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Why non-profit news might not be such a great idea

Journalism funded by foundations could deliver a dystopian info-hellscape of pink slime and dark money

Media Canadian Business

“The Fin de Siècle Newspaper Proprietor” by Frederick Burr Opper, Keppler & Schwarzmann, 1894. Image courtesy the Library of Congress/Wikimedia Commons.

Having been down a couple of rabbit holes recently and emerging from the last one covered in pink slime, I am now having sober second thoughts about the non-profit alternative I touted in this space recently as the only path to a sustainable news media. Sure, for-profit corporate ownership has pretty much wrecked our news media, along with federal bungling, but believe it or not a system of non-profit news media such as has emerged in the US over the past decade could lead to a dystopian info-hellscape of pink slime and dark money. News media in the US have been on the same plane crash trajectory as ours, but without all the government meddling. Washington decided against bailing out local news a few years ago in its pandemic stimulus Build Back Better Act, and it has also so far declined to try and force Google and Meta to subsidize news media, although a couple of states have floated such laws, to fierce opposition from free press advocates.

Instead of trying to keep old media alive with government subsidies and profits redistributed from Big Tech, the US has encouraged the growth of non-profit news outlets under Section 501(c)(3) of its tax code, which allows media outlets there to accept charitable donations. The Institute for Nonprofit News (INN) now has more than 425 member publications, up from 189 in 2019, including a half dozen in Canada. Our news media were given the option to become charitable organizations in 2019, but so far only about a dozen have done so because it’s expensive and time consuming to keep detailed financial records, file annual reports and form a board of trustees. It may also have something to do with the fact that there is much less charitable giving here than in the US due to our higher taxes and lesser prosperity, and it fell in 2023 to an historic low.

In the US, however, vast fortunes have been made recently, and wealthy Americans are increasingly donating to charitable foundations in order to avoid taxes and decide for themselves where to spend the money instead. A so-called “non-profit industrial complex” has grown up around this lavish funding, which In These Times magazine warned amounts to “corporate influence-peddling,” with elite foundations keeping non-profits in line with “the exchange of funding for soft control.” Much of the funding for US foundations is ideological in nature and its sources are often obscured in a web that Jane Mayer described in her 2016 book Dark Money.

Instead of funding non-profit news media startups directly, foundations are increasingly giving millions to journalism intermediaries such as the INN. This prompted 17 small online news outlets to form their own bare-bones Alliance of Nonprofit News Outlets in 2023 to appeal for direct support, and within months its ranks had swollen to 32. Foundation funding for local news in the US hit the big time late last year when the Press Forward coalition of 22 philanthropic groups announced that it hoped to inject at least US$500 million into revitalizing non-profit, public and for-profit news. Six months later, it had 52 funders and 17 local chapters.

Unfortunately, much of the foundation funding for local news in the US has gone to so-called “pink slime” publications named after the meat by-product sometimes found in fast food hamburgers. Into the news vacuum caused by the closure of local newspapers have stepped not only online journalists with non-profit startups, but also suspicious pink slime operations funded by dark money, and it’s often hard to tell the difference. The Pew Research Center reported in 2010 that “the ranks of self-interested information providers are now growing rapidly,” including a “range of non-journalistic players entering the information and news field.” Some of these efforts were transparent about their financing and intentions, it noted, while others “present themselves as purely journalistic and independent when in fact they are funded by political activists.” Its report the following year found that 44 percent of US non-profit news websites covering state and local news were openly partisan.

A 2019 study counted at least 450 questionable local and business news websites, at least 189 of which had been set up across ten states within the previous year to distribute a flood of algorithmically generated articles and a smaller number of reported stories. Out of more than 15,000 stories produced during a two-week period, the study found, only about 100 had the bylines of human reporters, with the rest citing automated services or press releases. “Interspersed between stories about real estate prices and the best place to purchase premium gas based on zip code, newsier pieces appear, sometimes to quote a state senator about how the federal government should not play a role in education.” A follow-up study the next year showed that the number of these “shadowy, politically backed ‘local news websites’ designed to promote partisan talking points and collect user data” had almost tripled to more than 1,200.

The New York Times counted almost 1,300 pink slime websites as the 2020 US presidential election loomed, most of which “generally do not post information that is outright false,” but whose “operation is rooted in deception, eschewing hallmarks of news reporting like fairness and transparency.” The largest network of pink slime publications had received at least US$1.7 million from Republican political campaigns, it found, and assigned stories to freelancers who were often paid $3 to $36 apiece. “The assignments typically come with precise instructions on whom to interview and what to write, according to the internal correspondence. In some cases, those instructions are written by the network’s clients, who are sometimes the subjects of the articles.” By 2022, the website rating service NewsGuard identified 1,202 pink slime sites masquerading as local news and warned that they would soon outnumber daily newspapers in the US, which had fallen by then to only 1,230.

The explosion of faux news was not limited to Republicans, noted Salon in 2020, as Democratic Party operatives had set up the Courier Newsroom to publish “what appear to be local news sites but are actually propaganda efforts aimed at creating content to be shared on social media.” According to Politico, the Courier had also spent more than US$1.4 million on Facebook ads in the 2020 election cycle, “mostly to promote its flattering articles and videos about more than a dozen endangered House Democrats.” The Courier was still up and running as campaigning for the 2024 election began, noted the UK magazine Spectator, operating “more like a Democratic propaganda outfit than a real news endeavor.”

Believe it or not, political pink slime operations are only part of the problem with non-profit news in the US, which we could be inviting into Canada. I dive next into corporate-backed publications set up not only to exert political influence but also to “greenwash” fossil fuel industries.

Marc Edge is a journalism researcher and author who lives in Ladysmith, BC. His books and articles can be found online at www.marcedge.com.

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