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Media Overlook Foundations

Two editors of The Portland (Ore.) Business Journal resigned recently to protest the publisher's decision to kill a feature on the expansion of the local Planned Parenthood chapter.

It's possible that the publisher did so because she disapproved of family planning or was acting at the insistence of outsiders who are fans of unplanned pregnancy. But I'm more interested in what she said publicly: that she spiked the story because coverage of nonprofit organizations is of no interest to business readers, and indeed, isn't news at all.

In her own hapless way, she was right. Nonprofits aren't news. And that constitutes one of the more-inexplicable silences in U.S. news coverage: The near total neglect of the vast and immensely powerful industry of nonprofit organizations -- foundations ranging in size from staggering to tiny, family-based tax dodges, charities of global reach, centers of public-interest scholarship, ideological think tanks that turn out books and papers like intellectual assembly plants.

(The Portland paper's outgoing top editor, I should note, was Dan Cook, a superb journalist who as a Daily Business Review reporter in the early '90s was largely responsible for exposing the Port of Miami's stunning and long-concealed financial frailty. Dan's a friend and former colleague of mine.)

The full range of social and political influence wielded by the country's nonprofits, though impossible to gauge, is unquestionably huge. Among them are 62,000 charitable foundations, a sector that exploded during the 1990s, when 42 percent of foundations with $1 million or more in assets were born, according to the Foundation Center.

The media may ignore foundations, but foundations have never ignored the media. Foundations have long recognized the value of the media as instruments of social strategy. During the early struggles over shaping U.S. broadcasting in the 1920s, foundations fought unsuccessfully to secure frequency allocations for educational radio.

Support for media has soared. A 2001 study by the Poynter Institute -- the nonprofit journalism school that owns The St. Petersburg Times -- reported $400 million in foundation grants for media in 1999. The Kaiser Family Foundation, Pew Charitable Trusts, Markle Foundation and George Soros' Open Society Institute dole out hundreds of millions a year in funding that includes mid-career fellowships, awards and stipends for journalism and opinion-writing that furthers foundation goals.

That funding includes something that few newsrooms would tolerate from advertisers: Mini-grants pegged to specific stories. As Poynter study author Rick Edmonds noted, a newspaper that would never take money for an Eastern Europe reporting project from General Motors would happily accept Ford Foundation funding for the same project.

Foundations are also the paymasters behind many of the public intellectuals whose writing populates the opinion pages of U.S. newspapers. When the drama of the neoconservative revival is written, a starring role will go to the enormous outlays for rightist thinkers under the wing of such organizations as the Heritage Foundation and the Cato Institute, nourished by funders such as the Scaife and Bradley foundations.

So the question is, why is this enormous industry, of progressives and conservatives alike, not worth the same scrutiny that the media are supposed to apply to institutions that wield power and influence? Why is coverage confined to public fundraising efforts, poignant projects underwritten locally or the odd instance of egregious self-indulgence?

We see nothing about how foundations decide and what they decide, about what gets funded and what doesn't, about who runs them and what their goals are -- nothing that might illuminate how this vast assemblage of unprecedented wealth is applied and withheld.

The stakes are big. The consulting firm McKinsey & Co., working with former Sen. Bill Bradley, released a report last spring that concluded that foundations and endowed institutions could increase their payouts by $100 billion a year -- enough for a $40,000 scholarship for every college student in the country -- if they modernized their business practices. Raising their payouts from the federally mandated 5 percent to 7 percent of assets alone would yield $30 billion more.

By covering an influential charity for his business readers, ex-editor Cook may have been out of line with the usual media indifference to nonprofits, but we can only hope that's because he's ahead of the pack.

Edward Wasserman is Knight professor of journalism ethics at Washington and Lee University. His chair was created by an endowment from the John S. and James L. Knight Foundation.

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