff of the daily newspaper there, The San Diego Union-Tribune, has been halved by a series of cuts both before and after its sale by the Copley family in May 2009 to a Los Angeles investment firm, Platinum Equity, which had no previous experience in journalism.

Five years ago, frustration with the Union-Tribune’s coverage of the city prompted a local businessman, Buzz Woolley, to fund the launch of an online-only local news organization, Voice of San Diego. The dozen reporters who work out of its light-filled newsroom in a new Spanish mission-style building near San Diego Bay focus on local accountability journalism. The site has no recipes or movie reviews or sports. The young journalists, most of whom came from newspapers, do enterprise and investigative reporting about San Diego government, business, housing, education, health, environment, and other “key quality of life issues facing the region,” said executive editor Andrew Donohue. “We want to be best at covering a small number of things. We’re very disciplined about not trying to do everything.”

The blogosphere and older media have become increasingly symbiotic. They share audiences, and they mimic each other through evolving digital journalistic innovation.

Voice of San Diego’s impact has been disproportionate to its steadily growing but still relatively modest audience of fewer than 100,000 unique visitors a month. Its investigations of fraud in local economic development corporations, police misrepresentation of crime statistics, and the city’s troubled pension fund, among other subjects, have led to prosecutions, reforms, and the kind of national journalism awards—from Sigma Delta Chi and Investigative Reporters and Editors—typically given to newspapers. To increase their reach, Voice journalists appear regularly on the local NBC television station, the all-news commercial radio station, and the public radio station, giving those outlets reporting they otherwise would not have.

The current $1 million annual budget of the Voice of San Diego, which is a nonprofit, comes from donors like Woolley, from foundations, advertising, corporate sponsorships, and contributions from citizen “members,” like those who support local public radio and television and cultural institutions. “We don’t count on mass traffic, but rather a level of loyalty,” said Publisher Scott Lewis. “We’re seeking loyal people like those who give to the opera, museums or the orchestra because they believe they should be sustained.”

They rent newsroom space from one of their supporters, the San Diego Foundation, which, like hundreds of other community foundations around the country, is a collection of local family funds with a professional staff to offer advice to the donors of these funds. Lewis said the foundation recommends contributions to the Voice. At the same time, the national Knight Foundation has been encouraging such foundations to support news and information needs in their communities through a program of matching grants. Knight and the San Diego Foundation recently gave Voice of San Diego matching grants of $100,000 each to increase its coverage of local neighborhoods and communities “underserved” by other news media.

Across town, the San Diego News Network has launched a quite different, for-profit local news Web site that resembles the Union-Tribune newspaper’s Web site much more than it does Voice of San Diego. SDNN aggregates news and information from its own small reporting staff, freelancers, San Diego-area weekly community newspapers, radio, and television stations, and bloggers. It covers most of the subjects the newspaper does, from local events, business, and sports to entertainment, food, and travel, but with less independent reporting.

Local entrepreneurs Barbara Bry and her husband Neil Senturia, and former Union-Tribune Web site editor Chris Jennewein, have raised $2 million from local investors and want to create a network of similar sites in as many as forty cities; they hope to attract more advertisers and become profitable. Jennewein said that he expects cities like San Diego, which long had a single dominant newspaper, to spawn many kinds of news entities. “There’s going to be fragmentation,” he said. “It may be a good thing. We have to think of there being a new news ecosystem.”

The most unusual San Diego startup is The Watchdog Institute, an independent nonprofit local investigative reporting project based on the campus of San Diego State University. Lorie Hearn, who was a senior editor at the Union-Tribune, persuaded her former newspaper’s new owner, Platinum Equity, to contribute money to the startup so that Hearn could hire investigative reporters who had worked for her at the Union-Tribune. In return, Hearn will provide the newspaper with investigative stories at a cost lower than if Hearn and the other Watchdog Institute journalists were still on its payroll. She intends to seek more local media partners, along with philanthropic donations, while training San Diego State journalism students to help with the reporting.

There are other examples of local-news startups around the country. The nonprofit Web site St. Louis Beacon, launched by Margaret Freivogel and a dozen of her colleagues who were bought out or laid off by the venerable St. Louis Post-Dispatch, does in-depth reporting and analysis in targeted “areas of concentration,” including the local economy, politics, race relations, education, health, and the arts. Freivogel’s budget of just under $1 million comes primarily from foundations and local donors, advertisers, and corporate sponsors. In Minneapolis, the nonprofit MinnPost Web site relies on a mix of full-time, part-time, contract, and freelance journalists for the site’s news reporting, commentary, and blogs. Editor Joel Kramer’s budget of more than $1 million a year includes foundation grants and a significant amount of advertising.

Some of the startups are experimenting with what is being called “pro-am” journalism—professionals and amateurs working together over the Internet. This includes, for example, ProPublica, the nation’s largest startup nonprofit news organization with three-dozen investigative reporters and editors. Amanda Michel, its director of distributed reporting, recruited a network of volunteer citizen reporters to monitor progress on a sample of 510 of the six thousand projects approved for federal stimulus money around the country. “We recruited people who know about contracts,” Michel said. “We need a definable culture” of people with expertise on targeted subjects, “not just everybody.”

Much smaller local and regional Web sites founded by professional journalists—ranging from the for-profit New West network of Web sites in Montana and neighboring states to the nonprofit New Haven Independent in Connecticut—regularly supplement reporting by their relatively tiny staffs with contributions from freelancers, bloggers, and readers. The fast-increasing number of blog-like hyperlocal neighborhood news sites across the country depend even more heavily for their news reporting on freelancers and citizen contributors that is edited by professional journalists. In Seattle, among the most Internet-oriented metropolitan areas in the country, pro-am neighborhood news sites are proliferating.

“The folks that used to do things for a paycheck are now doing them for cheap or for free,” she said. “Somebody has to get these reporters back to work again.”

“We believe this could become the next-generation news source” in American cities, said Cory Bergman, who started Next Door Media, a group of sites in five connecting Seattle neighborhoods. “The challenge is to create a viable economic model.” Bergman and his wife Kate devised a franchise model, in which the editor of each site, a professional journalist, reports news of the neighborhood and curates text, photo, and video contributions from residents. Editors earn a percentage of their site’s advertising revenue.

