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With local news, David has advantage over Goliath, indie online publishers are told

June 9, 2015
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Mark Chapman
A slide from Jim Brady's presentation to LION members and guests.
A slide from Jim Brady’s presentation to LION members and guests.

Editor’s note: This story reflects part of the function NoN attended over the weekend and was posted by CT News Junkie.

PHILADELPHIA, Pa. – The founders of two celebrated Philadelphia journalism startups urged independent local news publishers Saturday to embrace the advantages in focus and flexibility they have over big legacy media competitors.

Speaking at LION Publishers’ “Independents’ Meeting” at Temple University’s downtown campus, Billy Penn founder Jim Brady celebrated the “awesomeness of being small,” and Technical.ly Philly co-founder Brian James Kirk talked about piecing together effective but low-overhead software programs that can provide the infrastructure for a journalism startup.

For those who suggest we use unpaid interns: Expert says don’t go there

After more than 20 years working for big media organizations, Brady said he appreciates the ability to be selective about what his site covers, to be part of and help build a local news ecosystem through curation, and to pursue a revenue strategy that puts user experience first.

See the complete story at Lion Publishers.

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Comments

4 responses to “With local news, David has advantage over Goliath, indie online publishers are told”

  1. Mark Chapman

    In the linked story that starts with information about the perils of unpaid interns, there is a statement that the IRS does not classify journalism as a 501c3 charity and thus must be classified as educational. This is incorrect.

    We applied for, and received, our 501c3 public charity designation in November 2014. The charity designation refers to where the majority of the site’s income comes from — public donations. Donations accounted for nearly 90 percent of Chapman Hyperlocal Media’s gross income in 2014.

  2. Dylan Smith

    Hi Mark,

    The IRS will only approve 501c3 applications for nonprofits that are “charitable, religious, educational, scientific, literary, testing for public safety, fostering amateur sports competition, or preventing cruelty to children or animals.” Journalism is not a specified activity, and that was the factor behind the IRS placing a hold on nearly all applications by nonprofit journalism organizations for several years. It was only in the last couple years that the feds began to loosen up and again regularly approve journalism orgs that had applied as “educational” organizations. But there is no path to apply as a “journalism” organization. This issue was widely covered in the industry press:

    http://www.poynter.org/news/mediawire/164759/irs-delays-make-it-hard-for-nonprofit-news-sites-to-build-their-businesses/

    http://www.huffingtonpost.com/dan-kennedy/beyond-the-tea-party-how_b_3286604.html

    http://www.knightfoundation.org/blogs/knightblog/2013/3/4/making-it-easier-digital-news-startups-get-nonprofit-status/

    http://www.niemanlab.org/2013/03/report-the-irss-antiquated-and-counterproductive-rules-are-hurting-nonprofit-news-orgs/

    http://www.niemanlab.org/2012/09/a-reason-for-optimism-in-the-irs-handling-of-nonprofit-news-orgs/

    http://www.niemanlab.org/2012/03/passing-the-nonprofit-test-a-guide-for-nonprofit-news-outlets-on-how-to-get-501c3-status/

    The “public support” test is a separate factor in obtaining and maintaining a charitable designation.

    If you check your Form 1023 application and 501c3 letter from the IRS, you’ll see “educational.”

    cheers,

    Dylan

    1. Mark Chapman

      @Dylan

      You are correct about that, and educational is the reason for the 501c3. But the test is you are either a public charity (which we are) or a public foundation (which we are not). We spent some months on the application, got legal advice and the IRS said yes. I think we are talking about the same thing here, just coming from a different angle.

  3. Dylan Smith

    Indeed, getting classified as a foundation means you need to give out grants, rather than being able to concentrate on serving your charitable mission. That requires having a broad base of public support. But getting classified as a 501c3 requires that you meet the IRS requirements, which don’t specifically include committing journalism. Thus, the “educational” classification for those journalism organizations that have been given the nod by the tax man.

    cheers,

    d.

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