Development

Delays by IRS put chills on news startups

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Nonprofit news outfits that have sprung up across the country to fill gaps left by commercial media have hit an unexpected barrier in establishing themselves as providers of local news and information: the Internal Revenue Service. As many as a dozen journalism startups, most of them run largely by volunteers and accepting no advertising, have had their requests to be recognized as tax-exempt organizations delayed for many months and, in some cases, years.

Development

Policy delay of nonprofit status spikes Chicago News Cooperative

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Rumors started quickly, trying to explain why the Chicago News Cooperative was closing. The Internal Revenue Service had rejected the co-op’s application for nonprofit status. Then it was said that the MacArthur Foundation had refused to fund the startup out of fear it might take down City Hall friends. The truth was more prosaic. Several events — its tax status, its inability to lasso a deep-pocket donor and the demands of its publishing partner the New York Times — moved the news co-op to suspend operations Feb.