The Salt Lake Tribune announced in November that it had received Internal Revenue Service approval to become the nation’s first legacy newspaper to go fully nonprofit. The Medill Local News Initiative interviewed the Tribune’s Editor, Jennifer Napier-Pearce, about what this transformation will mean. Here is an edited transcript.
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Mark Jacob Can you explain how nonprofit status is going to work?
Mark Jacob -
Jennifer Napier-Pearce There are two parts. The Tribune itself is becoming a nonprofit. And we’re also creating this new foundation, the Utah Journalism Foundation. It’s a stand-alone organization. Its mission is to sustain independent journalism throughout the state of Utah. The Tribune will be the primary beneficiary of that, but we also intend the foundation to fund scholarships for emerging journalists, to look for other news outlets in the state that are producing independent projects and help fund those. That’s sort of a longer-term goal, but the immediate goal is to set up a large foundation that will help us finance the Tribune and, again, other independent news projects. It will have its own board of directors. It has a unique mission to raise a lot of money supporting local news. The Tribune will also have a board of directors. And right now we’re just in the middle of making the transition. The newspaper itself is part of a joint operating agreement with the Deseret News. We’ve been in a business relationship since the ‘50s. That contract ends at the end of this year, so we’re negotiating to see how that shakes out. While we’re getting the nonprofit groundwork established, Paul Huntsman is still the sole owner and publisher [of the Tribune]. When we make that transition, he will no longer be the owner. He will be the chairman of the board.
Jennifer Napier-Pearce -
Mark Jacob Will people be able to make contributions directly to the Tribune or will they need to do that through the Utah Journalism Foundation?
Mark Jacob -
Jennifer Napier-Pearce You can make a contribution to either organization. The reason we did both is, the Tribune has been in the community for a long, long time, we’ve been here since 1871, so we have lots and lots of friends, but not everyone wants to support the Tribune in that way. They may prefer to support independent local news more generally. We’re trying to keep the doors open to any and all possibilities.
Jennifer Napier-Pearce -
Mark Jacob You’ll still be selling subscriptions. Will those be tax-deductible?
Mark Jacob -
Jennifer Napier-Pearce The way the IRS approved us, there are no restrictions on how we gain revenue. Our legal counsel has instructed us that if you receive something tangible that has to be taxed. So if you buy a ticket to the opera, it’s sort of the same thing. You’re getting a good and service as opposed to if you’re making a donation. So donations will be collected separately, and subscriptions will be a taxable purchase for the consumer.
Jennifer Napier-Pearce -
Mark Jacob Your tax status now will ban “political activity.” So no more political endorsements, right?
Mark Jacob -
Jennifer Napier-Pearce Right, as the institution. It does not prevent us from providing educational information from columnists or contributors or whatever. We can still have a vibrant opinion page. But as the institution of the Tribune, we cannot make political candidate endorsements. That is forbidden.
Jennifer Napier-Pearce
We can still have a vibrant opinion page. But as the institution of the Tribune, we cannot make political candidate endorsements. That is forbidden.
Jennifer Napier-Pearce, Editor, Salt Lake Tribune
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Mark Jacob Do you feel like you’ll be able to have political opinions? Will you be able to endorse legislation?
Mark Jacob -
Jennifer Napier-Pearce We can talk about issues. We had a long conversation about this with ProPublica [which is nonprofit] because they feature ideas and concepts and issues. When you start to talk about “This is the candidate who can do this,” that’s when you get in trouble. Right now we live in ski country and there’s a lot of congestion in our canyons. We feel very emboldened to continue to continue to voice opinions on “Should we build a tram? Should we build a train? Should we limit travel up the canyons to shuttle buses or whatever?” That’s the kind of issue that we feel like we need to weigh in on. But we’re not telling people how to vote, and I think that’s the distinction.
Jennifer Napier-Pearce -
Mark Jacob The reason you’re going nonprofit is for financial sustainability. The Tribune laid off a third of its newsroom in 2018. Are you aiming to get back to that pre-layoff level or are you trying to keep what you have now? What is your goal?
Mark Jacob -
Jennifer Napier-Pearce Well, it’s fluid. My goal, of course, would be to build the newsroom to where we were. In the near term, I’m not sure that’s feasible. For our long-term sustainability and health, we have to build up this endowment. So there’s a short-term piece and there’s a long-term piece. The short-term piece is to expand our reader revenue, to expand our audiences – Utah is a growing state with a booming economy. And we just need to make sure that people understand the unique role that we play in this ecosystem. But the long-term plan is to build up the endowment to throw off enough money to sustain local news, not just the Tribune but elsewhere. So many of these local newspapers throughout the state are struggling, and communities suffer from that.
Jennifer Napier-Pearce -
Mark Jacob Have other news outlets reached out for advice on how to go about this?
