The Hungarian policy innovation fueling the renaissance of nonprofit newsrooms

The mid-1990s saw the Hungarian parliament adopt a policy so innovative and effective at nurturing civic engagement—and later nonprofit journalism—that it was embraced across the region.

Hungary and "pioneering funding policy that enables newsrooms and civil society organizations" aren’t phrases that typically appear in the same sentence these days—unless that sentence also includes "crackdown" and/or "restrictions."

Last week, our organization, the Center for Sustainable Media, earned the dubious honor of being named in the latest report from Hungary's Sovereignty Protection Office—a government body whose name sounds like it was generated by an AI trained exclusively on Orwellian prose. We have no idea what we’re accused of or what consequences might follow—bureaucratic cliffhangers are all the rage in Budapest these days.

While landing on lists like these feels partly like validation (we must be doing something right!) and partly like a government-prescribed anxiety, it certainly doesn't suggest we'll be receiving any state medals for advancing independent journalism anytime soon.

But it wasn't always like this.

In fact, the mid-1990s saw the Hungarian parliament adopt a policy so innovative and effective at nurturing civic engagement—and later nonprofit journalism—that it was embraced across the region. Today, it’s fueling a quiet renaissance in certain corners of Central and Eastern European media.

I want to explore this policy—a mechanism allowing citizens to redirect a percentage of their income tax directly to nonprofits, including newsrooms—because it represents something increasingly rare: a government initiative that actually strengthens independent media rather than undermining it. While Hungary's current leadership may view civil society with suspicion, this policy remains intact (for now)—a vestige of democratic innovation hiding in plain sight within a system that has otherwise grown hostile to independent voices.

The impact of this mechanism stretches far beyond Hungary’s borders, offering a blueprint for media sustainability that doesn’t rely on billionaires, tech platforms, or large institutional partners. It creates a direct line between citizens and the journalism they value, built right into the tax system they already navigate.

In post-Soviet Hungary, the state funds you

In 1996, as Hungary was still navigating its transition from communism to democracy, its parliament passed a policy innovation that would reshape civil society throughout Central and Eastern Europe. For the first time, Hungarian taxpayers could redirect 1% of their personal income tax to a nonprofit organization of their choosing.

Under communist rule, the state controlled virtually every aspect of civic life. Traditional philanthropic culture had been suppressed, leaving a vacuum that needed filling. This wasn’t just the state being charitable: the democratic transition inevitably brought economic shocks and cuts to some public services. The government needed to rebuild the voluntary sector—not just for its democratic value, but because it needed nonprofits to provide services the state could no longer afford.

The percentage mechanism offered an elegant solution to these challenges. It created a sustainable domestic funding source without requiring Hungarians to adopt new giving behaviors overnight. It gave NGOs a path to financial independence that wasn’t tied to government favor and forced them to communicate their value directly to citizens rather than to bureaucrats or large institutional donors.

Under communism, civic participation was largely performative—mandatory parades rather than meaningful engagement. The tax redirection mechanism gave citizens real agency, an opportunity to shape their democracy by supporting causes they valued.

The innovation proved so successful that it spread rapidly across the region. Lithuania, Poland, Slovakia, Romania, and others all followed suit. Each country adapted the model slightly, but the core remained the same: giving citizens direct control over a portion of public funds.

Sector, Interrupted

While the tax designation mechanism benefited various CSOs from its inception, newsrooms were fashionably late to the party, only beginning to leverage it significantly in the 2010s. This delay stemmed from the fact that the very concept of "nonprofit journalism" was seen as an oddity—almost as strange then as the idea of a profitable news startup would seem in Central and Eastern Europe today.

Two forces ultimately pushed media organizations toward this type of funding. First, the business model that had sustained journalism for decades—advertising—was being disrupted by tech giants. As Facebook and Google captured increasingly dominant positions in the advertising market, traditional revenue streams for newsrooms began to dry up.

The second factor was the accelerating capture of economically weakened media outlets by powerful actors—most prominently in Hungary and Poland, but to varying degrees elsewhere in the region too.

As the space for independent journalism contracted, editors and reporters—particularly those engaged in investigative work—chose to leave established outlets and started experimenting with nonprofit journalism. For these new ventures, the tax redirection scheme offered an attractive path to financial stability and editorial independence.

