Nonprofit News and New Streams of Revenue

Something I’ve been following for a while is the shift of news reporting from for- to nonprofit. I’ve even blogged here about it, most recently last October when WBEZ acquired the Chicago Sun-Times.

The deal closed in January, making the Sun-Times the newest entrant in Chicago’s nonprofit news constellation. And just last week, the Sun-Times made another announcement: given the critical nature of local journalism, it was dropping its paywall and making all of its online content entirely free.

Since the advent of the internet, newspapers have gone between paywalled and non-paywalled content. Could advertising alone fund journalism?

Whatever the answer (though the answer seems to be a pretty strong no at this point), it’s not super-relevant to the Sun-Times and other tax-exempt newspapers. The Supreme Court has held that advertising that is not “substantially related” to a tax-exempt’s educational purpose is unrelated business taxable income.  And glancing through the Sun-Times website, I see very few ads (and the ones I see don’t have any educational connection to the newspaper’s exempt purpose).

So without (substantial) advertising and without a paywall, how is the Sun-Times going to make money? It’s hoping donors will step up and support its reporting. And I’m excited to watch and see if that works out.

Samuel D. Brunson 

Photo by Bank Phrom on Unsplash