Nonprofit group now owns Philly's newspapers

philly inquirer newspaper

Philadelphia's two main newspapers are now owned by a nonprofit foundation.

This could be a new way forward for beleaguered local papers in other cities -- or it could be just a one-off. Either way, there is considerable interest in journalism circles about the Philly deal.

H.F. "Gerry" Lenfest, the philanthropist who owns The Philadelphia Inquirer, the smaller Philly Daily News, and the associated web site Philly.com, announced Tuesday that he has donated all three enterprises to an arm of the Philadelphia Foundation.

The papers will still sell ads and subscriptions. They'll still try to turn a profit. But in this new structure, donations will augment traditional sources of revenue. Lenfest has kicked things off with a $20 million endowment.

"It's important to keep journalism strong in this community," Lenfest told the Inquirer in an interview.

Only one other prominent paper in the United States, the Tampa Bay Times, is owned by a nonprofit. But there are an increasing number of nonprofit digital news outlets like ProPublica. And some media industry analysts have predicted that the nonprofit route will be explored by other cash-strapped papers.

Related: fired L.A. Times editor urges local ownership

The Philly deal is complicated. Lenfest's papers have technically been converted into a public benefit corporation, which means they seek to make profits, but the operators "can consider additional goals, with a main offered 'benefit' being the value to society of an active news organization in the Philadelphia region," the Inquirer explained.

The papers, as a public benefit corporation, have been donated to the Institute for Journalism in New Media, a newly formed part of the Philadelphia Foundation that can accept tax-deductible donations.

"The institute's tax-exempt status ... can help promote charitable giving to the institute," according to the Inquirer. "That, in turn, can support public-interest reporting at The Inquirer, the Daily News, and Philly.com."

There are safeguards that seek to preserve newsroom independence. For example, proposed donations can be turned down.

But the idea is to encourage individuals, foundations, and corporations to donate funds for new projects and reporting efforts.

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