Several affluent suburban New Jersey towns outside New York City also have become test tubes for these kinds of hyperlocal news Web sites, some of which have been launched by big news organizations experimenting with low-cost local newsgathering. At the state level, other new, nonprofit news organizations are trying to help fill the gap left when cost-cutting newspapers pulled reporters out of state capitals. The Center for Investigative Reporting, a three-decade-old Berkeley-based nonprofit that had long produced award-winning national stories for newspapers and television, has started California Watch with foundation funding to scrutinize that state’s government, publishing its reporting in dozens of news media throughout California and on its own Web site.

The Center for Independent Media, with funding from a variety of donors and foundations, operates a network of nonprofit, liberal-leaning political news Web sites in the capitals of Colorado, Iowa, Michigan, Minnesota, and New Mexico, all battleground states during the 2008 presidential election. David Bennahum, a journalist and business consultant, launched the sites in 2006 with the stated mission of producing “actionable impact journalism” about “key issues.” Meanwhile, Texas venture capitalist John Thornton and former Texas Monthly editor Evan Smith have raised $3.5 million from Thornton and his wife, other Texas donors, including entrepreneur T. Boone Pickens, and foundations to start the nonprofit Texas Tribune in Austin, where they are hiring fifteen journalists to do independent, multimedia reporting about state government, politics, and policy for its Web site and other Texas news media.

Not surprisingly, most of these startups are financially fragile. In Chicago, a former Tribune reporter, Geoff Dougherty, trained scores of volunteers to help a handful of paid reporters find news in the city’s neighborhoods for his nonprofit Web site, the Chi-Town Daily News. But, in the summer of 2009, after four years of operation with a variety of foundation grants, Dougherty announced he could not raise enough money to keep going as a nonprofit. He said he would instead seek investors for some of kind of commercial local news site.

There are notable startups on the national and international front as well. The for-profit GlobalPost, for example, with money from investors, Web advertising, and fee-paying clients, produces independent foreign reporting with a string of sixty-five professional stringers. On the home front, Politico has a news staff of seventy, and delivers scoops, gossip, and commentary on national politics and government. Revenue comes mostly from advertising online and via its weekly print version, and by corporations and groups seeking to influence legislation and policy.

Meanwhile, as it separates from Time Warner and transitions from an Internet portal to a generator of Web content, AOL also is betting on special-interest, advertising-supported, professionally produced news Web sites like Politico’s. AOL has launched or purchased such Web startups as Politics Daily for politics and government, Fanhouse for sports, for business, and TMZ for celebrities and entertainment. It also is experimenting with small local new sites like Patch.com in suburban New Jersey. And like Politico, AOL has been hiring experienced journalists from struggling news media.

The quality of news reporting by most of the national, regional, and local startups is generally comparable to, and sometimes better than, that of newspapers, as can be seen by their collaboration with traditional newspapers on some stories. Small neighborhood news startups generally report on their communities in more detail than newspapers can, even though the quality of reporting and writing may not be comparable.

Collectively, the newcomers are filling some of the gaps left by the downsizing of newspapers’ reporting staffs, especially in local accountability and neighborhood reporting. However, the staffs of most of the startups are still small, as are their audiences and budgets, and they are scattered unevenly across the country. Their growth, role, and impact in news reporting are still to be determined by a variety of factors explored later in this report.

What kind of news reporting has been spawned by the blogosphere?

The boon and bane of the digital world is its seemingly infinite variety. It offers news, information and, especially, opinion—on countless thousands of Web sites, blogs, and social networks. Most are vehicles for sharing personal observations, activities, and views in words, photographs, and videos—sometimes more than anyone would want to know. A large number also pass along, link to, or comment on news and other content originally produced by established news organizations. And many of the participants—bloggers, political and special interest activists and groups, governments and private companies, and Internet entrepreneurs—generate various kinds of news reporting themselves.

Lumped together as the “blogosphere,” these sites are sometimes seen as either the replacement for—or the enemy of—established news media. In fact, the blogosphere and older media have become increasingly symbiotic. They feed off each other’s information and commentary, and they fact-check each other. They share audiences, and they mimic each other through evolving digital journalistic innovation.

“The bottom line,” said Eric Newton, Knight’s vice president, “is that local news needs local support.”

A few blogs have grown into influential, for-profit digital news organizations. Upstairs in a loft newsroom in New York’s Chelsea neighborhood, Josh Marshall’s Talking Points Memo staff is combining traditional news reporting with an openly ideological agenda to create an influential and profitable national news Web site. TPM has grown from former print reporter Marshall’s one-man opinion blog into a full-fledged, advertising-supported digital news institution with a small group of paid reporters and editors in New York and Washington. In 2008, TPM won a George Polk Award for its investigation of the political firings of U.S. attorneys during the Bush administration.

Marshall described TPM as “narrating with reporting and aggregation”—including the involvement of “an audience with high interest and expertise. We have a consistent, iterative relationship with our audience—people telling us where to look,” Marshall said. “But all the information, stories, and sources are checked professionally by our journalists.”

Marshall also believes in “the discipline of the marketplace,” and has not taken foundation money or philanthropic donations. Only advertising and small contributions from readers support TPM’s still relatively small $600,000 annual budget. Its first outside investment is coming from a group led by Netscape founder Marc Andreesen to help Marshall expand his reporting staff and advertising sales.

TPM’s combination of news reporting, analysis, commentary, and reader participation is the model in varying forms for many blogs on the Internet. Some of the more widely read and trusted independent bloggers specialize in subjects they know and have informed opinions about, such as politics, the economy and business, legal affairs, the news media, education, health care, and family issues. Freelance financial journalist Michelle Leder, for example, turned her interest in the fine print of SEC filings into the closely watched Footnoted blog, which is supported by both her freelance income and expensive subscriptions for investors to an insider version of her blog.

