When local philanthropist Paul Huntsman took over The Salt Lake Tribune in 2016, progressive community members were rooting for a revival of this counterpoint to its conservative competitor, the Deseret News.
Just two years later, the future looked bleak as Huntsman laid off one-third of the newsroom staff, under pressure from declining ad revenues. In 2019, he announced a plan to convert the newspaper into a nonprofit, charting a path that has caught the attention of other distressed news organizations.
Although getting relief from the demand to make a profit hasn’t resolved all its issues, the 150-year-old newspaper is in better shape today. In an editorial published last November, the Tribune proudly declared itself “sustainable” in its current form as a tax-exempt, donor-supported, 501(c)(3) nonprofit dedicated to public-service journalism. As Executive Editor Lauren Gustus wrote in the editorial, the Tribune has “no plans to return to a previously precarious position.”
In some ways, the Tribune is thriving. Its newsroom has grown 23 percent in the past year, becoming more diverse, adding a three-member Innovations Lab reporting team dedicated to “solutions-oriented” journalism and expanding its coverage of economically disadvantaged communities. As Utah experienced a severe drought and heat wave last summer, the Tribune focused on new ways Utahns were saving water and, in the process, renewed its focus on serving the community.
Challenges remain. Both the Tribune and Deseret News announced in 2020 that they would cut their print edition to one day a week. The Tribune added Wednesdays back into its print schedule at the start of this year, aiming to retain readers who miss the physical paper. To keep its nonprofit status, the newspaper is forbidden from endorsing political candidates, a practice it had discontinued in 2019.
But in a local news landscape where newspapers face monumental losses and are folding by the dozens, the stabilizing effect nonprofit status has had on the Tribune is drawing attention from newspaper owners.
On Tuesday, the board of directors of nonprofit Chicago Public Media, parent of public radio station WBEZ, voted to move forward with a previously announced plan to acquire the Chicago Sun-Times. The organizations expect to close the transaction by Jan. 31, with the currently for-profit Sun-Times becoming nonprofit. Chicago Public Media said the merger would create “one of the largest local nonprofit news organizations in the nation” and would emerge “as a national model for the future of local journalism.”
A key to the business model is attracting donors. In the weeks after the Salt Lake Tribune was granted nonprofit status in 2019, the Tribune received $302,415 in donations, according to that year’s 990 tax form. In its first full year as a nonprofit, the 2020 990 shows, the Tribune received tenfold that amount in donations, at $3,565,766.
Donations represented 61 percent of the newspaper’s total revenue in 2020. Digital advertising made up 11 percent of revenue, subscriptions 9 percent and print advertising 7 percent. The remainder of its revenue came from investments, renting out office space and miscellaneous sources.
Despite the high level of contributions the newspaper received, it ended 2020 over $800,000 in the hole. A donor covered the loss.
“It was not a growth year,” Gustus said. “Our intention in 2021 was to get to sustainability — to get to stability — and we did. In 2022, we’re focused on filling in the gaps, and I say that principally with an eye toward editorial.”
What’s Needed to Make It Work
To make a transition akin to the Tribune’s, several variables need to fall into place, according to Fraser Nelson, a strategic adviser to nonprofits and media organizations whom Huntsman tapped as vice president of business innovation.
First, the owner must be willing to give the newspaper away, without any profit, to the community. “People call me up, and they’re like, ‘I want my newspaper to be a nonprofit.’ I’m like, OK, you have to give it away. They’re like, ‘What? I’m not gonna give it away.’ I’m like, well then hang up the phone,” Nelson said.
Second, there needs to be wealth present in the community for a philanthropic model to work. Otherwise, the publication won’t have a donor base, Nelson said.
That requirement concerns her because some of the communities most at risk of losing their local news source are poor and rural. Those communities, she said, will need a different source of financial support, whether that comes from outside donors or, someday, the government.
“Are we saying in this country that only communities that have a lot of money deserve to understand their environments?” Nelson said. “We don’t want to have it be yet another wealth divide in this country.”
Huntsman and his team met with organizations that had gone down similar roads. They spoke to John Thornton, one of the founders of the nonprofit digital news site The Texas Tribune, as well as Jim Friedlich, the CEO of the nonprofit Lenfest Institute for Journalism, which owns The Philadelphia Inquirer. The Inquirer and the Tampa Bay Times are examples of metro news outlets that are owned by nonprofits but remain for-profit. But what the Salt Lake Tribune wanted to do, to convert the newspaper itself into a nonprofit, hadn’t been done before.
