The impact of nonprofit news: a look at new research

This summer, scholars Nikki Usher and Sanghoon Kim-Leffingwell’s paper, “How Loud Does the Watchdog Bark?” was published in the International Journal of Press/Politics. This research is an indicator that nonprofit, local news organizations are beneficial to democracy — and that funding for the field is imperative.

At the American Journalism Project, we believe that nonprofit news is an important solution to the local news crisis — a crisis brought on by a failure of the commercial market. As the first venture philanthropy dedicated to supporting local news, our work focuses on building sustainable, thriving local news organizations that reflect the communities they serve. Nonprofit news is a sustainable business model that allows journalists to focus on producing accountability journalism, public-service coverage, watchdog reporting and coverage that builds trust and connection. 

Usher shares more about the paper in their Substack newsletter, which includes a link to an ungated version of the research. In their methodology, Usher and Kim-Leffingwell measured the correlation between the presence of any local news source and instances of prosecutions for public corruption (also called PPCs), and found a consistent correlation between the two. Later, the researchers examined how the presence of nonprofit news, a rising field, impacted PPCs. 

It’s important to note that the two researchers were looking for an increase in PPCs to indicate efficacy in local journalism; in their Substack post, Usher notes that a rise in PPCs signals a healthy democracy where journalist watchdogs serve as a check against the powerful: “Evidence of the check is the only evidence we have of the system working.”

Here are two takeaways from their research that resonated strongly with us at AJP: 

1. 1. Nonprofit news organizations can shape local democracy. The paper asserts that democracy is upheld when public officials are held accountable — and affirms that nonprofit news does just that. As Usher says “Overall, we find strong support that nonprofit watchdog journalism can serve an important, supplemental role in shoring up government accountability that can help mitigate the impact of the declines of local newspapers.”
      
      From the paper: “Nonprofit journalism has become an important strategy for supporting journalism that keeps powerful government and business interests accountable. News nonprofits are designated as tax-exempt organizations by the Internal Revenue Service and must be ‘organized exclusively and operated primarily’ for a 501(c)(3) purpose, which must be educational, charitable, or for the promotion of social welfare, or a combination of these functions. By statute, nonprofit news outlets must serve the public interest. Investigative journalism, which goes above and beyond a monitorial role to engage in sustained inquiry into possible wrongdoing, is both costly to produce and poorly supported by the market.”

      2. Funding for nonprofit news matters. After examining the increase in PPCs brought on by the presence of nonprofit news operations, Usher and Kim-Leffingwell found a strong correlation between funding for the new orgs.

      From Usher’s post: “We also find that philanthropic funding for journalism matters: a well-funded nonprofit watchdog outlet is associated with greater prosecutions for public corruption. Commercial logics undermine the incentive for for-profit news media to continue to invest in watchdog journalism; the support for our questions about the link between nonprofit news provision and funding point to the efficacy and the importance of finding revenue streams to support journalism that is poorly supported by the market outside of commercial logics.”

This research provides further evidence that nonprofit, local news is a key solution to a complex issue, and that philanthropy has a meaningful role to play as we transition local news to a public good available for all.