What would Paul Dacre say if The Guardian became a fully-fledged charity?

In the middle distance, a different kind of Guardian Media Group appears to be taking shape.

The Sunday Times reports that GMG investments like EMAP and Trader Media Group, as well as wholly-owned subisidiaries that operate radio stations and classified websites, will be hived off into ‘an investment portfolio from where they could be sold over time”.

So what? Well, it’s what insiders call the ‘direction of travel’that’s important here. At some point in the future, we may wake up to find that The Guardian is being run by a charitable foundation that looks rather like The Wellcome Trust.

This weekend’s apparently innocuous restructuring news feels like part of this process. In this respect, it resembles the 2008 decision to re-cast The Scott Trust as a limited company (which left the way open to selling EMAP and Trader, and banking the cash, without incurring a huge tax bill).

From one perspective, charitable status looks like a sensible way to run a news organization, especially one that remains committed to a future that’s web-based and ad-funded. GMG’s current range of investments is illiquid. An all-digital existence, mostly financed by ad revenues, will be highly cyclical. Setting up a cash-rich foundation seems like a logical response.

Yet there are potential problems. Among them is the likelihood that free market-loving rivals, like Paul Dacre, would view this transformation as an unacceptable triumph for the subsidariat.

At the moment, Guardian Media Group’s corporate structure is tricky to interpret, and therefore to criticise. It’s neither wholly a charity, nor a business; neither fish nor fowl. The notion that The Guardian should be ‘profit-seeking’rather than merely profitable captures this ambivalence. Setting up a charitable foundation to stand behind The Guardian would give free-marketeers a much bigger barn door at which to take aim.

As a result, charitable status could become a hyper-political issue (rather like the BBC’s tax-funded existence). If The Scott Foundation (as it might be called) exists solely to prop up a commercial enterprise that competes aggressively with its rivals, it would be reasonable to expect criticism. Some might regard the result as a sham charity, rather like the ones that run private schools in this country.

The parallel isn’t entirely pointless. During the Blair-Brown years, political pressure was applied to these sham charities. In return for a soft-touch regime, they were encouraged to open up their facilities for the benefit of surrounding communities.

If similar pressure was applied to The Scott Foundation, or if it decided to fund external causes as a matter of course, what else might take the trustees’ fancy?

After lobbying from a culture secretary, it might make sense to donate £25m to local TV start-ups. Or invest in cross-industry technology platforms. Alternatively, it might be a good thing to subsidize hyperlocal bloggers, or organizations that protect free speech and press freedom.

Almost without exception, you can see where this is heading. Plenty of possibilities exist, but many of them will be accompanied by political pressure, and the inevitable allegations of economic favouritism, political bias and social engineering.

Converting a national newspaper into a charity might sound like a good idea. In reality, it’s unlikely to be an easy road.

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