Jack's Journal - June 2021

Can the Nonprofit Sector Save Journalism From Itself? – Part 2

Jack Horak
Director of Nonprofit Education & Consulting
TANGO

My May 2021 TANGO Trend’s Column was entitled Can the Nonprofit Sector Save Journalism From Itself.

I used the column to introduce TANGO TRENDS readers to some new members of the nonprofit sector: the “nonprofit newspapers” emerging in locations around the country in places where for-profit newspapers have failed.

But more importantly I used the column to advance my proposition that the newspapers, by virtue of their status as non-profit corporations that qualify as “charitable” under state and federal tax law, are subject to “higher order” ethical obligations than would otherwise be the case in the world of for-profit Journalism. My May column refers you to an editorial piece on the topic that appeared recently in the Nonprofit Ct. Mirror where I fleshed out this thought in greater detail.

The reason I am dedicating this much time to the topic has to do with the fact (as nearly I can tell) that the individuals making this happen – the journalists, editors, publishers etc. — are not fully aware of what the federal tax law and state law of charities require of them.  They see “tax-exempt”  status primarily as an administrative hurdle to obtaining the working capital they need to operate (in the form of tax-deductible contributions) without considering the enhanced ethical obligations the law requires of them.

To this end, my argument is that the mindset at the newspapers should not be:

“How far we can push the envelope and do what we want while keeping the IRS or State Attorneys General at bay?”  

The mindset should be:

“How can we stay true to our legal obligation to educate readers about both sides of the stories or issues we cover so that they can make up their own minds.”  

The “mindset” should start with the boards of directors of the newspapers because they have a fiduciary duty to keep the newspapers within the margins of what the law requires – and the same mindset should be chiseled into the culture and daily operations of these organizations.

But how do these principles apply in daily practice at a newspaper?  Well, it will require a little bit more work — but not as much as one would think – because the obligation to educate readers about both sides of an issue so they can make up their own minds does not require an equal number of words to both sides — but does require the disclosure of the existence of the other side and perhaps a reference (a link) to a place where readers can learn about the other side.

Here’s an example.

A nonprofit newspaper publishes a reprint of a recent major story prepared by Pro-Publica which takes a “hard left” position on  issues of taxation, wealth, and fairness.  There is a substantial response to this publication in trustworthy publications such as the Wall Street Journal.  The nonprofit could fulfil its requirements as to this story with a standardized sentence or two at the end of the story which would say something like the following:

Readers interested in learning more about the issue and can find contrary opinion at these sources:  [Insert a reference to where readers can access other sources of opinion]  The tax-exempt mission of  this newspaper is to educate and inform its readers in keeping with its status under Section 501(c)(3) of the Internal Revenue Code.

In my July 2021 column I will carry this matter forward with the publication of a formal Code of Ethics designed specifically for these tax-exempt publications.  In the meantime, please pass along any comments or suggestions to me at .

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Jack Horak
Director of Nonprofit Education & Consulting

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