It's become increasingly clear since the start of the pandemic that Vermonters value local journalism and want to support it. They not only give generously to the state's nonprofit news operations — such as VTDigger.org and Vermont Public Radio — but also want to donate to their community newspapers, most of which are, legally speaking, for-profit businesses. Ironically, many of those mom-and-pop media outlets are in dire financial straits. They could likely attract larger donations from devoted readers if doing so were advantageous from a tax perspective.
The federal Internal Revenue Service is finally coming around on this. As disinformation spreads like wildfire on social media, imperiling democracy, the IRS is starting to view all reputable journalism as a public service — and, hence, worthy of philanthropic and foundation support.
The unofficial policy shift has precipitated big changes around the country. Some for-profit newspapers have become nonprofits, such as Utah's Salt Lake Tribune, with little to no change to their business models; others are starting nonprofit organizations that can fund their work, such as the Seattle Times and the Seattle Foundation. Last month, the nonprofit that runs public radio station WBEZ bought the Chicago Sun-Times. "Tabloid journalism and public radio in the Midwest are poised to join forces" is how the Wall Street Journal summed up the unprecedented arrangement.
Small newspapers are getting organized, too. In Iowa, the newly founded Western Iowa Journalism Foundation now acts as a fiscal sponsor for a handful of small family newspapers in the area, including the Pulitzer Prize-winning Storm Lake Times, the subject of a recent documentary film. I've written about the movie several times in this column, and last week consulting editor Mary Ann Lickteig previewed its Vermont tour.
Different funding models are popping up all across the country.
At Seven Days, we are grateful to our Super Readers, whose recurring monthly donations now add up to more than $2,000 a week. The money helps pay for our journalism, which is free and accessible to all, and makes everyone in the trenches here feel valued and appreciated. At the same time, we know that Seven Days has missed out on some major gifts because donors to our local, for-profit newspaper aren't entitled to a tax deduction.
Until now. Three weeks ago, we inked a deal with a California-based nonprofit, Journalism Funding Partners, that will act as our fiscal sponsor, functioning as a bridge between large donors and fund-seeking projects that serve the public good. Run by former reporters and a diverse board of directors, the organization provides this service for a number of other for-profit media outlets across the country, including the Miami Herald and North Carolina's News & Observer.
Seven Days is JFP's smallest news partner and its first weekly client.
"Local news is local news, whether it's the Miami Herald covering a condo collapse or Seven Days covering the lack of affordable housing in Vermont. It's all important," executive director Rusty Coats said. "An educated, informed community is as important as clean air and water. If we don't put our backs into this, we won't have it."
To meet the prerequisite for tax deductibility, JFP ensures that all major gifts — including donor-advised funds — are used properly. We can't spend the money on rent or the print bill. It has to finance something of measurable public benefit.
With that in mind, Seven Days is seeking $15,000 to contribute to the hiring of a Report for America fellow to cover small towns in Vermont, as well as their challenges, opportunities and innovations; $25,000 for the next chapter of our youth-focused Good Citizen Challenge civics initiative; and $100,000 to fund our investigative journalism, such as last week's cover story about a Vermonter in jail for his role storming the U.S. Capitol. Some of our past projects have included exposing lax oversight of the state's nursing homes and extensive wait times for follow-up care at our largest hospital. Both of those stories spurred state investigations that changed things for the better.
In the end, that's the goal.