In environments where public services were faltering, government decision-making had grown opaque, and traditional democratic channels seemed blocked, citizens discovered a powerful alternative. By directing their tax percentage to investigative newsrooms, they weren't just funding media—they were creating an alternative accountability mechanism. When one's vote carries diminishing weight and institutions fail to provide proper checks and balances, supporting journalism that exposes corruption and abuses of power becomes a small but meaningful reassertion of democratic agency.

Strategies for you income tax campaign

If you made it through my—let’s generously call it historical-theoretical—introduction (rambling) about how this institution came about, you’ve earned a reward: some practical insights gathered by my excellent CSM colleagues, Maria and Ioana.

They spoke to OKO.Press (Poland), PressOne (Romania), Spotmedia (Romania), Krytyka Polityczna (Poland), Recorder (Romania), Partizán (Hungary), and Context (Romania) about their income tax fundraising strategies.

For context: if you get it right, the payoff can be significant. Both Partizán and Recorder raised over €1 million from this source alone in 2024, while OKO.Press also did well, bringing in over €500,000.

1. Tell a good story

Organizations can build a stronger connection with their audience by showcasing how redirected taxes directly fund critical work—like investigative journalism or protecting press freedom—demonstrating the real impact of their support.

• PressOne created a reel explaining what should happen with taxpayers’ money—but isn’t—and how redirecting even a small percentage to a media outlet could help make things right.

• OKO.Press uses testimonials from well-known Polish figures to highlight the importance of independent journalism. Presenting tax redirection as a way to personally support something important encourages more people to take part.

• Krytyka Polityczna taps into its deep roots. A video reminding supporters of its origins as the Stanisław Brzozowski Association underscores the organization’s historical significance. Framing donations as an investment in something meaningful with deep roots strengthens the emotional connection with supporters.

2. Simplify the process

Make donating easy. If people see that it’s quick and straightforward, they’re more likely to follow through. Clear instructions and useful information build confidence and increase participation.

• Krytyka Polityczna provides step-by-step guidance and highlights the financial benefits—explaining that donors can deduct contributions from their income, making the act of giving feel even more rewarding.

• Recorder introduced a digital form in 2021 that allowed supporters to complete the process in just 30 seconds. It wasn’t just about the form—they actively promoted it, leading to a sixfold increase in donations the first year and a tenfold increase in the second.

3. If possible, step out of the digital sphere

Connecting with people in person adds authenticity and strengthens relationships with supporters.

• Partizán hosted live debates in city squares across Hungary, connecting with communities beyond Budapest and emphasizing that the whole country matters. They also set up a call center—not just to raise funds, but to thank supporters, talk about their shows, and remind them about the tax redirection process.

• OKO.Press blended digital and offline strategies. They sent out both email and physical mail campaigns, recognizing that physical mail can create a more personal connection. They also featured videos of Polish actors, activists, and public figures supporting the organization on public transport and online.

4. It’s not just about supporting journalism

Redirecting taxes isn’t just a financial decision—it’s a form of democratic and civic agency.

• Recorder’s campaign framed tax redirection as a way to reclaim control in a corrupt environment: “You can’t control what the state is doing with your money, but at least you can control where 3.5% of your income tax goes.” In Romania, where government corruption has fueled protests, this message resonated deeply, turning tax redirection into a small but powerful act of defiance.

5. Be prepared for changing regulations

Tax redirection campaigns must adapt to shifting political and regulatory landscapes.

• In Romania, the government has progressively restricted participation, eliminating options for freelancers and retirees in 2024.

• In Poland, the increase from 1% to 1.5% tax redirection has been a positive development for organizations like OKO.Press.

P.S.

• If you want to read more, TheFix has a recent article on Partizan’s 1% campaign and one from 2023 about OKO.Press.

• If your country doesn’t have a mechanism like this, but you believe it should (it should), check out these longer studies by the European Center for Not‐for‐Profit Law and this one by Erste Stiftung, both can help your advocacy efforts.

• Next Thursday, I'm speaking about “Fundraising for Independent Journalism in Europe: Who is Still Investing in the Media and Information Ecosystem?”. This is a free webinar organized by Transitions, you can register here.