They also are creating new ways to report news. In 2008, Kelly Golnoush Niknejad, a Columbia University journalism school graduate, launched a blog called Tehran Bureau, to which Iranian and other journalists contribute reporting from inside Iran and from the diaspora of Iranian exiles. In 2009, Tehran Bureau joined in a partnership with the public television program Frontline, which provides the blog with editorial and financial support and hosts its Web site. Frontline and Tehran Bureau also are collaborating on a documentary.

For most of the millions of its practitioners, blogging is still a hobby for which there is little or no remuneration, even if the blog is picked up or mentioned by news media or aggregation sites. Residents of Baltimore, for example, can currently choose among a variety of blogs about life there. Baltimore Crime posts contributions from readers about what they see happening in the streets. Investigative Voice, started by two journalists from the defunct Baltimore Examiner newspaper, and Bmore News, owned by a public relations firm, focus on the city’s African-American community. InsideCharmCity posts press releases from local businesses and government agencies. BlogBaltimore aggregates reader contributions with stories from local news media. The anonymous Baltimore Slumlord Watch blogger posts photos of abandoned and derelict buildings, identifies the property owners, names the city council members in whose districts the buildings are located, provides links to city and state agencies.

The most ambitious local blog there is Baltimore Brew, launched in 2009 by Fern Shen, a former reporter for The Baltimore Sun and The Washington Post, who has recruited freelancers, including other former Sun journalists, to contribute reporting about the city and its neighborhoods, mostly without pay for the moment. Shen, who runs the blog from her kitchen table with money from an initial angel investor, acknowledged taking advantage of buyouts and layoffs that took about 120 journalists out of the Sun’s newsroom in less than a year. “The folks that used to do things for a paycheck are now doing them for cheap or for free,” she said. “Somebody has to get these reporters back to work again.” She is hoping to take advantage of being named “best local blog” by the Baltimore City Paper to raise revenue from prospective advertisers and eventually create a paying business for herself and her contributors.

National online news aggregators have created business models for mass audiences and advertising they hope will make them profitable. They aggregate blogs and some reporting of their own with links to and summaries of news reported by other media, along with plentiful photographs and videos. The small staff at Newser, for example, rewrites stories taken from news media Web sites. The Drudge Report’s Matt Drudge, who has been at it much longer, simply links to other sites’ content, along with bits of occasionally reliable media and political gossip. Founders Ariana Huffington of HuffingtonPost and Tina Brown of The Daily Beast, who are media celebrities themselves, have attracted numerous freelance contributors and volunteer bloggers, including big-name writers, to supplement their relatively small writing and editing staffs. HuffingtonPost on the left and Drudge on the right also display clear ideological leanings in their selection of stories, links and blogs.

Newspapers complain that some aggregators violate copyrights by using their work without payment or a share of the aggregators’ advertising revenue, although the aggregators also link to the original stories on the papers’ Web sites. At issue, besides the trade between paying the papers on the one hand and driving some readers to their sites on the other, is the current state of copyright law, which has not kept up with issues raised by digital publication. It has not been decided, for example, how much of a story can be republished, or in what form, before the prevailing principle of “fair use” is violated.

In a departure from other for-profit aggregators, HuffingtonPost has joined with the American News Project, a nonprofit print and video investigative reporting entity, to invest in a HuffingtonPost Investigative Fund, a legally separate nonprofit based in Washington with about a dozen investigative journalists and initial funding of $1.75 million, including $500,000 from HuffingtonPost. The fund’s editor, former Washington Post investigative editor Larry Roberts, said it will provide reporting on national subjects for use by HuffingtonPost and other news media, much the way that ProPublica does. He said that he has a commitment from Huffington that the project would be editorially independent and nonpartisan.

We are not recommending a government bailout of newspapers, nor any of the various direct subsidies that governments give newspapers in many European countries.

The fast-growing number of digital startups, ambitious blogs, experiments in pro-am journalism, and other hybrid news organizations are not replacing newspapers or broadcast news. But they increasingly depend on each other—the old media for news and investigative reporting they can no longer do themselves and the newcomers for the larger audiences they can reach through newspapers, radio, and television—and for the authority that these legacy media outlets still convey. The many new sources of news reporting have become, in the span of a relatively few years, significant factors in the reconstruction of American journalism.

How are colleges and universities contributing to independent news reporting?

A number of universities are publishing the reporting of their student journalists on the states, cities, and neighborhoods where the schools are located. The students work in journalism classes and news services under the supervision of professional journalists now on their faculties. The students’ reporting appears on local news Web sites operated by the universities and in other local news media, some of which pay for the reporting to supplement their own. In southern Florida, for example, The Miami Herald, The Palm Beach Post, and Sun Sentinel have agreed to use reporting from journalism students at Florida International University.

The University of Missouri is unique in having run its own local daily newspaper, the Columbia Missourian, since 1908, when its journalism school opened. This valuable journalism laboratory has professional editors and a reporting staff of journalism students. Other universities, meanwhile, publish local news Web sites. In New York, Columbia’s journalism school operates several sites with reporting by its students in city neighborhoods, and investigative reporting by students in the school’s Stabile Center for Investigative Journalism has appeared in several major news outlets.

Students at the Graduate School of Journalism at the University of California at Berkeley also do reporting in several San Francisco area communities for the school’s neighborhood news Web sites, and the graduate school has plans for its 120 students to work with professional journalists, beginning next year, at the local news Web site it is starting with San Francisco’s KQED public radio and television. The Walter Cronkite School of Journalism at Arizona State University in Phoenix operates the Cronkite News Service, which provides student reporting to about Arizona to thirty client newspapers and television stations around the state. And the Capital News Service of the University of Maryland’s Philip Merrill College of Journalism operates news bureaus in Washington and Maryland’s capital in Annapolis. Northwestern University students staff a similar Medill School of Journalism news service in Washington.

Universities also are becoming homes for independent nonprofit investigative reporting projects started by former newspaper and television journalists. Some are run by journalists on their faculties, while others, such as The Watchdog Institute at San Diego State University, are independent nonprofits that use university facilities and work with faculty and students. For example, Andy Hall, a former Wisconsin State Journal investigative reporter, started the Wisconsin Center for Investigative Journalism as an independent, foundation-supported nonprofit on the campus of the University of Wisconsin in Madison. Its reporting by professional journalists, interns, and students appears in Wisconsin newspapers, public radio and television stations, and their Web sites.

