Filling the Gap in Media Funding

Society has entered a new digital age. The emerging information economy is speeding the disruption of our industrial-age institutions. Critical social fundamentals such as flows of information and money, behavior of citizens and consumers, forms of business and leadership, even the way we define community, are changing.

To the extent that the social sector and civil society are nimble enough to think digital, they will remain relevant. If they try to hold on to the status quo, their influence will fade. Perhaps the most important element of thinking digital is understanding that the digital age has made every organization a media organization, and the disruption of traditional news and information flows is not just an issue for the media or technology industries—it’s everyone’s issue.

Everyone includes foundations, which are increasing their media-related grantmaking, according to a study released this month by the Foundation Center, “Growth in Foundation Support for Media in the United States.” As a funder, I’ve hoped to see this news for more than a decade. Yet many in civil society still don’t understand what’s happening to our news and information flows.

On one level, we get it. Is the field of social change better because the Stanford Social Innovation Review exists? Of course it is. By covering solutions, by helping leaders collaborate, the review has an impact on how well we do our jobs. That requires news, information, and analysis.

Consider the same thing on a community level. Some 18,000 newsroom jobs have vanished in the past decade from the institution that has for a century provided the lion’s share of local news, the American daily newspaper. For a moment forget about the newspaper, and even the journalist. Think about the stories, the countless articles—the news that was the glue holding communities together, the investigations that sent crooked politicians to jail. The new media world has not yet replaced those stories.

This is news and information we need to improve our environment, our schools, our economic futures. Whose responsibility is it to see they exist?

In 2011, the Federal Communications Commission released the biggest national look at media policy in a generation. “Information Needs of Communities,” based on the Knight Commission of the same name, declared a crisis in local accountability journalism. Part of the remedy, lead author Steve Waldman wrote, was for philanthropists to increase their support for journalism.

A first step toward foundations taking on more media responsibility has come with the release of “Growth in Foundation Support,” the most comprehensive study yet done on foundation media grantmaking.

The good news is that private and community foundations are reacting to the digital-age disruption of traditional media. During the study period, 2009-2011, as recession pounded the national economy, traditional foundations invested more money than ever in media projects. Dollars for media grants grew more than three times faster than overall grantmaking and grew to make up a larger percentage of all foundation giving. If media grants were considered a foundation giving category (they aren’t; that’s why we needed a study) media grants would rank seventh, behind the environment and animals but ahead of religion, science, and technology.

Two-thirds of the foundations surveyed made media grants. To one degree or another, they appear to accept the premise that communities need healthy, independent flows of news and information for people to be able to improve their lot. They see that topics they care about—from health to education to transportation and back again—can’t advance if people don’t know anything about challenges and solutions.

Surveys the Knight Foundation has done at its annual Media Learning Seminar for community foundations show that foundation leaders are aware of the local news void. Some are building communications into all their grants. Others are making more or larger media grants. Still others are building their own communications capacity. In the digital age, when people can tell their own stories, it seems unwise to leave our information flows to shrinking traditional news systems.

“Growth in Foundation Support” isn’t a perfect study. It includes only private and community foundations, and not the individuals who are stepping up to launch new news organizations such as ProPublica and The Texas Tribune. That said, giving by traditional foundations indicates how much social institutions generally care about particular issues. If traditional foundations are doing more in media, it’s a fair bet that more nimble philanthropists are as well.

Despite the recession, the study reports that 1,012 foundations invested $1.86 billion in media funding over 3 years. But not all foundations have fully embraced the idea that information flows are the clay from which civilization builds itself, brick by brick. Only 10 foundations made the grants that amounted to 42 percent of the total. In addition, there’s that nagging reminder: A third of the foundations surveyed reported no media-related grants.

Though we now know that media grantmaking is growing, we have yet to address Steve Waldman’s second step. Media grantmaking is one thing; caring about local accountability journalism is something else entirely.

It’s a more important something, if you believe that our democratic republic depends upon the checks and balances independent information provides citizens and consumers who need to weed out the scoundrels from good government, honest business, and fact-based advocacy.
The study shows the “journalism” subcategory of media grantmaking is the largest, totaling roughly 28 percent over 3 years. More than $527 million sounds like a big investment, but the cost of losing traditional journalism from the system is more than 10 times that. When it comes to spreading media innovation, foundations that care about “journalistic” uses of technology are outgunned by even bigger ratios. Foundations put in roughly $109 million over 3 years in the “applications and tools” category, but venture capital investments in Silicon Valley and San Francisco alone invested more than 250 times as much. Venture philanthropists who focus on the democratic functions of media and the social good technology can do should take note.

Foundations must develop a sense of urgency on this issue. Eventually, the marketplace may replace what we are losing. Or it may not. Even if it does, “eventually” is a rather uncertain time frame. Communities with polluted environments, ineffective schools, and leaders who steal from the public coffers may not make it to “eventually.” They may be set back so far they can never recover.
It comes back to Waldman’s original point to the Federal Communications Commission: “Philanthropists—individuals or foundations—should consider changing their approach to media. Without strong reporting, the issues that philanthropists care about—whether health, environment, children, fiscal responsibility—are all shortchanged. The public will be less well informed and institutions professing to solve the problems will be less accountable.”

Read more stories by Eric Newton.