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News organizations scan the not-for-profit landscape

Maybe Mitt Romney was right to be suspicious of those who don't pay taxes: The news organization that derailed his campaign's re-boot this week has never paid income taxes.

That's because Mother Jones, the left-leaning investigative journal born 36 years ago above a San Francisco McDonald's, is a not-for-profit operation. Which is why, as traffic to MotherJones.com rocketed from an average of about 250,000 visits per day to roughly 2.5 million on Tuesday, fuelled by people eager to see a video of Mr. Romney putting both feet in his mouth during a dinner with wealthy donors, readers were greeted by a pop-up ad appealing for a $5 donation "to help us produce more investigative reporting."

"We had a pledge drive going when the story hit," explained Clara Jeffery, the magazine's co-editor, in an interview. (I spoke with her after midnight on Wednesday; she's had a busy week.) While there's no way yet to know if online donations have spiked, she said one grateful person walked into the Mother Jones bureau in Washington, D.C., to hand-deliver a cheque.

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And as misery continues to spread across the entire news industry, Mother Jones may be getting some company, with more news organizations looking seriously at the not-for-profit model as a way to keep the lights on. "I think people are more willing to look at it, not only because there's clearly trouble on the commercial landscape, but because there's success on the non-profit landscape," said Ms. Jeffery.

(Mind you, most of the success is in the U.S. Here in Canada, there is so far depressingly little not-for-profit journalism. And no, for-profit newspapers that aren't making profits don't count.)

In 2007, the savings-and-loan billionaires Herbert and Marion Sandler pledged $10-million a year to fund the start-up Pro Publica, a not-for-profit investigative newsroom headed by Paul Steiger, a former managing editor of the Wall Street Journal. By 2010, it had already won its first Pulitzer, for a post-Katrina New Orleans dispatch co-published with The New York Times.

These days, Pro Publica's probes of the so-called 'dark money' funding U.S. politics are a grave talking point in Washington, and its investigations into fracking are helping to keep that issue alive. Best of all (at least for the public interest), it builds impressive databases and then makes that information available to any other news organization willing to credit Pro Publica.

The Center for Investigative Reporting is another Bay Area non-profit, born in the shaggy days of the late-1970s, whose work has sparked congressional probes, led to the creation of new environmental laws, and exposed government corruption. In the past few years, an infusion of new blood has re-energized the centre, even as other news organizations have cut to the bone .

"There's so few places, outside of the big papers, that really have substantial groups of people out reporting," noted Ms. Jeffery.

A few years ago, Mother Jones set out to expand its Washington, D.C. bureau from a skeleton staff of two to 10, "exactly when the world was crashing down around journalism."

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Sure, advertising revenues were drying up, but organizations like Mother Jones that didn't depend as much on ads didn't have as far to fall. "Because we were a non-profit, we had these other strands of revenue, so we were able to withstand that I think better than some," said Ms. Jeffery.

"There were tons of media layoffs, and we started hiring people. It didn't make up for the bloodletting going on, but we could go to donors and say: 'We think this is important – especially because there are so many journalists being laid off, what's going to happen if there aren't people serving as watchdogs on these institutions?'"

Since then, Mother Jones has accumulated a bushelful of laurels, including two National Magazine Awards.

While tax-exempt status is alluring, the Internal Revenue Service doesn't rubber-stamp applications. Not-for-profits are barred from endorsing political candidates, and the journalism must be deemed to have "educational value." Still, as newspapers disappear from the landscape, the IRS may be adopting a looser approach. Last week, when the San Francisco Public Press was granted tax-exempt status after a 32-month wait, Harvard's Jeff Hermes suggested in an essay that the decision meant the IRS "has now recognized that the Public Press does serve a critical educational function in a media landscape with gaping holes in news coverage and numerous under-served communities."

That describes many communities in North America these days. Which means that, if newspapers want to survive, more and more might do well to adopt a not-for-profit model. Sure, it might be Mitt Romney's nightmare, but it could also be a journalist's dream.

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About the Author
Senior Media Writer

Simon Houpt is the Globe and Mail's senior media writer, charged with covering the industry's transformation. He began his career with The Globe in 1999 as the paper's New York arts correspondent, covering the cultural life of that city through Canadian eyes. More

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