Principles of government grant-making to support local journalism

Advantages of grant programs:

• Can target support toward the neediest news organizations or news deserts
• Can target support toward the most important topics

Disadvantages:

• It is easier for government officials to exert political influence (threatening to deny support)
• It can force news organizations into ongoing lobbying to get benefits from lawmakers
• It can favor those with more sophisticated capacities for grant applications or lobbying
• If transparency is not strong, the public may be more likely to view recipients of grants as influenced by the government officials, and thereby undermine public trust.
• More likely to be “discretionary” programs (limited annual appropriation) rather than an “entitlement.”

With that in mind, the Rebuild Local News Coalition recommends that states that are considering grant programs include the following features of administration and governance:

Bipartisan Governing Body – To avoid both the appearance and reality of partisan grantmaking, governing bodies should include representation from both political parties. Merely allowing the appointment of people from both parties may not be sufficient as a Democrat can find a like-minded Republican to join and vice versa. As a result, we prefer grant-making bodies that require some nominations be made by the minority party.

Example: AmeriCorps:   It is governed by a 15-person board, nominated by the President and confirmed by the U.S. Senate, for five year terms. “No more than 50 percent of the appointed Members of the Board, plus 1 additional appointed Member, are from a single political party.”

Political Firewall – Simply put, no government official should have the ability to fire the members of a body.   This usually means that the body is not set up as a division of a government department but rather as an independent or quasi-independent body.

Example: Corporation for Public Broadcasting : It is a nonprofit corporation, funded by the federal government and governed by a nine-person board. The members of the board are nominated by the President but confirmed by the U.S. Senate, each serving six year terms. “No more than 5 members of the Board appointed by the President may be members of the same political party.”

Example: New Jersey’s Civic Info Consortium was created when the state sold some of its broadcast spectrum and allocated a portion of the funds to form the grant-making body. The body is housed at Montclair University, is an independent 501c3 and is governed by a 15-person board.

Content Neutral – Government grant criteria should prioritize creating or retaining local journalism jobs, teaching skills, incentivizing better ownership structures and providing general operational support for programs rather than supporting specific stories and editorial projects. When government or quasi-government structures make decisions on specific stories or editorial projects, it is not “content-neutral” and leaves more possibility for political favoritism.

Example: The Corporation for Public Broadcasting’s Community Service Grants are given to stations based on relatively objective criteria such as whether they are properly licensed, have audited financial statements, meet transparency requirements.

Dedicated funding stream – It is advisable to avoid a system in which news organizations must appeal to lawmakers on a regular basis for support.  Lawmakers often use this as a moment of leverage against news organizations, and news organizations may feel tempted to self-censor during sensitive moments.  The best way to avoid this is having a dedicated funding source, such as a fee whose funds always go to support the journalism fund. Examples:

Example:   Consumer Financial Protection Bureau. “Rather than being funded through regular appropriations, the CFPB funds its operations through monetary transfers from the Fed. The Fed must transfer amounts requested by the CFPB director based on the director’s determination of need, subject only to a cap based on a statutory formula.”

Example: the BBC is funded by a fee on TV sets.

Transparency – Reveal who gets money and the reasons for decisions. Otherwise, the public will assume the worst.

Example: A bill in California that would create a grantmaking body mandates that newsrooms publish a public notice when they have applied for the grant and when they have received the grant. The governing board must also hear public comment on each of the grants being considered and there are rules forbidding board members with connection to applicants from weighing in with other members of the grant making body.

Advance Appropriations – While the dedicated funding stream is the best system, if funds must come through a regular funding process, then they should be “forward funded.” That means that the funds approved, say, in 2022 are for the 2024 program (and that the funds the program is using now were appropriated back in 2020). That makes it less likely that politicians can react to some specific piece of journalism by cutting off funding. Example:

Example: The Corporation for Public Broadcasting receives funds two years in advance.

Given the risks to editorial independence of government-spending-gone-wrong, the ideal set up would include all of these elements. If that’s not possible, we strongly recommend at least doing the first three items, and as many of the rest as possible.