ADVOCACY GROUPS TAKE DIFFERENT APPROACHES, FUNDING ROUTES TO MEDIA ISSUES

The Media Institute, founded in 1979, is nonprofit research foundation with no endowment, Vp Richard Kaplar said, and therefore it depends primarily on private sources such as companies, trade associations and some philanthropic foundations. Gannett, Tribune, NAB, the Newspaper Assn. of America (NAA), NBC, ABC and Fox are few of major companies and trade associations that are members of Media Institute. Grants obtained for special projects and revenue from the sale of publications also provide financing, Kaplar said.

The Media Institute’s IRS Form 990 for 2000 showed revenue of just over $1 million and assets of $529,637. Contributions were $786,250 and program services $228,971, with 2 totaling nearly all of group’s revenue. Its expenses for 2000 were $661,909, for net income of $361,458. The Institute spent $251,014 in compensation for officers, its largest single expense, along with $84,458 in other salaries and wages. It listed multiple individual donations of $5,000 or more, with two $200,000 donations and one of $100,000, although donor’s names were withheld. Pres. Patrick Maines was paid $150,000 in salary and $15,000 in benefits in 2000, while Kaplar received $101,014 salary and $10,101 in benefits.

Primary program conducted by Media Institute is Cornerstone Project, high-profile effort that has raised questions among some of its funders on how money is being spent, we're told. The Cornerstone Project aims to raise public awareness of First Amendment through conferences, public service ads, books and various other public awareness activities. NAB is a member of Media Institute’s Cornerstone Project, and Radio-TV News Directors Assn. (RTNDA) is a member of Cornerstone Project’s Advisory Counsel. However, Kaplar said: “RTNDA is not a financial contributor to the Media Institute, but one of its program partners.” In addition, McCormick/Tribune Foundation and the Gannett Foundation help fund Cornerstone Project. The Media Institute was one of more reluctant participants in our survey, and when we asked for identities of its other funders, Kaplar said “we do not list companies that are members for privacy reasons. Beyond the Cornerstone Project, we do not get into it.” As for concerns we have heard about level of disclosure of Cornerstone financing (which is not broken down in its 990s), Kaplar said he had “never heard anything to that effect.” Cornerstone revenue is included in total membership dues listed on its 990, which doesn’t break down sources of donations separately. “The programs speak for themselves,” he said.

The Media Institute acknowledges it’s funded by corporations and their trade associations, approach that rankles some nonprofit advocacy groups that take issue with media companies. One such official said of Media Institute: “My understanding is, the Media Institute essentially sells memberships onto its board.” That individual also suggested Institute was used by media groups that sought to commission paper on topic of benefit to them by giving donation to Institute. If one talks to some Washington donors to Institute, this individual said, “they feel they are being shaken down by the Media Institute.” Kaplar said that to his knowledge “we are on good terms and have a good relationship” with everyone.

Corporate Funding Is Less Prominent With Other Groups

Often taking opposite approach from Media Institute is Center for Digital Democracy (CDD), public interest group that focuses on open access issues involving broadband Internet deployment and on other media ownership rules. CDD has no members and therefore no dues structure, we were told. In addition, organization receives no corporate, govt. or federal funding. However, it does receive funding through general support grants awarded by philanthropic organizations. Some of CDD’s larger general grant supporters include Rockefeller Family Foundation, Albert A. List Foundation and Arca Foundation. CDD was founded in April 2001 by Jeffrey Chester, former exec. dir. of Center for Media Education. As CDD was chartered as 501(c)3 nonprofit organization only in Jan. of this year, Chester said it hadn’t yet filed Form 990.

Media Access Project (MAP) addresses some similar topics as CDD, but as nonprofit public policy telecom law firm. “While we are often called upon to express views that reflect our constituency as a whole, MAP typically appears in court on behalf of other nonprofit organizations such as civil rights or civil liberties organizations, as well as religious, consumer, environmental and labor organizations,” Pres. Andrew Schwartzman said. MAP focuses on legal policy issues related to protecting First Amendment rights. More than 90% of MAP’s funding comes from foundations, Schwartzman said, with other 10% from individuals, law firms, corporate contributions and Combined Federal Campaign (CFC). Some of larger foundations contributing to MAP are Ford Foundation, MacArthur Foundation, Open Society Institute and Albert A. List Foundation. MAP was founded in late 1972 by Thomas Asher, D.C. telecom lawyer no longer affiliated with firm.

MAP’s 2000 revenue of $893,191 fell just short of Media Institute, according to MAP’s most recent 990, and its assets were $640,032. Bulk of revenue came from contributions ($802,999), with program services generating $82,819. MAP said it spent $194,601 “promoting use of First Amendment values in implementing new digital telecommunications services” related to broadband and digital technologies in 2000. Expenses were $513,272, for net income for year of $379,918. MAP spent $107,890 in compensation for officers and $166,590 in other salaries and wages. Schwartzman’s salary in 2000 was $107,890 with $11,310 in benefits, while Asst. Dir. Cheryl Leanza was paid $67,640 and attorney Harold Feld $63,640. The 990 lists 5 significant donations to MAP (donor names omitted), with one of $324,000 and another of $294,000.

Another legal group involved in similar issues is Electronic Frontier Foundation (EFF), donor-supported membership organization based in San Francisco working “to protect the rights that we've established in the real world, in the digital world,” Exec. Dir. Shari Steele said. The organization is representing peer-to-peer service Morpheus, as well as defending consumer fair-use rights against studios currently suing Replay TV owner SonicBlue. EFF is involved in privacy litigation and is focused on “educating the public through a strong grass-roots mission,” Steele said. About 5 corporations donate funds to EFF, she said, but “we don’t get many corporate donations.” Steele said “less than 5%” of EFF’s revenue came from corporations: “It may be 2 or 3%.” She also said that because of privacy concerns organization didn’t disclose names of its corporate donors.

EFF’s general membership fee is $65, Steele said, with low-income fee of $20. Organization has no corporate members, but EFF “does accept large donations from corporations and individual donors,” Steele said. She said some of EFF’s board members included “John Gilmore, a Web personality formerly of Sun Microsystems; Larry Lessig, a Stanford U. professor; Pam Samuelson, a professor at [U. of Cal.] Berkeley and an Intellectual Property attorney; Bruster Kale, who created an archive of the entire Internet - - from conception to the present; and Brad Templeton of the Claranet Corporation, which was the first electronic news organization.” EFF was founded in July 1990 by Mitch Kapor of Lotus Development and John Perry Barlow.

EFF had income of just over $2.5 million in 2000, according to its most recent 990, with assets of $589,197. Contributions totaled $2.178 million. It itemizes membership dues separately from donations, totaling $268,477. Expenditures were $2.628 million, leaving deficit for year of $120,905. Compensation was their largest expenditure, with $160,404 for officers and $437,993 for other salaries and wages. Steele was paid $73,815 in year in which she succeeded Tara Lemmey, who earned $93,654 that year.