In Boston, Walter Robinson, a former Pulitzer Prize-winning Globe investigative reporter, and students in his investigative reporting seminars at Northeastern have produced eleven front-page pieces for the Globe since 2007. And a group of former local television and newspaper journalists on the faculty at Boston University recently launched the New England Center for Investigative Journalism in its College of Communications, staffed by the journalist faculty members and their students, in collaboration with the Globe, New England Cable News, and public radio station WBUR.

How can fledgling news reporting organizations keep going?

Money is obviously a major challenge for nonprofit news organizations, many of which are struggling to stay afloat. Raising money from foundations and other donors and sponsors consumes a disproportionate amount of their time and energy. Advertising and payments from media partners for some stories account for only a fraction of the support needed by most news reporting nonprofits.

Nearly twenty nonprofit news organizations—ranging from the relatively large and well-established Center for Investigative Reporting and Center for Public Integrity to relatively small startups like Voice of San Diego and MinnPost—met last summer to form an Investigative News Network to collaborate on fundraising, legal matters, back-office functions, Web site development, and reporting projects. Joe Bergantino, a former Boston television investigative reporter who is director of the New England Center for Investigative Reporting at Boston University, said such collaboration is vital “if we’re all going to be back next year.”

A number of national foundations—led by Knight and including Carnegie, Ford, Hewlett, MacArthur, Open Society Institute, Pew, and Rockefeller, among others—have made grants to a variety of nonprofit reporting ventures in recent years. A study by the Knight-funded J-Lab at American University in Washington estimated that, altogether, national and local foundations provided $128 million to news nonprofits from 2005 into 2009.

Nearly half of that money, however, has been given by major donors to a handful of relatively large national investigative reporting nonprofits, including ProPublica, the Center for Investigative Reporting at Berkeley, and the Center for Public Integrity in Washington. Some foundations fund only national reporting on subjects of particular interest to their donors or managers—such as health, religion, or government accountability. Grants for local news reporting are much smaller and usually not high priorities for foundations, many of which do not make any grants for journalism.

American society must take some collective responsibility for supporting independent news reporting in this new environment.

But the future of news reporting is a priority for the Knight Foundation, whose money comes from a family that once owned twenty-six newspapers. Knight has given tens of millions of dollars to nonprofit reporting projects and university journalism instruction, and is encouraging the hundreds of community foundations around the country to join with it in supporting local journalism, as the San Diego Foundation has done with the Voice of San Diego and the Greater St. Louis Community Foundation with the St. Louis Beacon. Knight conducts an annual seminar with leaders of community foundations to encourage grants to local news nonprofits and has started its matching grants initiative to donate with them. “The bottom line,” said Eric Newton, Knight’s vice president, “is that local news needs local support.” Knight foundation president Alberto Ibarguen has also been talking with national foundations for the past two years to encourage more of them to provide more support for local news reporting.

Some foundations have recognized the importance of news reporting to the advancement of their other objectives, while trying to protect the independence of the reporting. The Kaiser Family Foundation, which has long supported health care policy research, started its own nonprofit news organization in 2009. The California Healthcare Foundation, which also funds research, has given $3.2 million to the Annenberg School of Communication and Journalism at the University of Southern California to support a team of six California newspaper journalists for three years to expand health care reporting in the state. Michael Parks, an Annenberg faculty member and a former Los Angeles Times executive editor, directs the team, which has helped newspapers in half a dozen California cities report on local hospitals, the pattern of Medicare reimbursements to doctors, and causes of mortality in the state’s central valley. “We went to newspapers and asked what stories they have wanted to do, but were unable to do—no resources, no expertise, whatever,” Parks said. “We can help.”

What other new sources are there for public information?

The Internet has greatly increased access to large quantities of “public information” and news produced by government and a growing number of data-gathering, data-analyzing, research, academic, and special interest activist organizations. Altogether, these sources of public information appear to be a realization of what Walter Lippmann envisioned nearly ninety years ago when he argued that, in an increasingly complex world, journalism could serve democracy only by relying on agencies beyond journalism for dependable data. He urged journalists to make greater use of what he termed “political observatories”—organizations both in and out of government that used scientific methods and instruments to examine human affairs.

Digital databases, for example, enable journalists and citizens to find information in a fraction of the time it would have taken years ago—if it could have been found at all. Routine documents a reporter once had to obtain in a reading room of a government agency or by filing a Freedom of Information Act request can now be found online and are easy to download.

Access to much of the information is dependent on new online intermediaries. Neither house of Congress, for instance, nor any city council of the twenty-five largest American cities nor most state legislative houses make an individual legislator’s roll-call votes available in easily usable form, for example. However, that information is now available online for a fee from three different Congress-watching organizations and for free on the Web sites OpenCongress.org, GovTrack.us, and Washingtonpost.com. Princeton’s Center for Information Technology Policy has created a keyword-searchable online database of federal court records that is much less cumbersome to use than the database maintained by the courts themselves.

Some of this public information comes from government agencies that have been around for a long time, like the Government Accountability Office or the Security and Exchange Commission. Others, like the Federal Election Commission (1975) or the Environmental Protection Agency, which produces the Toxic Release Inventory (1986), or the individual departments’ and agencies’ inspectors general (most of them established through the Inspectors General Act of 1978) are products of the past several decades. All produce abundant information and analysis about government and what it regulates, information that both resembles and assists news reporting.

Outside government, advocacy groups and nongovernmental organizations have sometimes created what resemble news staffs to report on the subjects of their special interest. It is then up to journalists to separate the groups’ activist agendas from their information gathering, which, in many cases, the journalists have grown to trust. Taxpayers for Common Sense, founded in 1995, for example, has painstakingly gathered data on congressional “earmarking” that is the starting point for journalists who report on how members of Congress add money to appropriation bills for projects sought by special interests, constituents, and campaign contributors.

Besides their own version of reporting, governments and interest groups also are opening up increasing numbers of digital databases to journalists and citizens. For instance, ProPublica and the Washington-based Sunlight Foundation have created a downloadable database of two years of federal filings from 300 foreign agents on their lobbying of Congress.

