Should newspapers embrace a nonprofit business model?

A New York Times op-ed piece this week caught my eye because of its use of that overused quote from Thomas Jefferson: “The basis of our governments being the opinion of the people, the very first object should be to keep that right. And were it left to me to decide whether we should have a government without newspapers or newspapers without a government, I should not hesitate to prefer the latter.”

Of course, Jefferson wrote that in 1787 — before the opposition press spent a couple of decades spewing some of the worst defamations ever to besmirch a public figure. By 1819 he was saying, “Advertisements contain the only truths to be relied on in a newspaper.”

The writers — Yale’s chief financial investment officer David Swensen and financial analyst Michael Schmidt — suggested we are perilously close to having government without newspapers. They cite the now familiar woes of major newspapers, declining advertising revenue, declining circulation, declining profits, bankruptcy, smaller papers.

They suggest that newspapers could survey by being turned into nonprofits supported by endowments, like some universities.

“As educational and literary organizations devoted to the ‘promotion of social welfare,’ endowed newspapers would benefit from Section 501(c)(3) of the I.R.S. code, which provides exemption from taxes on income and allows tax deductions for people who make contributions to eligible organizations,” the writers says.

“One constraint on an endowed institution is the prohibition in the same law against trying to ‘influence legislation’ or ‘participate in any campaign activity for or against political candidates.’ While endowed newspapers would need to refrain from endorsing candidates for public office, they would still be free to participate forcefully in the debate over issues of public importance. The loss of endorsements seems minor in the context of the opinion-heavy Web.”

While a lot of people on opposite ends of the political spectrum might cheer such a restriction, it seems a bit confining. You would wind up with a press that owes its soul a handful of wealthy dilettantes with political axes to grind. Sort of like the Sun.

There have been several business models for newspapers over the years. I hope someone finds a better one soon.