Nelson theorized that other newspapers had not attempted to obtain nonprofit status because they were afraid that as long as they brought in advertising revenue and charged for subscriptions, the IRS would reject their application. And while abandoning candidate endorsements was a given, some were also concerned that they would have to sacrifice coverage of arts and sports.
To apply for tax-exempt status, the Tribune sought the help of attorneys from Washington-based law firm Caplin & Drysdale, including Meghan Biss, who previously spent over a decade working for the IRS. In November 2019, Huntsman announced that the IRS had granted the Tribune’s request.
I've started a lot of nonprofits, probably half a dozen or so in my life. And usually they write you back, and they're like, well, what about this? What about that? We just got the letter saying, you're good to go. I mean, nobody could believe it.
Fraser Nelson, former VP of business innovation, Salt Lake Tribune
“I’ve started a lot of nonprofits, probably half a dozen or so in my life,” Nelson said. “And usually they write you back, and they’re like, well, what about this? What about that? We just got the letter saying, you’re good to go. I mean, nobody could believe it.”
Immediately after, Nelson said, dozens of newspaper owners reached out to her for advice on whether the move would be feasible and how it would be done. They continue to reach out to her in her new role as a managing director at the National Trust for Local News.
The Tribune was the first legacy metro newspaper to become a nonprofit, carving a path not only for the Chicago Sun-Times to do so but also for smaller community papers to make similar changes.
“That door has been opened in a way that it had not been before,” said Rick Edmonds, a media business analyst at The Poynter Institute for Media Studies. “So, I think over time the contributions are pretty significant that the (approval) will make to the industry.”
Before Huntsman stepped in, there were no guarantees The Salt Lake Tribune would make it to 2022. In 2013, then-owner, Digital First Media sold the newspaper’s share of a printing plant and renegotiated the terms of a joint operating agreement with the Deseret News. The result was the latter receiving 70% of profits from their shared advertising and circulation businesses. Previously, profit was split 58% for the Tribune and 42% for the News.
In May 2019, Huntsman explained his thinking about nonprofit status in a “Dear Readers” editorial. “Roughly 1,800 communities across the U.S. have already lost their local newspapers, tearing a hole in their civic and democratic fabric,” Huntsman wrote. “We are taking proactive, innovative and swift action to pioneer a new model so that this does not happen in Utah.”
Huntsman did not respond to requests for comment.
Tribune’s Unique Perspective
Although other outlets in Utah provide statewide coverage, like the Deseret News and local TV stations, the Tribune offers a perspective that isn’t duplicated, said Joan O’Brien, who led the group Citizens for Two Voices that protested the cutbacks Digital First Media imposed.
The Deseret News is owned by The Church of Jesus Christ of Latter-day Saints, of which nearly two-thirds of Utahns are members. Traditionally, The Salt Lake Tribune has acted as a counter to that voice — a publication non-members and members who lean progressive flock to for their news.
Transitioning to a nonprofit “seemed like almost an obvious path forward because, you know, newspapers are not the cash cows they used to be, but they are still recognized as integral to communities” O’Brien said.
The newspaper’s nonprofit status is a draw for journalists. Gustus, the executive editor, came to the Tribune from McClatchy, where she served as West Region editor. She had previously worked at the Tribune as assistant sports editor and was drawn back to the newspaper because she couldn’t pass up the chance to lead a nonprofit newsroom, she said.
“There’s no other opportunity like this one in the country,” Gustus said. “You know, The New York Times, The Washington Post, the L.A. Times, you name it. Nobody is doing what the Tribune is doing and I wanted to be a part of proving that it can work.”
Gustus said the editorial staff has a renewed focus on serving the community, recognizing that as a nonprofit its purpose is to benefit the public. “So, what are we doing to invest in the strengthening of that community? And what that might mean if we built it out in real world terms?” Gustus said.
During the drought, for example, one story from its new Innovations Lab focused on a sustainable agriculture startup that grows cattle feed vertically in a factory-like indoor farm and can produce five hundred acres of feed on a third of an acre, using 5 percent of the water. Another told of a 23-acre greenhouse that produces a million pounds of tomatoes a year and eliminates water waste.
The Tribune, through Report for America, also added a reporter to cover the west side of the Salt Lake Valley, which includes some of the area’s most economically disadvantaged communities, and another to cover southern Utah.
The Tribune’s nonprofit business model is still in its early days, noted Poynter’s Edmonds. Although nonprofit media organizations don’t have shareholders to please, they still must pay the bills. Nonprofit status, he said, “is not a panacea.”
Emily Anderson is a master’s student in the Medill School of Journalism, Media, Integrated Marketing Communications at Northwestern University. She reported this story as a project in the school’s “Researching the State of Local News” course. This is the first in a series of stories produced by students in that class.