Foundations should consider news reporting of public affairs to be a continuous public good rather than a series of specific projects under their control.

A database is not journalism, but, increasingly, sophisticated journalism depends on reliable, downloadable, and searchable databases. The federal government alone has fourteen statistical agencies and about sixty offices within other agencies that produce statistical data. Such data, said Columbia professor of Public Affairs Kenneth Prewitt, a former director of the U.S. Census Bureau, “has an assumed precision that the journalistic world is trained to question.” It needs to be evaluated carefully and skeptically.

The accessibility of so much more public information changes the work of journalists and the nature of news reporting. It provides reporters new shortcuts to usable, usually reliable information, saving them and their news organizations time and money. It runs the risk of drowning reporters in deep seas of data, but it makes possible richer and more comprehensive and accurate reporting.

What needs to be done to support independent news reporting?

We are not recommending a government bailout of newspapers, nor any of the various direct subsidies that governments give newspapers in many European countries, although those subsidies have not had a noticeably chilling effect on newspapers’ willingness to print criticism of those governments. Nor are we recommending direct government financing or control of television networks or stations.

Most Americans have a deep distrust of direct government involvement or political influence in independent news reporting, a sentiment we share. But this should not preclude government support for news reporting any more than it has for the arts, the humanities, and sciences, all of which receive some government support.

There has been a minimum of government pressure in those fields, with a few notable exceptions. The National Endowment for the Arts came under fire in the 1990s, for example, for the controversial nature of some of the art it helped sponsor with federal funds. So any use of government money to help support news reporting would require mechanisms, besides the protections of the First Amendment, to insulate the resulting journalism as much as possible from pressure, interference, or censorship.

From its beginning, the U.S. government has enacted laws providing support for the news media, with varying consequences. In the year following enactment of the First Amendment, Congress passed the Post Office Act of 1792 that put the postal system on a permanent foundation and authorized a subsidy for newspapers sent through the mail, as many were at the time. Those early newspapers also could mail copies to one another free of charge, creating the first collaborative news reporting. This subsidy assisted the distribution of news across the growing country for many years. While the First Amendment forbade the federal government from abridging freedom of the press, the founders’ commitment to broad circulation of public information produced policies that made a free press possible.

Nearly two centuries later, the Newspaper Preservation Act of 1970, in a specific exception to antitrust laws, allowed newspapers in the same city to form joint operating agreements to share revenue and costs in what proved to be a futile attempt to prevent single newspaper monopolies in most cities. This intervention did not work as intended, and most joint operating agreements ended with just one of the newspapers surviving.

An antitrust exemption that would allow newspapers to act together to seek payment for the digital distribution of their news would not be any wiser or do much more to support independent reporting. Antitrust laws forbid industries from setting prices in concert, which we do not think is desirable or necessary for newspapers. Individually, newspapers are already contemplating various ways to charge for digital content, and they do not need an antitrust exemption to continue.

We are not advocating or discouraging specific ways for news organizations to seek payment for digital content. We believe the marketplace will determine whether any of the many experiments will ultimately be successful. And we believe that managers of news organizations are best positioned to shape and test responses to them. For example, newspapers should develop detailed information about their digital audience to sell more targeted, and higher-priced, advertising to accompany specific digital content, while protecting individual readers’ privacy. They also should experiment with digital commerce that does not conflict with their news reporting, such as facilitating the purchase of books they review. To borrow a phrase from another digital news context, we see a long tail of possible revenue sources—payment for some kinds of unique digital content, online commerce, higher print subscription prices, even new print products—being added to diminished but still significant advertising revenues.

There is unlikely to be any single new economic model for supporting news reporting. Many newspapers can and will find ways to survive in print and online, with new combinations of reduced resources. But they will no longer produce the kinds of revenues or profits that had subsidized large reporting staffs, regardless of what new business models they evolve. The days of a kind of news media paternalism or patronage that produced journalism in the public interest, whether or not it contributed to the bottom line, are largely gone. American society must take some collective responsibility for supporting independent news reporting in this new environment—as society has, at much greater expense, for public needs like education, health care, scientific advancement, and cultural preservation—through varying combinations of philanthropy, subsidy, and government policy.

The failure of much of the public broadcasting system to provide significant local news reporting reflects longstanding neglect of this responsibility.

Our recommendations are intended to support independent, original, and credible news reporting, especially local and accountability reporting, across all media in communities throughout the United States. Rather than depending primarily on newspapers and their waning reporting resources, each sizeable American community should have a range of diverse sources of news reporting. They should include a variety and mix of commercial and nonprofit news organizations that can both compete and collaborate with one another. They should be adapting traditional journalistic forms to the multimedia, interactive, real-time capabilities of digital communication, sharing the reporting and distribution of news with citizens, bloggers, and aggregators.

To support diverse sources of independent news reporting, we specifically recommend:

The Internal Revenue Service or Congress should explicitly authorize any independent news organization substantially devoted to reporting on public affairs to be created as or converted into a nonprofit entity or a low-profit Limited Liability Corporation serving the public interest, regardless of its mix of financial support, including commercial sponsorship and advertising. The IRS or Congress also should explicitly authorize program-related investments by philanthropic foundations in these hybrid news organizations—and in designated public service news reporting by for-profit news organizations.

Many of the startup news reporting entities are already tax-exempt nonprofits recognized by the IRS under section 501(c)(3) of the tax code. Some magazines with news content, including Harper’s, Mother Jones, and The Washington Monthly, as well as public radio and television stations, also have been nonprofits for years. All are able to receive tax-deductible donations, along with foundation grants, advertising revenue, and other income, including revenue from for-profit subsidiaries. Their nonprofit status helps assure contributors and advertisers that they are primarily supporting news reporting rather than the maximization of profits. Tax deductibility is an added incentive for donors, and the nonprofit’s tax exemption allows any excess income to be re-invested in resources for reporting.

