All That AI Money, New Philanthropy and What It Means for Journalism
Welcome to Second Rough Draft, a newsletter about journalism in our time, how it (often its business) is evolving, and the challenges it faces.
Craig Newmark and Craigslist didn’t kill newspapers, or even classified advertising in print. Newspaper publishers did that, being too late to recognize the threat from digital and too clumsy when they finally did. But Newmark made a lot of money off the transition (although if he hadn’t someone else would have). So he gets more than occasionally blamed for it. A mild-mannered guy, he often becomes testy when accused of having hurt the news business, and thus undermined journalism.
Whether or not responding to that was part of his motivation (he insists not), he has devoted many millions of his gains to bolstering the new news, including giving enough to have the City University of New York’s journalism school named after him, as well as supporting lots of newsrooms and related efforts. Even as most of his philanthropy has more recently moved on to cybersecurity and veterans (and pigeons), journalism in this century has been lucky to have him on its side.
This story, familiar to many of you, feels worth recounting just now, because, as AI destroys search traffic and perhaps much more, we are going to need some AI Craig Newmarks. The key trends right now in journalism philanthropy seem to me to be that legacy institutional foundations are retreating a bit from the high water mark of the debut of Press Forward three years ago, while more major donors (wealthy individuals) emerge, although not at sufficient pace to lift, or even float, all the nonprofit boats.
At the same time, however, as the SpaceX IPO and the teeing up of the same by Anthropic and OpenAI dramatically illustrate, an enormous wave of new wealth is about to wash over America, and with it, undoubtedly, a new wave of philanthropy. The OpenAI Foundation alone owns more than a quarter of that company, which could easily throw off more than $11 billion annually in legally-required charitable spending. That’s about one and half times what MacKenzie Scott gave away last year, and will make the OpenAI Foundation more than twice the size of the Gates Foundation, previously the world’s largest philanthropy.
Neither Scott nor Gates have given all that much to American newsrooms—neither, for instance, has matched Newmark in this regard. So our specific expectations for the OpenAI Foundation should be modest, at least until otherwise demonstrated. But the new wealth hardly stops there. Last week’s SpaceX IPO alone left more than 400 people with holdings exceeding $100 million each, and the three IPOs combined are set to yield 20 new billionaires. The seven founders of Anthropic have pledged to give away 80% of their wealth, which collectively roughly equates to the current assets of the Gates Foundation. Unsolicited gifts of $100,000 or more from employees of these firms are starting to land in nonprofit mailboxes, including those of newsrooms. There will be much more, one hopes, once the platforms are public.
What can we say about where in journalism this funding might go? Some of it, you would expect, might end up fueling efforts at accountability for AI itself, not only directly to investigative shops, nationally and perhaps also locally, but to and through focused efforts mounted by places like the Tarbell Center (where I am an adviser).
If the past is any guide—and in this respect it will almost surely be—the philanthropic passions fueled by AI won’t all be related to the origin of the funds. Some will end up supporting initiatives in healthcare, climate change and other fields, and some of those funders will recognize, as others have, that journalism funding can and should play a role in any broad effort to better inform or shape the views of the public. Some of the money will surely aid local communities, which could be especially critical to local journalism in California and Texas—and elsewhere as AI becomes more pervasive, and the companies and employees involved more geographically dispersed.
Beyond punching up the “donate” buttons on their sites, what should journalism nonprofits do to prepare for philanthropy’s new riches? Most important is that this shift will result in ever greater relative importance for major gift fundraising, and considerably accelerate the trend away from focusing on institutional foundations. Other than the smallest nonprofits, if you don’t have someone focused on major gifts, you’ll need one; if the staff you have isn’t up to snuff, you need to address that.
On the small gifts/membership side, make sure you have tools in place to mine your lists for those with new-found “capacity” (wealth)—and that you are using those tools. This should also serve as a reminder to make sure your “about” pages are putting your best foot forward, and conveying the information relating mission, accomplishments and contact information about which prospective donors will be curious.
Like me, you may not think it’s cause for celebration for a nation with 35 or 40 million human beings living in poverty, with 40 million needing government help to eat, with perhaps 6 million families in substandard housing and more than half a million homeless, to have its first trillionaire. That too is part of the context for the coming wave of philanthropy. Many of us committed to journalism continue to believe that part of its promise and potential lies in confronting such unfairness, and eventually in redressing it. It is ultimately toward that goal that the new wealth commands our attention.