After senior management positions at Dow Jones and The Wall Street Journal, Dick Tofel helped start and eventually led the well-known, nonprofit investigative journalistic entity ProPublica for 15 years. Today he consultants the industry as the principal of Gallatin Advisory. However, Tofel recently "lit up the Twittersphere" when he posted on his blog, "Second Rough Draft," an unabashed and unvarnished assessment and warning about how philanthropic funds are awarded to journalistic enterprises. He stated how there may be flaws within the process that some organizations and associations employ today — questioning that "Given limited resources, shouldn't more money go to news orgs directly, even if that means making hard choices?”

In the November 3, 2022 post entitled "A Few Words of Warning About Funding Intermediaries and Philanthropy’s Leaky Bucket,” Tofel states that he is concerned that organizations like LION (Local Independent Online News) Publishers, the Knight Foundationand others “may be getting a bit out of scale” in handling the millions of dollars of funds they allocate. He sees a "more pressing need for funding nonprofit news organizations directly." Tofel states, "To put a finer point on it, I am increasingly worried when I observe what I see as the increasing fragility of many nonprofit newsrooms juxtaposed with the robust growth of the intermediaries whose mission is to support them.”

Within the piece, later "picked up" and published by Harvard's NiemanLab, Tofel cites data showing how half of LION Publishers' members, between the years 2020 and 2021, showed no revenue growth at all, while the association itself had in the same period revenue growth from less than $700,000 to $3.8 million. And The Knight Foundation spent more than $10 million on staff and trustees in 2020 to make $71 million in grants, while the much larger and more diversified Ford Foundation spent on staff and trustees in the same year about as much as Knight spent on grantees ($71 million again) to make about $805 million in grants.

In this 163rd episode of "E&P Reports," we go one-on-one with ProPublica founder Dick Tofel, first on his latest opinion piece on how there may be some flaws in how organizations like LION Publishers and the Knight Foundation award millions in philanthropic journalistic funds. And his views that the only sustainable model for local journalism will be nonprofit enterprises.