However, neither the IRS nor Congress has made clear what kinds of news organizations qualify as nonprofits under section 501(c)(3), which specifies such charitable activities as the advancement of education, religion, science, civil rights, and amateur sports. News reporting is not one of the “exempt purposes” listed by the IRS, which has granted 501(c)(3) nonprofit recognition to startup news organizations individually by letter rather than categorically. News organizations cannot be certain whether they would qualify—or whether they would be able to keep their 501(c)(3) status, depending, for example, on how much advertising or other commercial income they earn or the extent to which they express political opinions.

The IRS has not made clear whether a certain amount of a nonprofit news organization’s advertising revenue might be considered “unrelated business income” subject to tax or even might be regarded as an impediment to continued nonprofit status. And, while its regulations stipulate that a 501(c)(3) nonprofit “may not attempt to influence legislation as a substantial part of its activities and it may not participate in any campaign activity for or against political candidates,” it is not clear whether that restricts political editorial opinion apart from the endorsement of candidates.

Congress should add news organizations substantially devoted to public affairs reporting to the list of specifically eligible nonprofits under section 501(c)(3), regardless of the amount of their advertising income. Or the IRS itself should rule that such news organizations are categorically eligible under the criteria already established by Congress. The IRS also should explicitly allow news nonprofits to express editorial opinions about legislation and politics without endorsing candidates or lobbying. The Obama administration, in which the president and some officials have expressed their openness to ways to help preserve public interest news reporting, should weigh in on these policy decisions.

A possible alternative for news organizations is a Low-profit Limited Liability Corporation, known as an L3C, a hybrid legal entity with both for-profit and nonprofit investments to carry out socially useful purposes. Both private investors and foundations could invest in an L3C, with private investors able to realize a limited profit. A small but growing number of states, beginning with Vermont in 2008, have passed laws enabling the creation of L3Cs to make it more economically feasible to set up businesses for charitable or education purposes that might have difficulty attracting sufficient capital as either commercial firms or nonprofits. Illinois, Michigan, Wyoming, and North Dakota also have recently enacted L3C laws.

Each of the state laws was written to enable foundations to make “program-related investments” in the new hybrid organizations. The IRS created the concept of program-related investments in the 1960s to enable foundations to make socially useful grants to for-profit ventures. But foundations have been hesitant to make such grants because they are not certain which ones the IRS would allow. Congress or the IRS should provide a process by which a qualifying journalistic organization seeking a program-related investment from a foundation could be assured that it would qualify.

Nonprofit news organizations should, as some already have, individually and collectively through collaboration, develop professional fundraising capabilities like those of advertising departments for commercial news organizations. They also should develop other sources of revenue, including advertising, partnerships, and innovative marketing of their reporting to other news media and news consumers.

Philanthropists, foundations, and community foundations should substantially increase their support for news organizations that have demonstrated a substantial commitment to public affairs and accountability reporting.

Philanthropically supported institutions are central to American society. Philanthropy has been essential for educational, research, cultural, and religious institutions, health and social services, parks and the preservation of nature, and much more. With the exception of public radio and television, philanthropy has played a very small role in supporting news reporting, because most of it had been subsidized by advertising.

The FCC supports the public circulation of information in places the market has failed to serve. Local news reporting… is in need of similar support.

Led by the Knight Foundation and individual donors like Buzz Woolley and Herbert and Marion Sandler, foundations and philanthropists have begun to respond to the breakdown of that economic model by funding the launch of nonprofit news startups and individual reporting projects, as discussed earlier. But foundations are not yet providing much money to sustain those startups or to underwrite all of their journalism rather than only their reporting on subjects of special interest to each foundation or donor.

Foundations should consider news reporting of public affairs to be a continuous public good rather than a series of specific projects under their control or a way of generating interest and action around causes and issues of special interest to them. They should ensure that there is an impermeable wall between each foundation’s interests and the news reporting it supports, and they should make their support of accountability journalism a much higher priority than it has been for all but a few like the Knight Foundation.

These steps would represent major shifts in the missions of most national foundations. Their model of grant-making has relied on documenting specific “outcomes,” explained Eric Newton of the Knight Foundation, and it is not easy to measure the impact of news reporting. “News is not like electricity,” Newton said. “When there’s a news blackout, you don’t know what you’re not getting.” But what communities are now missing in news reporting is becoming increasingly apparent as newspaper and television station newsrooms empty out.

It is time for other national foundations to join with Knight in a concerted effort to preserve public affairs news reporting, and because of the importance of local news, the nation’s more than 700 community foundations should take the lead in supporting news reporting in their own cities and towns. Community foundations, which manage collections of donor-advised local philanthropic funds, have large assets and make large gifts. Donations from the twenty-five largest community foundations alone in 2007 totaled $2.4 billion. If community foundations were to allocate just 1 percent of their giving to local news reporting, it would roughly equal all the money that all foundations have spent annually to support news reporting in recent years.

Some community foundations have taken the first steps in this direction. Several donor-advised funds of the Greater St. Louis Community Foundation are among donors to the St. Louis Beacon. The San Diego Foundation has been a key supporter of the Voice of San Diego. The Minneapolis Foundation received a Knight grant to encourage its donors to help MinnPost pay for reporting on local subjects like education and poverty, in which the foundation has a longstanding interest and record of grant-giving.

Community foundations also should consider funding public affairs and accountability reporting not only by nonprofits but also by local commercial newspapers that no longer have the resources to fund all of it themselves. For example, James Hamilton, director of Duke University’s DeWitt Wallace Center for Media and Democracyhas proposed that local foundations finance specific accountability reporting projects, individual reporters, or the coverage of some subjects at the Raleigh News & Observer. That would not be such a big step beyond the journalism produced by nonprofits like ProPublica or the Center for Investigative Reporting that many commercial news media are already publishing and broadcasting.

Public radio and television should be substantially reoriented to provide significant local news reporting in every community served by public stations and their Web sites. This requires urgent action by and reform of the Corporation for Public Broadcasting, increased congressional funding and support for public media news reporting, and changes in mission and leadership for many public stations across the country.

