Giving Compass' Take:
- Local newsrooms and other policymakers still need further financial funding and support due to challenges brought on by the pandemic. Christian Collins explores how policymakers and local governments can potentially build solutions.
- How can local donors play a role in bolstering funding for local newsrooms? How are newspapers handling the pandemic challenges in your community?
- Here are some funds that currently support newsrooms during the pandemic.
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Because of the COVID-19 pandemic and the ensuing economic crisis, small businesses nationwide have been in dire need of economic relief. The Paycheck Protection Program (PPP) provided some assistance for these businesses, and the industries with the highest program participation based on dollars received accounted for almost 75 percent of job growth back in May.
But not all industries in need were helped by the program. Minority-owned small businesses faced severe disadvantages: analysts suggest 95 percent of Black-owned businesses were excluded from the program, and Black and Latino businesses are more likely to lack the necessary banking relationships needed to access program funds. Restricting funding to payroll costs also ignored other costs businesses have, drawing into question whether the program prioritizes preserving businesses or just maintaining paychecks.
Many businesses overlooked or excluded from PPP funds still need assistance to weather their pandemic-related shortfalls. Local newspapers, for instance, were largely excluded, illustrating the program’s flaws and pointing to other businesses that might need additional assistance.
The pandemic has accelerated the shrinkage of ad revenue that local newspapers often rely on, with more than 50 local newsrooms closing and others turning to layoffs, furloughs, and cost-saving measures like ending print editions. Without local newspapers, communities have higher poverty rates and lower rates of educational attainment.
Communities that lose local newsrooms see increases in political polarization of voters and diminished information on the decisions of localized governmental bodies, which can lead to an increase in long-term borrowing costs. More than 65 million Americans currently live in counties with only one local newspaper or none at all.
Local governments are uniquely positioned to extend similar solutions to other struggling small businesses, as they have the greatest understanding of these businesses’ challenges. Some fear direct local government involvement will lead to government influence and censorship at news outlets, but municipal governments successfully navigated that concern (PDF) throughout history, sometimes through the establishment of municipally financed and community-owned newspapers.
Read the full article about how can policymakers help local newspapers and small businesses by Christian Collins at Urban Institute.