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The Report of The Knight Commission on the Information Needs of Communities in a Democracy

While the Commission clearly does not invite governments to meddle in the practice of journalism, it is aware of a number of proposals to aid journalistic organizations. A persuasive case has not been made to the Commission for direct subsidies to private media enterprises. But there is a social value of journalism. So, without recommending any particular measure, the Commission suggests that governments explore modest viewpoint-neutral tax and regulatory changes to help media ease the burden of rapid change amid financial turmoil. For example, state and federal governments could include a state sales tax exemption for print and online journalism subscriptions, or a federal tax credit for the support of investigative journalism.33 Other changes to federal tax law could include “permissive joint operation of for-profit and not-for-profit journalism enterprises within the federal tax exemption regime, amendment of the deduction limitations for contribution of a newspaper business to a not-for-profit organization, deferral of gain in taxable acquisitions of newspapers by not-forprofit organizations, and permissive use of tax-exempt conduit bond financing in such acquisitions.�34 Not-for-profit news organizations could also be strengthened if their advertising revenues were at least partially tax-exempt and if rules against engaging in unrelated businesses were relaxed. Without endorsing these measures, the Commission commends them for public dialogue. Local governments should take note of the civic value of private investment in information infrastructure. Public policy should encourage local entrepreneurs to fill local information voids or provide alternatives in local information flow. Community-focused venture funds and tax incentives may be appropriate to spur local entrepreneurship in media and technology applications with civic virtues. Innovation, competition, and marketplace incentives will be critical to the growth of both for-profit and not-for-profit models. Foundation funding will undoubtedly help to launch and sustain many significant local efforts. Still, the most successful nonprofits are likely to be those that succeed at developing multiple streams of revenue that are fed back into the organization. The Commission thus expects that public policies that support market incentives for the production of quality journalism will serve the interests of both for-profit and not-for-profit models.

Informing Communities  
Informing Communities  

The Report of the Knight Commission on the Information Needs of Communities in a Democracy