The U.K. government should grant charitable status to public-interest news media

Solutions

A year ago, the UK government asked economist Frances Cairncross to conduct an independent review of the challenges high-quality journalism is facing in the country.

Last Tuesday, the Cairncross Review was published, highlighting nine recommendations that the government and regulators ought to follow to help secure the sustainability of journalism in the future.

The recommendations range from investigating the workings of online advertising (aka the Google-Facebook duopoly) to developing a media literacy strategy.

However, the recommendation that attracted my attention the most, given my particular interest in the charitable sector, was number nine.

It reads: “New forms of tax relief: The government should introduce new tax reliefs aimed at (i) improving how the online news market works and (ii) ensuring an adequate supply of public-interest journalism.”

Cairncross is hinting at two tax changes here. The first one is the extension of zero-rating VAT to digital subscriptions and micropayments for online news (currently, the exemption is enjoyed just by print newspapers and periodicals) and the second is granting charitable status to particular types of high-quality, public-interest journalism.

Last June, Cairncross issued a ‘call for evidence’ to gather material for the report and the review reveals that granting charitable status to select news outlets was one of the most frequently raised proposals.

As known, charities benefit from several tax breaks in the United Kingdom so it would be much easier for a news organization with charitable status to attract philanthropic donations that could provide a much-needed additional revenue stream.

However, this is easier said than done. As the report notes, UK’s current charity law is probably incompatible with the role of news organizations since it forbids charities “to undertake certain political activities such as securing or opposing a change in law, policy or decisions affecting the country”.

A solution could then be to add public-interest journalism to the list of charitable causes the 2011 Charities Act set out to advance. But, again, this might take time and be deemed legally too complicated. That’s why the Cairncross report also highlights a “second-best option”: building a journalistic equivalent of the Creative Sector Tax Relief that grants support to creative industries ranging from video-games to film production.

Legal feasibility aside, the indication expressed by Craincross is part of a larger trend that is taking hold in the news industry: non-profit journalism.

Facing shrinking revenue opportunities, several news media startups across the world decide to opt for business models that rely solely on donations, from private individuals or larger foundations.

One of the most notable examples is certainly ProPublica, a Pulitzer-Prize winning newsroom established in New York in 2007 to produce investigative journalism in the public interest.

But media organizations that adopt mixed business models are also considering the idea of attracting philanthropic money to fund in-depth reporting with increasing interest.

I’m thinking of Vox’s vertical Future Perfect or The Telegraph’s Global Health Security initiative, founded respectively by the Rockefeller and the Bill and Melinda Gates’ foundations.

Just to give a number, Oxford University’s Reuters Institute for The Study of Journalism found that 12 percent of European publishers saw philanthropy as an “important” income stream in 2019.

Obviously, “philanthrojournalism” is not immune to criticism. How can we make sure that the money comes with no strings attached? And even if we can guarantee that the media outlet retains total editorial control - as in the examples I mentioned above - how could we envision a system where the funding doesn’t necessarily reflect the funder’s interest areas?

These are complex challenges that require bold and imaginative solutions.

Maybe we should think beyond large foundations. In a recent article for The Guardian, journalist Owen Jones contemplates a sort of democratized public subsidy for the whole media industry. His idea, firstly proposed by US media scholar Robert McChesney, consists of the state giving every citizen a yearly allowance of $200 to donate to one or more publications. In Jones’s hypothesis, the allowance would be funded by an annual tax on the advertising industry.

The idea lends itself to an array of criticism. There’s the evident risk, for example, that the funding will just mirror the electorate’s political preferences of the moment resulting in a pro-government press with more money than its competitors.

Regardless, the idea has the merit of being radical and out-of-the-box and that’s the kind of thinking we need in this ongoing brainstorming on the future of journalism.

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