Nonprofit news: as news organizations continue to cut back, investigative and enterprise journalism funded by foundations and the like is coming to the fore.

Since 1993, the Henry J. Kaiser Family Foundation has funded journalism training on health issues, including funneling up to $50,000 to a handful of fellows each year to support reporting projects. But, dismayed by cuts in newsroom staffing, newsholes and air-time--and the sketchy reporting that can result--foundation officials began kicking around other ways to ensure solid coverage of topics they consider crucial.

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One possibility: a nonprofit health news service of their own. Matt James, senior vice president for the California-based foundation, remembers running the idea past longtime editor Bill Kovach, founding director of the Committee of Concerned Journalists and an adviser to Kaiser's media fellows program. James chuckles, a little uncomfortably, recalling the start of Kovach's generally encouraging response during a meeting last May. "He basically said, 'Five years ago ... I would have told you to go to hell and shown you the door.'"

These days, foundations and philanthropists are finding a warmer reception.

Beleaguered journalists who once clung solely to the business model of paid advertising and circulation now recognize the urgency of developing new revenue sources for labor-intensive newsgathering. For some, foundations hold increasing promise as allies in meeting the public's information needs--beyond superficial headlines and celebrity sexploits--so long as there are safeguards for editorial independence.

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"The fact of the matter is philanthropic institutions have provided millions of dollars over the years to help journalists do their work. Journalists have an unfortunate habit of not acknowledging that," says Charles Lewis, head of the nonprofit Fund for Independence in Journalism. From 1989 through 2004, he served as founding executive director of the Center for Public Integrity, which "raised and spent $30 million [on journalism projects] in the years I was there."

New forms of nonprofit, grant-funded news operations are proliferating. The lineup includes the Pulitzer Center on Crisis Reporting (see "Funding for Foreign Forays," page 32), Brandeis University's Schuster Institute for Investigative Journalism, MinnPost.com (see Drop Cap, page 14) and at least two state-level health news sites (see "Healthy Initiatives," page 31). The Washington Independent, freshly minted in January, joined the Center for Independent Media's network of four related sites in Colorado, Iowa, Michigan and Minnesota. And there are many more in the mix.

The highest-profile newcomer is ProPublica (propublica.org), an investigative news operation that opened shop in Manhattan in January (see "Big Bucks for Investigative Reporting," page 29). California philanthropists Herbert M. and Marion O. Sandler dreamed up the project--which they're bankrolling at $10 million annually for at least three years--and hired former Wall Street Journal Managing Editor Paul E. Steiger as editor in chief. He and Managing Editor Stephen Engelberg, a former investigative editor at the New York Times, eventually will oversee a staff of about 25 reporters, editors and researchers charged with producing public interest stories of "moral force," as the Web site proclaims. These will be offered free to select news outlets, whose own staffs may join in the newsgathering, as well as being showcased on ProPublica's site.

The Sandlers, who made $2.4 billion when they sold the Golden West Financial Corp. savings and loan in 2006, have given millions to Democratic Party causes over the years, according to news accounts. That--and donors' often heightened emotional investment in money they've earned--prompted Slate media critic Jack Shafer to question Herbert Sandler's role as Propublica chairman (slate.com/id/2175942/). Even though the couple pledged not to interfere with editorial content, Shafer recommended that Sandler guarantee at least 10 years' funding and then resign his position, "so he'll never be tempted to bollix up what might turn out to be a good thing."

Some prominent media leaders and innovators have called for even more philanthropic support to ensure journalism's vital watchdog role.

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Geneva Overholser, writing in "On Behalf of Journalism: A Manifesto for Change" (annenbergpublicpolicycenter.org/Overholser/20061011_JournStudy.pdf), urged a greater role for nonprofits in assisting news media. Her 2006 treatise advanced journalist Lewis' suggestion that foundations and philanthropists create a "Marshall Plan" to create more public-minded forms of news coverage. Grantmakers could "increase support for nonprofit media organizations" and "foster new nonprofit media models," wrote Overholser, a Missouri School of Journalism professor. She also recommended steps for corporations, journalists, government and the public.