The failure of much of the public broadcasting system to provide significant local news reporting reflects longstanding neglect of this responsibility by the majority of public radio and televisions stations, the Corporation for Public Broadcasting, and Congress. The approximately $400 million that Congress currently appropriates for the CPB each year is far less per capita than public broadcasting support in countries with comparable economies—roughly $1.35 per capita for the United States, compared to about $25 in Canada, Australia, and Germany, nearly $60 in Japan, $80 in Britain, and more than $100 in Denmark and Finland. The lion’s share of the financial support for public radio and television in the United States comes from listener and viewer donations, corporate sponsorships, foundation grants, and philanthropic gifts.

It is not just a question of money, but how it is spent. Most of the money that the CPB and private donors and sponsors provide public broadcasting is spent on broadcast facilities, independent television production companies, and programming to attract audiences during fund-raising drives. In many metropolitan areas, the money supports more stations and signals than are necessary to reach everyone in the community.

At the same time, outside of a relatively few regional public radio station groups, very little money is spent on local news coverage by individual public radio and television stations. The CPB itself, in its new Public Radio Audience Task Force Report, acknowledged that “claiming a significantly larger role in American journalism requires a much more robust newsgathering capacity—more ‘feet on the street’ with notebooks, recorders, cameras, and more editors and producers to shape their work” for broadcast and digital distribution by public radio stations. “The distance between current reality and the role we imagine—and that others urge upon public radio—is large,” the report concluded. And that distance is immense for the vast majority of public television stations that do no local news reporting at all.

With appropriate safeguards, a Fund for Local News would play a significant role in the reconstruction of American journalism.

The CPB should declare that local news reporting is a top priority for public broadcasting and change its allocation of resources accordingly. Local news reporting is an essential part of the public education function that American public radio and television have been charged with fulfilling since their inception.

The CPB should require a minimum amount of local news reporting by every public radio and television station receiving CPB money, and require stations to report publicly to the CPB on their progress in reaching specified goals. The CPB should increase and speed up its direct funding for experiments in more robust and creative local news coverage by public stations both on the air and on their Web sites. The CPB should also aggressively encourage and reward collaborations by public stations with other local nonprofit and university news organizations.

National leaders of public radio and television who have been meeting privately to discuss news reporting should bring their deliberations into the open, reduce wasteful rivalries among local public stations, regional and national public media, and production entities, and launch concerted initiatives to increase local news coverage. The CPB should encourage changes in the leadership of public stations that are not capable of reorienting their missions.

Congress should back these reforms. In its next reauthorization of the CPB and appropriation of its budget, Congress should change its name to the Corporation for Public Media, support its efforts to move public radio and television into the digital age, specify public media’s local news reporting mission, and significantly increase its appropriation. Congress should also reform the governance of the reformed corporation by broadening the membership of its board with appointments by such nonpolitical sources as the Librarian of Congress or national media organizations. Ideological issues that have surfaced over publicly supported arts, cultural activities, or national news coverage should not affect decisions about significantly improving local news reporting by public media.

Universities, both public and private, should become ongoing sources of local, state, specialized subject, and accountability news reporting as part of their educational missions. They should operate their own news organizations, host platforms for other nonprofit news and investigative reporting organizations, provide faculty positions for active individual journalists, and be laboratories for digital innovation in the gathering and sharing of news and information.

In addition to educating and training journalists, colleges and universities should be centers of professional news reporting, as they are for the practice and advancement of medicine and law, scientific and social research, business development, engineering, education, and agriculture. As discussed earlier, a number of campuses have already started or become partners in local news services, Web sites and investigative reporting projects, in which professional journalists, faculty members and students collaborate on news reporting. It is time for those and other colleges and universities to take the next step and create full-fledged news organizations.

Journalists on their faculties should engage in news reporting and editing, as well as teach these skills and perform research, just as members of other professional school faculties do. The most proficient student journalists should advance after graduation to paid residencies and internships, joining fully experienced journalists on year-round staffs of university-based, independently edited local news services, Web sites, and investigative reporting projects.

As in many professional fields, integrating such practical work into an academic setting can be challenging. Although much basic news reporting is routine, enterprise and accountability journalism, which by definition bring new information to light, can grow into society-changing work not so dissimilar from academic research that makes original contributions to knowledge in history and the social sciences. The capacity of the best journalists to combine original investigation with writing and other communications skills can enhance the teaching and research missions of universities.

Funding for university news organizations should come from earmarked donations and endowments, collaborations with other local news organizations, advertising, and other sources. Facilities, overhead, and fund-raising assistance should be provided by the colleges and universities, as is the case for other university-based models of professional practice. Reporting on specialized subjects in which university researchers can offer relevant expertise in such fields as the arts, business, politics, science, and health could be assisted by faculty and students in those disciplines, funded in part by research grants, so long as independent news judgment is not compromised.

University news organizations should increase their collaboration with other local news nonprofits, including local public radio and television stations, many of which are owned by colleges and universities themselves and housed on their campuses. They also should collaborate with local commercial news media, providing them with news coverage and reporting interns, as some journalism schools and their news services do now. They should provide assistance for hyperlocal community news sites and blogs.

Universities should incubate innovations in news reporting and dissemination for the digital era. They could earn money for this from news media clients, as the Walter Cronkite School at Arizona State University does for research and development work for Gannett. Universities are among the nation’s largest nonprofit institutions, and they should play significant roles in the reconstruction of American journalism.

A national Fund for Local News should be created with money the Federal Communications Commission now collects from or could impose on telecom users, television and radio broadcast licensees, or Internet service providers and which would be administered in open competition through state Local News Fund Councils.

The federal government already provides assistance to the arts, humanities, and sciences through independent agencies that include the National Endowment for the Arts, the National Endowment for the Humanities, the National Science Foundation, and the National Institutes of Health. The arts and humanities endowments each have budgets under $200 million. The National Science Foundation, with a budget of $6 billion, gives out about 10,000 grants a year. The National Institutes of Health has a budget of $28 billion and gives 50,000 grants. In these and other ways, the federal government gives significant support to individuals and organizations whose work creates new knowledge that contributes to the public good.

The Federal Communications Commission uses money from a surcharge on telephone bills—currently more than $7 billion a year—to underwrite telecom service for rural areas and the multimedia wiring of schools and libraries, among other things. In this way, the FCC supports the public circulation of information in places the market has failed to serve. Local news reporting, whose market model has faltered, is in need of similar support.

