NEW HAVEN, Conn. — As sharp revenue losses cast doubt on the future of U.S. newspapers, one idea gaining attention is the conversion of newspapers into tax-exempt nonprofits supported by large endowments.
David Swensen, who managed one of the world’s largest endowments as chief investment officer at Yale University, said in a recent opinion piece in The New York Times that endowments “would enhance newspapers’ autonomy while shielding them from the economic forces that are now tearing them down.”
But first, the idea must overcome skepticism from the very newspapers that stand to benefit. Critics say endowments also could beholden newspapers to their large donors and that giving newspapers tax-exempt status could restrict them from endorsing candidates and running editorials on pending legislation.
Skeptics also question whether the many millions of dollars needed to create such endowments could be raised during the worst recession in decades.
