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As advertising revenue for small news organizations dries up, donor money from foundations is playing a bigger role. This relationship presents some new ethical questions for journalists: Who should newsrooms accept money from? On what terms? And how should they disclose that relationship to the public? In considering these questions, we were reminded of an incident that happened at PBS in 2013, when the broadcaster announced “Pension Peril,” a two-year series on a crisis in public employee retirement benefits. The series ran during PBS NewsHour Weekend and was spearheaded by its flagship New York station, WNET. 

However, PBS failed to disclose that the series was funded with a 3.5-million-dollar grant from the Laura and John Arnold Foundation, founded by John Arnold, a billionaire hedge-funder with a history of involvement in pension policy reform. Journalist David Sirota, who worked at PandoDaily at the time, condemned PBS for soliciting funds from the foundation. “Monied interests are increasingly permitted to launder their ideological and self-serving messages through the seeming objectivity of public television,” he wrote. 

The revelation prompted WNET’s vice president of programming, Stephen Segaller, to issue a mea culpa: “We made a mistake, pure and simple. The PBS NewsHour Weekend is a new production and while we thought we were following the guidelines and the correct vetting processes, we were incorrect. WNET sought the Arnold Foundation funding because of our belief that public pensions is an important issue. The Arnold Foundation did not direct or prescribe our reporting, never attempted to do so, and is not responsible for our mistake.”

Yet PBS had flunked its own “perception test,” meant to assess whether a funding relationship gives the appearance of influence, even if the journalists involved claim they haven’t been swayed. As the network explains in its submission guidelines and proposal process, PBS should “even avoid the public perception that program funders have influenced professional judgments. Should a significant number of reasonable viewers conclude that PBS has sold its professionalism and independence to its program funders, whether or not their conclusions are justified, then the entire program service of public television will be suspect and the goal of serving the public will be unachievable.”

Less than three months after the series debut, WNET announced in a statement that it would return the Arnold Foundation’s gift “in order to eliminate any perception on the part of the public, our viewers and donors that the foundation’s interests influenced the editorial integrity of the reporting for this program.”

Instances like WNET’s are rare, but the fear that funders may influence how a subject is covered is a common refrain among critics of nonprofit newsrooms. That concern has only grown as the number of nonprofit newsrooms has exploded over the past decade. When PBS launched “Pension Peril,” the nonprofit news consortium Institute for Nonprofit News had 95 members, and a Pew survey recorded 172 nonprofit newsrooms. Today, INN has 450 members. 

As local for-profit news organizations have folded or contracted over the past decade, nonprofit newsrooms have stepped in to fill the void. These newsrooms might be focused on a single issue, a distinct style of reporting, or a specific demographic or locale. They support themselves through a mix of donations, membership programs, subscriptions, foundation grants, donor-advised funds, partnerships, events, and sponsorships. Foundations are among the largest funders of these newsrooms. According to Media Impact Funders, foundations have given eleven billion dollars to nonprofit journalism organizations worldwide since 2009. 

This funding comes with its own ethical quandaries. How can nonprofit newsrooms balance the tension between maintaining donor relationships and preserving editorial independence?  

Evan Smith spent eight years as the editor in chief of the for-profit publication Texas Monthly before founding the nonprofit newsroom the Texas Tribune in 2009. Smith, who stepped down from his role as Tribune CEO in 2022, says that, in practice, there shouldn’t be much of a difference between the ethics of a for-profit newsroom and those of a nonprofit newsroom. With trust in news at an all-time low, both are facing operational scrutiny.  

“In a lot of ways, the imperative to be ethically beyond reproach is no different today than it would have been ten or twenty or thirty years ago,” he said. “The difference is that today, like fourth graders in math class, we’re obligated to show our work.”

That means publicly disclosing funders and publishing ethics guidelines that explicitly state their relationship with them. (The Tribune’s guidelines are here.) A 2023 survey of funders, for-profit newsrooms, and nonprofit newsrooms from the University of Chicago’s NORC Institute, Media Impact Funders, and the Lenfest Institute found that around half of the 293 nonprofit news operations surveyed had written guidelines about what money they would accept and 68 percent had a written policy regarding disclosing funders. Among the 138 for-profit newsrooms NORC surveyed that had accepted grant and foundation money, 72 percent said they did not have a policy about disclosing funders.   

At the Tribune, all donors who give a thousand dollars or more are listed publicly on its site, and anonymous donations aren’t accepted. 

“If you know the source of the gift and you’re not revealing it to the readers, that’s bad. If you yourself don’t know the source of the gift, and—as a consequence of not knowing—it can’t be in the position of impacting your journalism on the basis of who it is, then there’s a belief by some that that’s okay,” Smith said. In some cases, for example, donor-advised funds may have donors who have elected to remain anonymous. But Smith said the Tribune recently turned down a fifty-thousand-dollar donation because the donor wished to remain anonymous. 