The FCC should direct some of the money from the telephone bill surcharge—or from fees paid by radio and television licensees, or proceeds from auctions of telecommunications spectrum, or new fees imposed on Internet service providers—to finance a Fund for Local News that would make grants for advances in local news reporting and innovative ways to support it. Commercial broadcasters who no longer cover local news or do not otherwise satisfy unenforced public-service requirements could also pay into such a fund instead.

In the stimulus bill passed in early 2009, Congress required the FCC to produce by February 17, 2010, a strategic plan for universal broadband access that specifies its national purposes. One of those purposes should be the gathering and dissemination of local news in every community, and the plan should include roles for the FCC and the federal government in achieving it.

We have seen into a future of more diverse news organizations and more diverse support for their reporting.

The Fund for Local News would make grants through state Local News Fund Councils to news organizations—nonprofit and commercial, new media and old—that propose worthy initiatives in local news reporting. They would fund categories and methods of reporting and ways to support them, rather than individual stories or reporting projects, for durations of several years or more, with periodic progress reviews.

Local News Fund Councils would operate in ways similar to the way state Humanities Councils have since the 1970s, when they emerged as affiliates of the National Endowment for the Humanities. Organized as 501(c)(3) nonprofits, they have volunteer boards of academics, other figures in the humanities, and, in some places, gubernatorial appointees, all serving limited terms. Local News Fund Council boards should be comprised of journalists, educators, and community leaders representing a wide range of viewpoints and backgrounds.

Grants should be awarded in a transparent, public competition. The criteria for grants should be journalistic quality, local relevance, innovation in news reporting, and the capacity of the news organization, small or large, to carry out the reporting. A Fund for Local News national board of review should monitor the state councils and the quality of news their grants produced, all of which should be available on a public Fund for Local News Web site.

We understand the complexity of establishing a workable grant selection system and the need for strict safeguards to shield news organizations from pressure or coercion from state councils or anyone in government. As stated earlier, we recognize that political pressure has played a role at times in the history of the arts and humanities endowments and in public broadcasting. But these organizations have weathered those storms, and funding for the sciences and social sciences has generally been free of political pressure. With appropriate safeguards, a Fund for Local News would play a significant role in the reconstruction of American journalism.

More should be done—by journalists, nonprofit organizations and governments—to increase the accessibility and usefulness of public information collected by federal, state, and local governments, to facilitate the gathering and dissemination of public information by citizens, and to expand public recognition of the many sources of relevant reporting.

With the Internet, the compilation of—and access to—public information, such as government databases, is far easier than ever before. Yet much of this information is not easily available, and the already useable information is not being fully exploited by journalists. Optimal exploitation of these information sources is central to the mission of journalism, as it is to the practice of democratic governance. Governments, nongovernmental organizations, and news organizations should accelerate their efforts to make public information more accessible and to use it for news reporting.

With the Obama administration taking the lead, governments should fulfill “open government” promises by rapidly making more information available without Freedom of Information Act requests. News organizations should work with government agencies to use more of this information in their reporting. The federal government has some 24,000 Web sites, a massive bounty of information that should be made more accessible by opening closed archives, digitizing what is not yet available online, and improving its organization and display so everyone can use it easily.

News organizations should also move more quickly and creatively to involve their audiences and other citizens in the gathering and analysis of news and information, as Josh Marshall has done with readers of his TPM blogs, Minnesota Public Radio has done with its Public Insight Network of radio listeners, and ProPublica’s Amanda Michel is doing with her citizen reporters. Local news organizations should collaborate with community news startups that utilize citizen reporting, as The Seattle Times has committed to do with neighborhood blogs. University scholars should archive and analyze these experiments and produce guidelines for “best practices.”

Involving thousands of citizens in the collection and distribution of public information began long before computers and the Internet. For over a century, the Audubon Society has relied on thousands of local volunteers for a national bird count that might be termed pro-am scientific research. This is similar to the reporting that volunteers all over the world do for Human Rights Watch, or the information-gathering that health workers do for the Centers for Disease Control and Prevention. The original gathering and reporting of information also includes expert investigations like those of the inspectors general in federal agencies. All of this work amounts to “adjunct journalism”—public information gathering, analysis, and reporting that is adjunct to the news reporting journalists do and available for them to use. It should be fully integrated into what journalists, scholars, and the public recognize as reporting in the public interest.

Where do we go from here?

What is bound to be a chaotic reconstruction of American journalism is full of both perils and opportunities for news reporting, especially in local communities. The perils are obvious. The restructuring of newspapers, which remain central to the future of local news reporting, is an uphill battle. Emerging local news organizations are still small and fragile, requiring considerable assistance—as we have recommended—to survive to compete and collaborate with newspapers. And much of public media must drastically change its culture to become a significant source of local news reporting.

Yet we believe we have seen abundant opportunity in the future of journalism. At many of the news organizations we visited, new and old, we have seen the beginnings of a genuine reconstruction of what journalism can and should be. We have seen struggling newspapers embrace digital change and start to collaborate with other papers, nonprofit news organizations, universities, bloggers, and their own readers. We have seen energetic local reporting startups, where enthusiasm about new forms of journalism is contagious, exemplified by Voice of San Diego’s Scott Lewis when he says, “I am living a dream.” We have seen pioneering public radio news operations that could be emulated by the rest of public media. We have seen forward-leaning journalism schools where faculty and student journalists report news themselves and invent new ways to do it. We have seen bloggers become influential journalists, and Internet innovators develop ways to harvest public information, such as the linguistics doctoral student who created the GovTrack.us Congressional voting database. We have seen the first foundations and philanthropists step forward to invest in the future of news, and we have seen citizens help to report the news and support new nonprofit news ventures. We have seen into a future of more diverse news organizations and more diverse support for their reporting.

All of this is within reach. Now, we want to see more leaders emerge in journalism, government, philanthropy, higher education, and the rest of society to seize this moment of challenging changes and new beginnings to ensure the future of independent news reporting.

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