What Reporters Want To Know

Nonprofits account for a fast-growing slice of American life, but to a large extent they operate under the radar of the news media, unless there is a major tragedy such as Hurricane Katrina or a sexy scandal.

Beyond routine stories about charity golf tournaments and an occasional expose about an overpaid executive, news organizations tend to ignore this “third sector” of the U.S. economy, preferring to concentrate their energies on government and business.

The John S. and James L. Knight Foundation is out to change that by funding the Fourth Estate and the Third Sector, a fellowship program for journalists who want a deeper understanding of the nonprofit sector. The June 15-20 program at the University of Mississippi was the fourth such workshop the foundation has sponsored since 2002.

More than 140 journalists from more than 130 different news organizations have attended the workshops. Another 50 attended a one-day session on issues that would grab headlines last December at the National Association of Broadcasters in Washington, D.C.

This year’s class of 21 journalists studied the nuts and bolts of nonprofits at the all-expense-paid workshop at the University of Mississippi. The Knight fellows (participating reporters and editors) received advice from lawyers, accountants, investigative journalists and nonprofit insiders on how to deepen and widen their coverage of the 1.5 million tax-exempt entities that engage in health care, education, the arts, social services, dis aster relief and a host of other activities.

Largely out of sight of journalists, the nonprofit world has become a behemoth. How well organizations are doing their jobs is a matter of opinion, and the journalists heard a wide variety of views from inside and outside the nonprofit sector.

Nonprofits are “the mother’s milk of democracy” but fall far short of fulfilling their promise, said Hodding Carter III , who retired this past summer as president and chief executive officer of the Knight Foundation. A crusading Mississippi newspaper editor during the tumultuous years of the civil rights movement, Carter went on to become a spokesman for the U.S. Department of State and a producer of television documentaries.

His tenure at the helm of a foundation has left him cynical about the people who wield power in the tax-exempt sector, Carter said. He said many of them are too timid about funding groups that engage in advocacy of social causes.

“It’s true that most of them aren’t thieves, but they have no social conscience,” he said.

Richard Scruggs, a Mississippi lawyer who has won billions of dollars in class-action lawsuits against the tobacco industry, has now turned his sights on health care. He has suits pending against numerous nonprofit hospitals, charging them with price-gouging poor, uninsured patients and driving them into bankruptcy with aggressive collection tactics.

“Their business model is indistinguishable from the for-profit hospitals,” Scruggs said. “They have complete immunity from federal, state and local taxation, and they have a duty to give back…. They have morphed slowly away from their original charitable mission.”

Meanwhile, “the regulatory agencies are asleep at the switch,” he said, adding that no nonprofit hospital has ever had its tax-exempt status revoked.

The nonprofit sector is “a safety valve for discontent in a winner-take-all system,” according to Emmett D. Carson, president and CEO of The Minneapolis Foundation and chair of the Council on Foundations. “It has helped keep our democracy intact and helped us avoid social upheaval,” Carson said. “The losers and the disaffected don’t feel like they have to go blow up something.”

Carson urged the journalists to master the nuances and complexities of the nonprofit world so as to avoid reinforcing stereotypes about it. One such stereotype, he said, is the belief that “philanthropy is about rich white people.”

Underlining that point was Janice Gow Pettey, a professor of philanthropic studies at the University of San Francisco and former chief executive of the Sacramento Regional Foundation. Pettey cited recent research finding that African-Americans give the largest percentage of their disposable income to charity of all major U.S. ethnic/racial groups.

The typical donor is a woman older than 55 with a median income of $35,000, said Diana Estremera, a co-founder of May Development Services, a direct response fundraising firm in Greenwich , Conn.

In a candid look at nonprofit marketing, Estremera told the journalists that photos of animals and children are sure-fire ingredients of a successful direct mail campaign.

“We like little puppies and kids — the sunny side of life,” she said.

Bill Sizemore, who attened the reporting workshop this past June, is a reporter on a four-person investigative team at The Virginian-Pilot in Norfolk , Va. His email is [email protected]