Late last night, there was as stunning development for the Philadelphia Inquirer and its sister publications, Philly.com and the Philadelphia Daily News, were donated by H.F. "Gerry" Lenfest to the nonprofit Institute of Journalism in New Media, which is part of the Philadelphia Foundation.
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The institute is headed by the deans and high ranking professors from journalism schools. Though the readership of newspapers has been in decline, there are people who want to keep the newspaper afloat.
There is still a problem with money, however, as that is what it requires to keep everyone working and producing.
“This new structure offers no quick fix,” wrote Philly.com writer Jeff Gammage, “no imminent balm to the economic woes that confront legacy news companies. PMN remains a self-governing, for-profit company, needing ultimately to fail or succeed on its journalistic merits and financial performance. What’s different is the ownership above it, changed in a way that can ease the financial struggle.”
The Inquirer was founded in 1829 and is the third oldest newspaper in the US and has won 20 Pulitzer Prizes. Along with the other two brands, they reach more than 8 million readers a month.
The transition to being owned by a nonprofit company is so complicated that even the writers and workers don't quite understand how it is all happening. Philly.com tries to explain:
In December, talks between PMN owner H.F. “Gerry” Lenfest and the foundation culminated in the creation of the institute. PMN was then converted from a limited liability company to what is known as a “public benefit corporation.” While that specific type of corporation still operates as a for-profit, it differs from a traditional corporation because it can also engage in activities that further a public benefit.
As a PBC, Philadelphia Media Network still must pay its own bills. But its directors can consider additional goals, with a main offered “benefit” being the value to society of an active news organization in the Philadelphia region.
Lenfest then donated PMN – and all of its marketable assets – to the institute. Basically, the Philadelphia Foundation’s special-asset fund owns the institute, and the institute owns PMN.
“By coming under the umbrella of the Philadelphia Foundation, the institute enjoys the benefits of being a tax-exempt organization without the need for lengthy IRS approval proceedings,” the piece continued. If the enterprise makes a profit, “its directors must then decide what to do with the money. They can use it to fund the journalistic enterprise, or give part or all of it to the institute.”
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“Of all the things I’ve done,” Lenfest said, “this is the most important. Because of the journalism.”