Steve Coll, reacting to
Not to pick on any one institution, but, from a constitutional perspective, how did we end up in a society where Williams College has (or had, before September) an endowment well in excess of one billion dollars, while the Washington Post, a fountainhead of Watergate and so much other skeptical and investigative reporting critical to the republic’s health, is in jeopardy? I’m sure that Williams-generated nostalgia in the emotional lives of wealthy people is hard to underestimate, but still …
I don’t think that raising substantial endowments for genuinely important newspapers like the New York Times or the Washington Post would be particularly hard. The more difficult bit is how do we get there from here, given the fact that they’re for-profit companies right now, with fiduciary responsibilities to their shareholders.
My idea is to dilute the current shareholders to the point of irrelevance by essentially raising the funds for the endowment through the sale of new shares. There are probably other ways to achieve this too. The downside, of course, is that the family owners of the newspapers in question would see their own net worth — or at least the part of it tied up in the paper — also brought down to zero.
The government could encourage newspapers’ move towards nonprofit status by tweaking the nonprofit laws a little. Here’s Swensen and Schmidt:
One constraint on an endowed institution is the prohibition in the same law against trying to “influence legislation” or “participate in any campaign activity for or against political candidates.” While endowed newspapers would need to refrain from endorsing candidates for public office, they would still be free to participate forcefully in the debate over issues of public importance. The loss of endorsements seems minor in the context of the opinion-heavy Web.
Newspapers must be able to influence legislation — that’s one of the central reasons for their existence. And the last thing we need is politicians who are angry with a given paper threatening to investigate its nonprofit status.