In the fast-paced, constantly changing media landscape, a declaration has reverberated: “Nonprofit media isn’t a business model; it’s a tax status.” It’s a statement I’ve made multiple times in public forums, and to this day, it stands as a stark reminder that, in the world of journalism and media, there are no guarantees of success.
The mirage of the nonprofit shield
For many, the label "nonprofit" conjures images of a benevolent sanctuary immune from the traditional pressures and risks of the corporate world. However, beneath this facade, many nonprofit media entities grapple with the same sustainability concerns that for-profit ventures face. The reality is that while nonprofit media may be free from certain financial obligations, they are not exempt from the overarching need for viable revenue streams.
The perils of philanthropy
A significant challenge arises when nonprofit media outlets become heavily reliant on large philanthropic donations. These sizable injections of funds can often lead to an artificial revenue bubble. Initially, the cash influx can facilitate rapid expansion and innovation. However, there’s an inherent danger: this growth may outpace sustainable revenue streams. Like a startup given too much venture capital without a clear monetization strategy, the organization can find itself oversized and underfunded when the external funds dry up.
Sustainability vs. solvency: the great disconnect
The term "sustainability" has been thrown around in media circles to the point of saturation. Yet, there seems to be a disconnect between our understanding of the term and its practical application. Many nonprofit media organizations operate at the knife’s edge of solvency. There’s a precarious balance, where, on one side, journalism strives for impact, depth and outreach, while on the other, there’s the looming threat of financial instability.
This balancing act is even more challenging when certain models, like that of nonprofit, potentially restrict journalism entities from exploring diverse monetization avenues. In its purest form, journalism aims to inform, enlighten and educate. However, if it's continuously hamstrung by financial constraints, can it genuinely achieve its mission?
A plea for true potential
It’s time we reframe our perspective. Instead of viewing nonprofit media as a uniquely shielded entity, let’s acknowledge the shared challenges across the media industry. By doing so, we can begin to explore hybrid models, partnerships and innovative solutions that allow journalism to thrive financially and in its societal mission.
While the tax advantages of nonprofit status are evident, it shouldn’t blind us to the fundamental truth: media, whether for-profit or not, must evolve to remain sustainable. We owe it to the public, journalists and the future of informed democracies to ensure that we aren’t just surviving on borrowed time and borrowed dimes.
Andrew Ramsammy is the co-founder and managing partner of Equimedia Advisors. He was formerly the chief impact officer at the Local Media Association, where he led Word in Black, a groundbreaking collaboration of the nation’s leading Black publishers, and co-led the Knight x LMA BloomLab, a $3.2M sustainability initiative for Black publishers. Ramsammy is on the advisory committee of ProJourn, an innovative approach to providing journalists no-cost legal help with pre-publication review and public records access, and is a member of the Board Trustees of Vermont College of Fine Arts. He was 2022 Columbia Journalism School Sulzberger Fellow. He can be reached at firstname.lastname@example.org.
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