Social Enterprise Update: A New Model of Philanthropy and a Newspaper’s Creative Use of a Public Benefit Corporation

The Christian Science Monitor recently published an article titled “Should Saving the World Be Profitable?” It highlights the different approach that many of today’s philanthropists – Mark Zuckerberg, Bill Gates, Warren Buffett, for example – take to doing good as compared to past major philanthropists. The following quote in the article highlights this difference:

“Older practitioners of philanthropy were far more responsive to the needs and desires of the public, supporting projects that were controlled largely by local communities or even government,” writes Garry Jenkins, a professor at The Ohio State University Moritz College of Law who focuses on philanthropy and corporate governance, in an e-mail. “Today’s philanthrocapitalists are much more controlling, more directive, more confident that they have all the answers to the social problems.”

And just a month earlier The Washington Post reported that the owner of a major newspaper operation was transferring its ownership to a nonprofit. That operation included the Philadelphia Inquirer, which the article identifies as the third-oldest newspaper in the United States and the winner of 20 Pulitzer Prizes, and its related website. What made the transfer particularly interesting is that it used a public benefit corporation, which actually owns the newspaper operations (and remains a taxable entity) but now is owned by the tax-exempt nonprofit Institute for Journalism in New Media, which in turn is operated under the auspices of the Philadelphia Foundation. Additional coverage: NY Times.

Lloyd Mayer