Florida’s largest newspaper, the Tampa Bay Times, has a fundraising campaign this week in which it asks for donations to “fund local news.” However, donations do not go to the Times. Also, they may not be tax deductible, despite the Times unconditionally stating that they are on its fundraising page.
“You can make a tax-deductible donation – in a favorite journalist’s name,” the Times says on its fundraising page. But the Tampa Bay Times is a for-profit company, and not an entity listed by the IRS as being eligible to receive tax-deductible charitable contributions, or any other tax-deductible contributions.
The Times also says on its fundraising page that “we [The Tampa Bay Times] rely more and more on…the support of people like you who believe in the importance of local journalism.” Their statement implies that donations go directly to the Times. They do not.
Times reporter Chris O’Donnell posted a link to the fundraiser on his Facebook page. “Any donations go to the Times through Journalism Funding Partners [JFP], the 501(c)(3) organization that accepts tax-deductible donations for journalism funds,” O’Donnell responded when asked about the fundraising campaign.
To be clear: this Times reporter, who participated in the fundraiser, believes that “any donations go to the Times”…but “through JFP.” As we will see, it is unclear if the donations are actually going to the Times. And if they are, whether they are tax deductible.
O’Donnell also stated what the fund-raising page itself claims, which is that the donations are tax deductible. But are they? Donations going “through” a non-profit earmarked “to” a for-profit company like the Times are unlikely to be tax-deductible. They will likely be seen by the IRS as an impermissible end run around relevant US tax laws governing tax deductible contributions because the donations ultimately are for the benefit of an entity ineligible to receive tax-deductible charitable contributions.
“JFP is providing funds to this news organization for their endeavors in support of this educational purpose,” a statement by JFP says on the Times’ fundraising page. They do not state what that “educational purpose” is, but clearly state that it provides “funds” to the Times.
We asked JFP if they had obtained a legal opinion from the IRS whether the donations remain tax-deductible. After all, the ultimate beneficiary in this case appears to be a for-profit corporation. A donation to a for-profit entity is allowed under US tax law, but can never be tax deductible.
“Journalism Funding Partners (JFP) is a nonprofit 501(c)(3) organization as designated and approved by the IRS,” wrote Rusty Coats, Executive Director of the Sacramento, CA based JFP in an email to the Guardian. Contrary to what Coats wrote, the IRS does not “approve” non-profits. They issue determinations. Coats also did not provide the legal opinion from the IRS that we requested.
“In the case of the Tampa Bay Times, JFP acts as its Fiscal Sponsor for this campaign, covered by a Fiscal Sponsor Agreement,” Coats also wrote. He did not explain what “Fiscal Sponsor” means, provide a copy of the Fiscal Sponsor Agreement, or confirm that the funds being donated actually go to the Times.
Since Coats did not answer our question about the tax deductibility, we asked him again via email whether the IRS has or other competent legal counsel offered a written opinion to JFP about the tax deductibility of donations under their scheme? We had not received an answer at the time of publication of this article.
We also asked Paul Tash, CEO of Times Publishing Company, what due diligence they had performed on this donation scheme before telling donors that their donations are tax deductible. We sent Tash two emails, but did not receive a response prior to publication of this article.
As mentioned above, the IRS does not “approve” 501(c)(3) organizations as Coats stated. The IRS issues letters of determination in which they determine whether organizations like JFP are exempt from federal income tax under the Internal Revenue Code (IRC).
The JFP’s determination letter effective June 18, 2019 shows that they began as “McClatchy Journalism Institute.” It is unclear when or why it changed its name to Journalism Funding Partners.
JFP says it prioritizes “coverage-topics that have been particularly reduced by the wholesale declines in local news, including equity, economic mobility, education, health, housing, gun violence and the environment.” This could mean that the funds going from JFP to the Times come with “coverage-topic” strings attached to them.
The Times campaign page included a picture (shown on right), presumably of reporters. The picture raises the question whether Times’ reporters put food in to free pantries, or have been reduced to getting food from such pantries.
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That picture was not the only messaging that was muddled. The Times fundraising campaign was called “It’s Your Times,” yet donations do not confer ownership or influence over “your” Times.
The public was also left with the impression that donations, at least part of them, were going to individual journalists. An example of a donation announcement is shown on the left in which it says that an individual reporter “received a donation” from a named donor.
However, O’Donnell confirmed that donations in fact do not go “to individual reporters” but to JFP. Thus the claim that a reporter “received a donation” is at best misleading.
The largest donor by far to date is Times CEO and Board Chairman Paul Tash. He chose to “credit a team member” when making his donation, that person being reporter Annica Keeler. “Of all your employees,” we asked Tash via email, “why did you choose to credit one employee and why Ms. Keeler?” We did not receive a response.
The campaign looks to fall far short of its stated goal of raising $173,000, which the Times says is “the equivalent of a week’s newsroom budget.” It currently looks like it will reach one fifth or one quarter of that goal.
Is the Times in fact raising money only for JFP while using their own reporters as poster children in that effort? Or is the JFP funneling all or most of the donations to the Times, thereby raising questions about the tax deductibility of those donations? Why does Paul Tash give “credit” to none of his reporters except one?
It’s hard to know the answers to any of these questions when the parties involved won’t answer questions. The irony of journalism industry executives stonewalling journalists when asked about their apparent deception is surely noted by our readers.
As always….the Guardian reports and our readers decide. Like our Facebook page to find out when we publish articles.