Jan Schaffer, executive director of the interactive journalism incubator J-Lab, introduced a "Citizen Media" report (kcnn.org/research/citmedia_introduction/) last February by writing that community foundations should "be alert to real possibilities for building community capacity" by supporting citizen media. "Journalism alone will not suffice," she elaborated in a phone interview. "I think foundations and philanthropies will play a role in supplementing that information landscape."

Dan Gillmor, in a September 17 op-ed published in the San Francisco Chronicle (sfgate.com/cgi-bin/article.cgi?file=/c/a/2007/09/17/ED1OS4OIU.DTL) and timed for a Council on Foundations' conference there, urged community foundations to "put the survival of quality local journalism squarely on their own agendas." Gillmor--who in January launched the Knight Center for Digital Media Entrepreneurship at Arizona State University's Walter Cronkite School of Journalism--suggested measures such as paying the salary of a local investigative journalist or providing seed funding for a network of local blogs and media sites, adding journalism training for participants.

And Alberto Ibarguen, president and CEO of the John S. and James L. Knight Foundation, publicly addressed those San Francisco conferees with a like-minded appeal, warning: "If the citizens are unaware, then the democracy is in peril." Knight and the council will cohost a seminar February 20 and 21 on communities' information needs in a democracy. Up to 200 community-foundation representatives will meet in Coral Gables, Florida, to consider media trends, the digital revolution, gaps in coverage and how these might be filled.

Foundations see their growing involvement as compensating for newsrooms' diminished coverage of civic issues. They're stepping in because "the traditional news business is not investing as much as it needs to ... in getting reporters out to cover stories," Kaiser's James pointedly notes. "We as nonprofits have a duty to figure out: Is there a role for us, in increased training, in direct partnerships with news organizations or even [in] creating a new news service to fill that void?

"What we're talking about is supporting real journalism, not advocacy," adds James, whose foundation already partners with National Public Radio, USA Today, the Washington Post and other news media on public opinion research projects. "We're big believers in the role of journalism in democracy. We believe it's important for nonprofits to find ways to support it."

With newspaper revenue tanking as classified and retail advertisers migrate to the Web and Wall Street tightens its grip, journalists are casting about for financial lifelines. Foundations have the wherewithal to throw some: By law, they must spend a minimum 5 percent of their net assets each year on charitable causes. In 2005, U.S. foundations granted $158 million for media and communications, the Foundation Center reports, though it doesn't break down whether the payouts went for journalism per se or marketing or research dissemination. Nor does that figure necessarily reflect spending on journalism-related education.

Journalism's funders include those affiliated with legacy news media--such as Annenberg, Scripps, Tribune, Reynolds, Gannett--plus longtime supporters like Carnegie, Ford and the Pew Charitable Trusts. (AJR has received support from the Freedom Forum, Ford, Knight, Pew and Carnegie.)

Knight, the leading journalism funder overall, announced more than $21 million in journalism grants in 2006 and more than $50 million in 2007, though some of these are multiyear grants and won't be paid out all at once. "There are years when we are not the largest [journalism] grantmaker," Eric Newton, its vice president for journalism initiatives, said in an e-mail interview. Since the foundation's start in 1950, it has invested nearly $300 million in U.S. and global journalism--emphasizing mid-career training in the 1980s, journalism education in the 1990s and digital media innovation in the current decade.

Knight has contributed to journalism philanthropy in another fundamental way. Shortly after joining the foundation in 2001, Newton--former managing editor of the Newseum and, before that, the Oakland Tribune--helped pull together an informal group of program officers from legacy media foundations and others interested in journalism. Participants included the Bill & Melinda Gates Foundation, which in November announced a three-year, $1.7 million grant to the International Center for Journalists to support Knight health fellowships in sub-Saharan Africa.

"We think all foundations should care about the information needs of communities in a democracy," Newton says.