By Bill Britt
Alabama Political Reporter
MONTGOMERY— While the public attention is focusing on the Internal Revenue Service’s scandalous scrutiny of applications for tax exempt status made by Tea Party groups, legitimate questions can be raised about how non-profits actually use their tax-free funding.
Newspaper profits are plummeting and newsrooms are emptier these days, but non-profit think tank journalism is trending upward.
For decades, publications like “National Geographic,” “Consumer Reports,” PBS, NPR and the far-left “Mother Jones News” have taken advantage of charitable contributions and tax-exempt status to produce consumer content. They have worked comfortably alongside the commercially funded, mainstream news organizations that depend on advertising and subscriptions to keep the presses running.
Today, more and more ideological think tanks are producing their own “news” reporting and distributing it though the internet, and also via traditional news providers. Whether they are on the political left or right, their tax exemptions mean each is subsidized by our tax dollars.
Take the Franklin Center for Government and Public Integrity, which was founded in 2009 for the primary propose of reporting its brand of “news.” According to its website it specializes “in state and local government,” the Franklin Center “provides professional training; research, editorial, multimedia and technical support; and assistance with marketing and promoting the work of a nationwide network of nonprofit reporters.” The Franklin Center proclaims itself “leaders in the new wave of non-profit journalism. It boasts of employing “reporters, news sites, investigative journalists and affiliates across the country.” With ties to the American Legislative Exchange Council (ALEC) and the State Policy Network (SPN), the Franklin Center is decidedly conservative in its policies and viewpoints. The Center aims to provide a counter-weight to liberal-leaning groups like Media Matter and MoveOn.org.
Take a look around the newsrooms of Alabama. The total number of journalists covering state and local government is no where near 100. Groups like the Birmingham based Alabama Policy Institute (API) are trying to fill that void. API is the state’s only major conservative think tank. With its long tradition of encouraging lawmakers to enact pro-right legislation, the tax-exempt group is affiliated with the State Policy Network. http://www.spn.org/directory/alabama-policy-institute It is lead by conservative writer and thinker, Gary Palmer.
And API has jumped on the bandwagon of funding reporters to produce “news” for its audience. According to API’s 2011 IRS Form 990, the public tax filing for non-profits, the group spent $17,344 to employ an investigative journalist. Palmer did not respond to our phone calls and emails seeking an interview about API’s venture into publicly subsidized investigative reporting, and exactly what stories they’ve produced. API is a tax-exempt, 501(c)(3) charitable organization that defines itself as a “non-partisan, non-profit research and education organization dedicated to the preservation of free markets, limited government and strong families, which are indispensable to a prosperous society.”
By law, 501(c)(3) organizations are not required to disclose the names of donors to the public. Most do not.
Dr. Stephen Ward, Professor of Journalism Ethics at the University of Wisconsin-Madison, writing for http://www.media-alliance.org media-alliance.org, said “The potential for conflicts of interest in non-profit journalism is high because…, the journalists are dependent on relatively few funders.” Ward points out that, ”The old adage that whoever pays the piper calls the tune is a warning for any form of journalism.”
News organizations have always been slightly suspect because of the potential influence of advertisers or the owner’s personal bias. Groups like The Franklin Center and API promote the idea of transparency. Yet they hide the identities of their funders, and, in some cases, the journalists they sponsor.
News outlets in Alabama that have been issued official press credentials have clear revenue models – they run largely on paid advertising. The exception is yellowhammerpolitics.com.
(The Alabama Political Reporter is funded by advertising which is prominently displayed)
According to the website, Cliff Sims is the founder of Yellowhammer Strategies and the Publisher of Yellowhammer Politics.The site began operating in December 2011 – the same time API began using its tax-free status to sponsor an “investigative reporter.” Yellowhammerpolitics.com has no advertising or other visible means of generating revenue. Calls and emails to Sims were sent requesting an interview, they were not returned. By the way, Sims and wife Megan on the Associate Board of Directors of the Alabama Policy Institute. http://www.alabamapolicy.org/about-api/associate-board-of-directors/
Sims is a regular inside the republican caucus meeting during legislative sessions. Other reporters are denied access to these meetings. He also appears to have an intimate relationship with Speaker of the House Mike Hubbard. Sims is also a regular guest and substitute host on WAPI’s Matt Murphy show.
Yellowhammer Strategies is registered with the Alabama Secretary of State as a for-profit http://arc-sos.state.al.us/cgi/corpdetail.mbr/detail?corp=054573&page=name&file= business.
On his site Sims says he is a real estate investor and boasts of a career in the music industry. In the past Sims has indicated that his real estate investments and music royalties are a part of what funds the online venture.
The timing of API’s hiring of an investigative journalist may be purely coincidental. However, the lack of response from Palmer or Sims leaves the question open.
Over the last decade, conservative think tanks have sought to, perhaps, level the playing field with liberal leaning nonprofits. Pulitzer Prize winning journalist Walter Lippmann, wrote, “The quack, the charlatan, the jingo, and the terrorist, can flourish only where the audience is deprived of independent access to information.” In a new age of new media, these words soundly resonate.