With many new news organizations launching as nonprofits and many nonprofits moving into the news business, one has to wonder: Exactly where does journalism end and something else — call it spin, opinion, or advocacy — begin? Or to phrase the question as Chuck Lewis recently did for me: If a nonprofit says it’s doing journalism, what makes it legit?

The line — if you believe there ever was one — is becoming increasingly blurred. As the traditional advertising-and-subscription model of newspapers continues to erode, other institutions — including advocacy, membership and charitable nonprofits — are leaping to fill the void. But it’s not clear that some new entrants are playing by the rules of journalism and nonprofit accountability. Or more accurately, it’s not clear that they want to.

In this uncertain environment, the question of legitimacy looms large, particularly for nonprofits. As beneficiaries of taxpayer support, nonprofits have a special duty to be absolutely transparent. If they want to call their work journalism, the material they publish must be good enough meet any test of professional standards that might reasonably be applied, from both the realms of journalism and of nonprofit management.

Trouble is, no widely accepted set of best practices or due diligence exists for journalism nonprofits. To separate journalism from what Dan Gillmor has dubbed “almost journalism,” many in the business have borrowed from Justice Potter Stewart‘s standard: “I know it when I see it.” Or at least they think they do.

When you can’t know it when you see it

This standard has worked most of the time. But it failed notoriously in December, when The Washington Post published a story by The Fiscal Times, a new, online news organization owned by The Fiscal Times Media Group LLC and backed by investment banker and former Commerce secretary Pete Peterson. Peterson is a long-time deficit hawk, and has helped fund the Concord Coalition, a nonprofit that is “dedicated to educating the public about the causes and consequences of federal budget deficitseradicating the federal deficit.”

As recounted by Post ombudsman Andy Alexander, the article drew criticism from progressive critics of Peterson because it quoted the president of the Concord Coalition, but failed to mention that the group receives funding from Peterson’s foundation. The article — reporting that momentum was building for a plan to name a special bipartisan commission to address the nation’s debt — also fell short of the Post’s standards because it cited data from a study supported by the foundation but again failed to note the foundation’s backing, according to Alexander.

Compounding transparency issues, The Fiscal Times gives mixed signals about its corporate status.

In fact, The Fiscal Times is not a nonprofit. It has a “.org” landing page and invites readers to “join now” to create a “Member ID.” It also says on its about page that it “is part of a new era of independently supported non-partisan journalism.” But it is incorporated in Delaware as a limited liability company, or LLC, a for-profit structure most often used by sole proprietorships, partnerships or small businesses.

Jackie Leo, editor in chief of The Fiscal Times, told me in an email that the organization changed strategies shortly after launching. “When we started this project, we thought we would model it after ProPublica or some of the other non-profit news sites,” she wrote. “But our lawyers pointed out that if we post opinion pieces (from our bloggers and columnists) about candidates running for office or bills pending in Congress, and if that opinion can be deemed as influencing the outcome of a vote, the IRS would consider it ‘lobbying’ and we would lose our 501c3 status. With that in mind, we decided to create the LLC.”

Did the Post know all this before it agreed to publish The Fiscal Times’ work? Judging from Alexander’s column, the Post had no formal means of screening its reporting partners. Rather, it appears to have relied almost exclusively on institutional familiarity with the Fiscal Times’ staff, which includes former Post reporter and editor Eric Pianin.

Setting up guidelines

The controversy has subsided. But it has left a lasting impression in journalism circles, particularly in Washington, and nobody wants to repeat the Post’s mistake. As Vivian Schiller, CEO of National Public Radio, told me in an interview, “my alarm bells go off” when she looks at the Fiscal Times’ corporate structure, financial backing and reporting focus.

At NPR, Schiller added, editors employ a set of criteria to evaluate potential partners. Among them: nonprofit status, a well-regarded board of directors and top-notch journalists. But the process remains an informal one.

So what to do?

As I’ve talked over this problem with Lewis, Schiller, David Westphal and others who think about it a lot, I keep coming back to the idea that some standards are in order — a Good Housekeeping seal of approval, if you will, for nonprofit journalism.

This task may be easier said than done.

To begin, there are some deceivingly simple threshold questions. For one, should the nonprofit sector take it upon itself to set standards for its journalism and business practices? If yes, then who should be on the drafting committee?

If not, then are journalism nonprofits willing to live with the current mishmash of definitions of journalism put forth by entities as diverse as the Senate Press Gallery, the Pulitzer Committee, and perhaps the IRS? And how about other stakeholders such as the Post, NPR and others that have come to rely on investigative and explanatory reporting from nonprofits? Following The Fiscal Times episode, will they overreact and overlook work by ambitious, high-quality news organizations?

It seems to me that the answers should come from the nonprofit sector of journalism, if for no other reason, than to minimize damage potential damage from bad actors that might yet emerge from within its ranks.

Starting points

No list of criteria or standards can guarantee quality or take the place of professional responsibilty. But it is a place to start — much like the new IRS Form 990, which was re-designed based on input from the nonprofit sector. So here are some suggested criteria that might help.

Nonprofit Governance:
— 501(c)3 or 501(c)4 status
— All-volunteer publisher board
— 990s clearly posted online
— Major donors named
— Case for philanthropy linked to editorial indpendence
— Clear accountability measures
— Clean accounting opinion

Journalistic Professionalism:
— Functionally independent newsroom
— Journalism advisory board or ombudsman
— Adherence to SPJ Code of Ethics
— Supportive institutional culture
— Submitted entry for professional prize (SPJ, IRE, etc.)
— Holder of federal or state press credential

Comments? I plan to spend the next few months researching this question in greater depth, and I welcome thoughtful input.

Also, for those planning to attend the We Media conference next month in Miami, this is one of the issues we plan to address during our panel on nonprofits in journalism, so please come ready to discuss.