04/06/2012 03:47 pm ET Updated Jun 06, 2012

Will the Death of Traditional Journalism Permanently Change Philanthropy?

There's a huge shift going on in how Americans access journalism -- and how it's going to be paid for. Decreasing circulation for newspapers and news magazines reflects a consumer preference for "on demand" news from sources like Politico, The Huffington Post and Local TV news appears to be on the rocks as well. And, as the Pew Research Center noted last year, new mobile technologies represent a serious threat to local TV news. Local news is being covered by innovative sites like the Grand Rapids Rapidian, and The traditional advertising-based funding stream for journalism appears to be obsolete, without an obvious replacement. It's really not clear what business model will support web-based journalism, but I'm growing increasingly suspicious that the need to support journalism will fundamentally alter the role of foundations in the United States.

If you wanted to understand the way grantmaking foundations have worked for the past hundred years, the easiest thing to do would be to recite the old phrase: "Philanthropy invents, government implements." Innovations as diverse as the white lines on the side of the road (they reduce head-on accidents dramatically) and Sesame Street were developed and tested using foundation grants. But when the time went to take these projects to scale, only government funding was sufficient. And foundations moved on to seek other innovations.

But as foundations realize the profound impact of losing the communications vehicles that tie our society together, they're going to recognize the imperative of supporting journalism in their field or community. At a global level, funders rely on journalism to help the public understand challenges like world wide poverty, climate change and human rights violations.

Without the ability to hear from, and communicate with the populations they serve, foundations will find their mission nearly impossible to accomplish. So, they'll solve that problem.

It seems inevitable that health funders are going to be providing funds to support reporting on health care issues. Same with education funders, environmental funders -- in fact, the whole range of foundation interests will probably need to be reflected in foundation-supported news. In fact, community foundations are already leading the way by funding experiments in community news like the Rapidian and an organization funded by our foundation,

The big difference here is that unlike the historical pattern of "innovate and get out," philanthropy might find itself in this business for the long-term, and by "long-term" I mean forever.

The very notion of foundation-supported news has some old newsroom types clutching their chests and believing the world is about to end. I've had newspaper editors tell me that they'll never put up with it because they can't imagine that foundations wouldn't tie restrictions to their reporting. Setting aside the silly notion that no newsroom decision was ever made while considering advertiser reaction, most of the old media types have no alternative ideas. And they rightly reject the idea of journalism funded by government.

It's hard to imagine another source of independent funding that could meaningfully support the reporting that needs to be done. Foundations, alone among American institutions, are used to fund projects they won't exert control over (in fact, the National Committee on Responsive Philanthropy, a relentless critic of foundations, is funded entirely by foundations). Of all the models for funding journalism, the "NPR" model (using charitable donations) seems the most promising -- or at least it seems to be working best.

Foundations aren't likely to be the only solution. In fact, important areas of coverage (international affairs, war reporting, etc.) aren't in the mission of many foundations. And it's not clear where that important funding will come from. But the lack of a free flow of independent reporting will never be acceptable to a group of institutions dedicated to supporting and improving civil society. And in the end, I believe that philanthropy won't find that acceptable.

(Full disclosure: I am the chief executive officer of a nonprofit organization that owns approximately 26 percent of the stock of Reading Eagle Company, which publishes The Reading Eagle, the main daily in Reading, Pa., and owns WEEU-830AM, a local radio station based in the city.)