IRS Asked to Speed Media Nonprofit Designations by Changing 501(c)(3) Application Policy
"Instead of focusing on meaningless operational distinctions, the IRS should evaluate whether the media organization is engaged primarily in educational activities that provide a community benefit,” the report said. It said that’s “as opposed to advancing private interests.” The agency should also review whether an applicant is “organized and managed as a nonprofit, tax-exempt organization,” said the study. It was backed (http://bit.ly/105QwWp) by the heads of 11 journalism schools and programs, including at Columbia and Syracuse universities and the universities of California at Berkeley, Maryland, Missouri and North Carolina at Chapel Hill. The IRS had no comment.
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Waldman’s report on media’s future “raised concerns that antiquated” IRS policies “might hinder innovation, and suggested that experts in this area take a closer look,” Genachowski wrote U.S. Treasury Secretary Jacob Lew of the 2011 report (WID June 10/11 p8) that spurred this study. Taking no position on tax-enforcement changes the new study seeks, Genachowski believes “the rise of nonprofit news organizations is a crucially important trend,” he wrote. “This blue-ribbon, bipartisan group has taken a careful, thoughtful approach to removing obstacles to civic innovation” that ought to be considered by the Treasury and IRS, Genachowski continued (http://bit.ly/Vw6RRL). He said the report on media’s future “documented the collapse in local journalism."
"Especially challenged” types of reporting are investigative stories requiring “lengthy” document and record searches and creating new software applications “that make government more accessible to the public,” the new report said. The last few years saw a “steep decline in accountability journalism, especially in local and regional journalism” that alarmed the journalism deans, they wrote (http://bit.ly/105QwWp). “Local online journalism has not yet developed a profitable business model, but it is almost miraculously good at giving journalists the ability to publish at low cost and at giving the public access to far more information” than ever previously available, the deans said. “The journalism the new online accountability news organizations do -- which is not undertaken to make money in the marketplace, and likely never will -- is obviously different from the more commercial forms of journalism, and deserves to be granted nonprofit status."
The Newspaper Association of America supports what the report seeks, said Paul Boyle, senior vice president-public policy. Changing rules “to support local accountability journalism is probably a good thing,” he told us. “There are a lot of different nonprofits that are trying to emerge, and working with for-profits” on journalism, he said of this time of technological “transformation.” The National Newspaper Association, though aware of the study, has no stance on it, CEO Tonda Rush told us.