“If we can’t tell the public where every single dollar comes from, then we’re not being transparent about the sources of our funding,” he said. 

Disclosing funders also keeps newsrooms accountable to their employees, says Jessica Huseman, the editorial director of Votebeat, a nonpartisan nonprofit news organization focused on voting rights and election integrity. 

“If we took a weird turn, it should be reasonable for our reporters to be like, ‘I wonder why they’ve published this really weird, out-of-character post,’ and then look at our donors and see, like, ‘Oh, wow, yeah, they just got a big check from x person who has a vested interest in this thing.’”

Sharene Azmi, the communications director at INN, agrees that financial transparency is key to running an ethical nonprofit. INN vets all its members for editorial independence and financial transparency. She also believes concern around nonprofit newsroom donors affecting coverage is overblown. “People said the same thing about advertisers—that advertisers were going to influence content,” she said. “The media industry has been navigating this for years.

Votebeat’s Huseman says the ethics of nonprofit newsrooms closely mirror those of for-profit organizations. “You have to be really specific with who in your newsroom gets to talk to funders and who doesn’t, and what conversations can be had about funders and which ones can’t,” she said. “Our reporters do not speak to funders, do not do funding events, and they do not suggest potential funders to our development staff.” 

But that doesn’t mean that journalists are immune from every funder request. At Votebeat, reporters and editors may be asked to conduct webinars on election issues at the behest of funders, says Huseman. Having a defined mission and coverage area helps to keep roles clear. “Donors who are coming to us know what they’re getting when they give us money. So I think we have a little bit of an easier time with it. I think good nonprofits have those sorts of firewalls set up,” Huseman said.  

She recognizes that small newsrooms do sometimes have to blur responsibilities. Before Votebeat had a development director, Huseman had to make fundraising calls herself, and she still interacts with donors, though she has put guardrails around those conversations. Smith, similarly, often met with potential donors when the Tribune first launched. 

To mitigate the ethical dilemma, Huseman says, she won’t say anything about the organization to a funder that she wouldn’t tell anyone on the street. “They’re not going to get inside information as to what our reporters are working on. If they ask for insight into our plan for covering [an] election, I will refer them to articles that we have posted about that,” she said.

Single-topic newsrooms, like Votebeat, rely on a greater share of foundational funding than other types of nonprofit newsrooms, according to a 2022 INN report. Even if these arrangements yield good work, they present the risk that newsrooms might bend their editorial strategies to align with foundation values (and funding), or that journalists might feel hobbled by the constraints of foundation goals.   

In a 2019 paper on foundation funding and the boundaries of journalism, Martin Scott, a professor of media and global development at the University of East Anglia, and his coauthors, City University journalism professor Mel Bunce and Kate Wright, founder of the Edinburgh Futures Institute’s media and communications program, argued that this type of targeted funding has changed “the role that journalists play in democracy” toward “outcome-oriented, explanatory journalism in a small number of niche subject areas.” This is especially the case, they observed, among international journalism nonprofits and less established markets, where both journalists and funders are less clear about the ethical boundaries around nonprofit support. 

“Foundation funding ultimately encourages journalists to focus on producing longer-form, off-agenda news coverage about topics that broadly aligned with the priorities of the most active foundations,” they wrote. 

Nonprofit newsrooms don’t usually admit to being swayed by donors, but it does happen. Of the 138 outlets that NORC spoke with, four said they “hardly ever” made changes to content as a result of donor interference, and one said it “only sometimes” did. Another said it made content changes “about half the time.”

Five outlets out of the 138 surveyed said funders that underwrite editorial work “very rarely” see editorial content before it’s published, while four admitted that their funders have access to their content prepublication “usually” or “always.”

Funders affect newsrooms in less direct ways, too. NORC Institute’s survey of 129 granting foundations found that nearly a third had funded journalism aimed at producing an investigation into a specific topic area. This occurs in both nonprofit newsrooms and among for-profit newsrooms that pursue grants for coverage (the New York Times, for example, accepted grants from three foundations to fund its Headway Initiative, a program aimed at providing in-depth coverage of social issues) and is not unlike newsrooms’ traditional pursuit of targeted advertising for special reports or sections. The difference is that newsrooms are used to erecting barriers between themselves and advertising departments; barriers between newsrooms and funders are often most necessary in smaller or nonprofit organizations where journalists already wear many hats.

Huseman believes that pursuing overly specific grants can lead to “mission creep” that ends up affecting long-term sustainability.  

“A lot of nonprofit newsrooms get into this race to the bottom, where they’re committing themselves to doing all these external projects that they wouldn’t otherwise do in order to get money that they otherwise wouldn’t get,” Huseman says. “And so they’re just spreading themselves so thin that the mission and the reason they founded the newsroom in the first place sort of gets lost.”

Ultimately, she says, “there’s no handbook for nonprofit newsrooms and how they interact with donors and how they don’t.” It’s the responsibility of the newsroom to set its own boundaries. 

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