Center for Public Integrity Weighs Merger or Shutdown Amid Dire Financial Straits

The Center for Public Integrity, one of the oldest and most storied nonprofit newsrooms in the United States, is considering merging with a competitor or shutting down amid turmoil in its top ranks and financial difficulties that have significantly sapped its reserves, according to two people with knowledge of the organization’s inner workings.

The nonprofit fell about $2.5 million short of its budget goal of around $6 million for 2023, according to the two people, who would speak only anonymously to protect their relationships within the organization.

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

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

“The board remains committed to C.P.I. and its essential mission, and is working hard to determine the best way forward for our journalism,” the nonprofit said in a statement.

The financial peril facing the Center for Public Integrity threatens to extinguish a newsroom of about 30 journalists that has watch-dogged powerful institutions for decades. Much of its funding has come from foundations interested in supporting investigative journalism, including the Knight Foundation and the Robert R. McCormick Foundation.

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

Many newsrooms have fallen on hard times amid a difficult market for advertising and subscriptions. Several, including The Washington Post, The Wall Street Journal and The Los Angeles Times, have laid off staff.

Founded by the investigative journalist Chuck Lewis in 1989, Center for Public Integrity has won numerous awards for its journalism, including the Pulitzer Prize in 2014 for an investigation into rigged system depriving coal minors of health care benefits. In the last year, it won an Edward R. Murrow award for general excellence. Along the way, it 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 its footsteps.

“C.P.I. 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-form, investigative work intended to spur widespread coverage in the hope of generating change.”

Before Mr. Cheung resigned from the Center for Public Integrity, he was the focus of a human resources complaint that included a Slack message he sent to another employee saying they needed to “fudge some $$$” for a presentation to a foundation. After the message was flagged to human resources, the complaint said, Mr. Cheung edited his message to say “explain some $$$,” which the complaint said was “a significant change to alter the meaning and intent of his writing.”

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

“C.P.I. is facing many of the same economic headwinds that many of our peers have been dealing with since the pandemic,” he wrote.

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

Employees at the Center for Public Integrity 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, its staff said that morale was low across several departments because of declining trust that led to “a rift between our C.E.O. and editorial team.”

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

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