Mark Jacob -
Jennifer Napier-Pearce We’ve had a few requests. We’re the first newspaper to get approved, and so when the news came out, people were sort of scrambling. We had a few lawyers approach us who had made similar attempts at the IRS and were not successful in previous years. And so they wanted to see what our application looks like. (Ed. note: The Salt Lake Tribune gave us a copy of their application for readers to see.) I think people are sort of scouring our IRS application so they can see if they can adapt it to their own needs. We applied with that in mind. We really wanted it to be as open-ended as possible so people can use it as it fits their needs.
Jennifer Napier-Pearce -
Mark Jacob One recent trend in nonprofit journalism is donors sponsoring newsroom beats. The Seattle Times, for example, does this. Are you open to that – to someone saying, “I want to pay for you to have an education reporter,” for example?
Mark Jacob -
Jennifer Napier-Pearce Yes. We’ve been approached. Utah is a small state, and so before we go down that road in gusto, I just want to make sure the ethical lines are really strong, and the expectations are clear that, OK, you want to support us, that’s great. But you won’t have any editorial control. This is an arms-length kind of donation. Give us some money, trust us enough to do the work. But it’s not PR. It’s not advertising. It’s journalism. We’ve been working with the Poynter Institute on our ethics guidelines. I’m not opposed to [donor-sponsored beat reporters]. I’m cautious about it. I think we have to be pretty selective. I don’t want anything to erode the trust that we’ve built up for decades with our public. I want readers and the newsroom to know there’s not going to be interference from the donor.
Jennifer Napier-Pearce -
Mark Jacob You mentioned you’ll have a new board soon. What else will look different or change? To the consumer, will anything look different?
Mark Jacob -
Jennifer Napier-Pearce I think the outreach piece – people are not used to that from the Salt Lake Tribune. They’ve come to us expecting a product and we’ve delivered. I think now we have begun to be more pro-active in our communications with our subscribers as well as other supporters. We just wrapped up a month-long, year-end campaign, the first that we ever did. It was great. We got a lot of good feedback, a lot of “what are you doing?” kind of feedback. So it was as educational as it was for fundraising purposes. The community will notice that shift a little bit. We’ve had a presence in the event space. I think we’ll be ramping that up much more this year to let people know we are the place to come for conversations of hard topics as well as some entertainment event kind of stuff. We have a heavy lift on the fundraising side. We need to raise $60 million in three years. For a market our size, that’s a lot of money. I think we’re off to a really good start, but this year will really be a lot of making the case for large donors.
Jennifer Napier-Pearce -
Mark Jacob When you’re fundraising, you don’t want to tick off too many people. But newspapers often tick off people. On the other hand, hard-hitting news and investigative journalism remind people why they need newspapers.
Mark Jacob -
Jennifer Napier-Pearce That’s right. We’ve had a lot of those initial conversations before we even went down this road, just to make sure that people understood the role that local news plays in our economy, our society, in lawmaking, in fixing problems. I think that when you sit down with somebody for 10-15 minutes to talk about the role of journalists, they're like “Oh, yeah,” they totally get it. It’s hard in the current media environment, though. National politics seems to have polarized so many people. To the extent possible, I try to separate local news from that. But yeah, we stir up trouble, we point out flaws. That’s the business. And that’s why it’s important. I think people just need a tutorial, a reminder that the free press is an essential part of the way we govern ourselves.
Jennifer Napier-Pearce
I think people just need a tutorial, a reminder that the free press is an essential part of the way we govern ourselves.
Jennifer Napier-Pearce, Editor, Salt Lake Tribune
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Mark Jacob Do you have a sense whether this could be applicable in large parts of the country? Ten years from now, will we see a lot more nonprofit news outlets?
Mark Jacob -
Jennifer Napier-Pearce Well, there are a lot already. Public broadcasting has been around for a long time. I think it’s just new in the newspaper space. That’s what makes it unique. Over the last decade, we’ve seen hundreds of local nonprofit online-only newsrooms crop up. I don’t think it’s that foreign of a concept anymore. But in terms of saving local newspapers, this is definitely an option that I think a lot of local newspapers are going to explore because the economics of print are just real tough right now. [Nonprofit status is] not going to fit for everybody. We’ve sort of had a perfect storm of elements. We have an owner/publisher who’s willing to give up the asset that he bought to give to the community. I mean, that’s not for everybody. We have a very healthy economic base and a lot of community-minded philanthropic support even though we’re small. So we have elements that other areas may not have.
Jennifer Napier-Pearce -
Mark Jacob Is there a level of IRS oversight where they’ll come back and review you?
Mark Jacob -
Jennifer Napier-Pearce No. Their letter of approval was no-strings-attached. If there’s something amiss in our 990s [IRS disclosure forms], I guess we’ll see at that point with the first filings. No, there’s no restriction. So long as we’re paying the taxes on our unrelated business income, I don’t think there’s going to be any problem at all.
Jennifer Napier-Pearce -
Mark Jacob Anything I didn’t ask about that people need to know?
Mark Jacob -
Jennifer Napier-Pearce No. Just that we’re so optimistic that this is going to work. [We’re all] a little terrified, but really excited about the possibilities.
Jennifer Napier-Pearce