Center for Public Integrity considers merger or closure amid serious financial problems

The Center for Public Integrity, one of the oldest and best-known nonprofit newsrooms in the United States, is considering merging with a competitor or closing amid turmoil at the highest levels and financial problems that have significantly sapped reserves, according to a news release. two people with knowledge of the inner workings of the organization.

The nonprofit fell about $2.5 million short of its 2023 budget target of about $6 million, according to the two people, who spoke only on condition of anonymity to protect their relationships within the organization.

This month, Paul Cheung, the organization’s CEO, resigned after an employee accused him of unethical behavior. The board also eliminated the position of editor-in-chief Matt DeRienzo, who has left the nonprofit.

In a statement, the Center for Public Integrity said it had a “financially challenging year,” like many other nonprofit media organizations.

“The board remains committed to CPI and its essential mission, and is working diligently to determine the best path forward for our journalism,” the nonprofit said in a statement.

The financial peril facing the Center for Public Integrity threatens to destroy a newsroom of about 30 journalists that has kept tabs on powerful institutions for decades. Much of the funding comes from foundations interested in supporting investigative journalism, including the Knight Foundation and the Robert R. McCormick Foundation.

Now that reserves have dwindled, the board of directors is considering drastic measures to address the situation. Earlier this year, the Center for Public Integrity explored a possible combination with The Markup, a nonprofit newsroom that publishes investigations about technology, but it never came to fruition. The organization has also requested cuts to its 2024 budget, according to three people familiar with the discussions.

Many newsrooms have fallen on hard times amid a tough advertising and subscription market. Several companies, including The Washington Post, The Wall Street Journal and The Los Angeles Times, have laid off employees.

Founded by investigative journalist Chuck Lewis in 1989, the Center for Public Integrity has won numerous awards for its journalism, including the 2014 Pulitzer Prize for an investigation into a rigged system that denies health care to coal minors. Last year it won an Edward R. Murrow Award for Overall Excellence. Along the way, the company pioneered a model for investigative reporting that served as a template for the next generation of nonprofit newsrooms. Over the next three decades, several nonprofits — including ProPublica and The Marshall Project — followed in his footsteps.

“CPI was a very important news organization in the formation of modern nonprofit news,” said Richard Tofel, the former president of ProPublica. “What Chuck Lewis really innovated was a dedicated staff that would do long-term investigative work designed to stimulate broad reporting in the hopes of bringing about change.”

Before Mr. Cheung resigned from the Center for Public Integrity, he was at the center of a human resources complaint, including a Slack message he sent to another employee telling them to “screw some $$$” for a presentation to a foundation. After the message was passed to the human resources department, the complaint said, Mr. Cheung edited his message to read “explain some $$$,” which the complaint said was “a significant change to reflect the meaning and intent of his writing to change’.

Mr. Cheung denied in a statement that he misrepresented the nonprofit’s financials to its staff, board and partners. He added that he had “worked diligently to ensure the sustainability of the organization.”

“CPI is facing many of the same economic headwinds that many of our colleagues have faced since the pandemic,” he wrote.

The Center for Public Integrity investigated the incident and found no evidence of financial impropriety, according to a person familiar with the situation.

Center for Public Integrity staff have also expressed dissatisfaction with the nonprofit’s lack of communication about financial instability and its business plan.

In a December letter to the nonprofit’s board, staff said morale was low in several departments due to declining trust that led to “a rift between our CEO and the editorial team.”

“That collapse is leading us down a catastrophic path, both financially and culturally,” the letter said.

Several nonprofit newsrooms have explored mergers in recent years to strengthen their journalism and make a more compelling pitch to potential funders. In December, Mother Jones said it was partnering with the Center for Investigative Reporting, an investigative news organization co-founded by former “60 Minutes” investigative producer Lowell Bergman.