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New Media Transparency Challenges

Since June, when J-Lab released “New Media Makers,” its new study of grant-funded media projects, we’ve tracked another $7.5 million awarded by foundations to support or jumpstart news and information initiatives around the country.

Confirmed grants now total nearly $135.7 millions since 2005, up from $128 million reported in June.  This funding went for 322 grants to 125 projects in 19 states and it came from 206 foundations. The vast majority, more than $65 million, have gone to 11 investigative reporting initiatives; six of those have only launched since 2005. Indeed, at least 102 of the projects we’ve tracked to date have only come into being since 2005. Funding to public broadcasters was not included in this particular study.

Tracking and confirming this activity, however, has given us a taste of the transparency challenges emerging in the new media ecosystem.  In short, it ain’t easy to figure out who’s funding the new content generators, even as they become increasingly important sources of news.

With established news outlets cutting newsgathering and news space, these new media makers are helping to ensure that important developments in their cities, regions and states get covered. And philanthropic foundations, deeply concerned about the role of information in a democracy, are stepping up to support more and more non-profit news ventures with grants.

So what’s the problem? Simply put, nonprofit organizations such as many of the new media ventures are <em>not required</em> to disclose their individual contributors to the public – only to the IRS via Schedule B of their 990 tax returns.  The exceptions are private foundations, which are required to disclose their grantees, and 527 political organizations, which are required to disclose their contributors.

With legacy newspapers, it was easy to see where most of their money came from. You could look at the classified and display ads, which used to account for the majority of their revenue, or you could listen to the commercials in the case of television news. And if the companies were publicly held, more information was available.

Some of the most respected new media makers do place a high value on transparency.  Ask the Center for Public Integrity, the Center for Investigative Reporting or the Investigative Reporting Workshop who is funding them, and they readily supply a list of funders, amounts and dates. We applaud their willingness to disclose the sources of their support.

But not all of the new media makers are happy to share the sources of their funding. More than once we were told: “We’re not at liberty to disclose our funders,” said Tom Regan, who has been collecting data for J-Lab. Some receive support from anonymous donors; others want to guard their donors’ identities for competitive or other reasons.

J-Lab has spent a great deal of time and shoe leather tracking news reports, online databases, and confirming grants with the nonprofit news initiatives themselves.

But sometimes it’s like peeling an onion. Consider San Francisco’s Tides Foundation, a highly valued incubator for non-profit wannabes. It acts as a fiscal agent channeling grants to projects that are not able to take grants directly. The Tides Foundation lists all these grants on its 990s because Tides is legally the one making the grant, but the money is really coming from other funders. And Tides’ policy is not to divulge where that money comes from.

J-Lab urges new media makers who want to be regarded as credible news outlets to seize the moment to set high benchmarks for transparency. Add a page on your Web site and list the sources, amounts and dates of your funding.  Foundations can play a critical role here as well: Consider not donating to news ventures unless they make public their funding sources.

To be sure, advocacy and political points of view are more commonplace in the new media landscape. So just tell it like it is.

For the new media makers, letting the public know who supported your efforts to cover the news is not just an exercise in fair play. It’s a key component in making sure that your news coverage is not seen as front for a hidden group of donors who might have a particular political or advocacy agenda.


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