Nonprofits should be as open as possible around their sources of funding for several reasons: Research shows that when people know where support for a newsroom comes from, they have a greater sense of ease around their relationship with the news source. With technology companies providing so many platforms that push out news from a mix of reliable and shady sources, people really have to pay careful attention to know where their information is coming from. Nonprofit news organizations help restore trust in fact-based media by building a relationship and creating engagement with readers, listeners and viewers who feel they know the newsroom team producing the reporting they are consuming.
The financial reports of nonprofit news organizations are public records. Most people are not going to go through the trouble to find your 990 tax returns, but you can make it easy for them by posting your financial records, and any audits if you are audited. Publishing the information demonstrates your sense of responsibility to your audience and supporters. Being open about funding helps differentiate nonprofits from for-profits and positions them as a community asset. Nonprofits don’t pay taxes because they are a public trust, so they should be transparent to reinforce that idea.
Some nonprofit newsrooms have been unsure what to do when offered a truly anonymous donation. They feel that can’t be influenced by a donor when they don’t know who the donor is. But the lack of transparency has risks: It is difficult if not impossible for the public to know and trust that you don’t know or at least have a good idea who the donor is. And you could find out too late that the money came from a problematic source. Another challenge to maintaining transparency involves donor-advised funds. When a newsroom lists such a fund as a donor, it may have a name but obscure who is behind the fund.
INN recommends that its members publicly declare any gift above $5,000 per individual, and for the most part they do so. INN advises startups to avoid taking any significant amount of anonymous funding, to establish trust. Over time, exceptions may arise where a small foundation demands anonymity and a nonprofit agrees, but only after careful consideration. Established news nonprofits have worked out processes for deciding when and how they are going to decide to take such funding.
Having a written ethics policy at the time a startup launches is not difficult and will save trouble and heartache. Put it on your website and on your grant acknowledgments. It is important to make clear to funders and to the public that donations are never tied to involvement in the editorial product. Many honorable people who are upstanding citizens and not out to corrupt you may simply have never thought about editorial independence. They may be business people who are used to getting something in return for their money. Having a clear ethics policy and discussing it when you first go out and start asking for money will strengthen your relationships and prevent misunderstandings. To be diplomatic and not accusatory, the discussion should be framed around the value of news and what readers gain from your editorial independence.
Sample ethics policies are on our website, and on our members’ sites. The policies vary as members adopt wording from each other, from the Society of Professional Journalists and from nonprofits outside the news industry.