The government will look at changing the law so that organisations engaged in “public interest journalism” can register as charities and benefit from tax breaks, following the publication of an independent review.
Jeremy Wright, the culture secretary, has now written to the Charity Commission to seek its views. The Commission has confirmed that it has recieved the letter.
The Cairncross Review: a sustainable future for journalism, was published by the government yesterday and made a number of recommendations to reform the news industry to help it become more sustainable.
Dame Frances Cairncross, an economist, journalist and academic, was appointed to chair the review in March 2018 and she was advised by a panel of experts from the local and national press, digital and physical publishers and advertising.
One of the recommendations from the review is to amend the Charities Act 2011 and “add the advancement of public interest journalism to the list of charitable purposes”.
The review says that charities benefit from significant tax reliefs because of their charity status and that “the best way for government to affirm the wider societal benefit of public interest news might be by granting charitable status to its providers”.
It suggests that this would also make it easier for news outlets to obtain grants or donations.
Existing law is barrier
“Charities benefit from various tax breaks as a result of their special status, but news organisations are finding it almost impossible to acquire charitable status under the current framework,” the review says.
It is in principle possible for organisations pursuing journalism to register as charities already, but in practice few have done so.
There are 12 existing charitable purposes, including “the advancement of citizenship or community development”. (see the rest below)
The review says the existing law is a barrier because it makes it difficult for charities to undertake “certain political activities such as securing or opposing a change in law, policy or decisions affecting the country” which has “excluded any type of journalism, public-interest or not, from tax exemption”.
This means that “hardly any news organisations have succeeded in registering as charities”, although the report notes that “many think tanks enjoy charitable status”.
The review does not expect larger publishers to benefit from any rule-change, because: “Most of them are commercial endeavours whose owners would be highly unlikely to sacrifice commercial benefits to secure charitable status.”
But it says titles such as The Ferret, Bristol Cable and the Bureau of Investigative Journalism, which focus on “public interest journalism”, could benefit from changes.
The review concedes that “the complexities of charity law mean this may not be straightforward,” and suggests that an alternative would be a new tax relief.
It suggests that this could be done along similar lines to the reliefs available for creative industries that produce film, television or computer games in Britain.
Government to pursue recommendation
Wright has written to the Charity Commission to explore the recommendations.
In a statement to Parliament he said: “The review noted that in the USA, philanthropic donations provide on average 90 per cent of the total revenues of non-profit news publishers.
“Although we have a different media landscape, as the review sets out, charitable status could reduce the costs for those producing this essential public interest reporting, and pave the way for a new revenue stream through philanthropic donations.
“I recognise that this avenue has been explored previously, and that some hurdles will have to be cleared, but I believe we should pursue it.
“So I have written to the Charity Commission and look forward to hearing how they can help move this forward.”
The review made a number of other recommendations including the introduction of codes of conduct to rebalance the relationship between publishers and online platforms, regulation of online platforms and the creation of an independent institute for public interest news.
It also calls for an innovation fund and for the BBC to do more through its Local Democracy Reporting Service.
‘Could be a major help’
Lawrie Simanowitz, partner at charity law firm Bates Wells said: “If this type of radical action is not taken, and swiftly, a significant part of the UK media will not survive the next decade.
"The greatest losers will be local communities. The greatest winners will be those in power, who will escape the transparency and the holding to account that journalism brings.
“Allowing some types of press organisation to register as charities would mean they could benefit from tax reliefs, and would encourage donations ranging from small individual sums through to large gifts from philanthropists.”
- The prevention or relief of poverty
- The advancement of education
- The advancement of religion
- The advancement of health or the saving of lives
- The advancement of citizenship or community development
- The advancement of the arts, culture, heritage or science
- The advancement of amateur sport
- The advancement of human rights, conflict resolution or reconciliation or the promotion of religious or racial harmony or equality and diversity
- The advancement of environmental protection or improvement
- The relief of those in need, by reason of youth, age, ill-health, disability, financial hardship or other disadvantage
- The advancement of animal welfare
- The promotion of the efficiency of the armed forces of the Crown, or of the efficiency of the police, fire and rescue services or ambulance services
Fuller explanations of each purpose are available on the Charity Commission's website.