I see another danger … that not-for-profit ventures will delay or even choke off for-profit, sustainable entrepreneurship in news. I would prefer to see various of the many funders who gave funds to not-for-profit endeavors – note $5 million give to a new not-for-profit entity in the Bay area – instead had invested in for-profit companies that can build companies that support and sustain themselves rather than rely on hand-outs. That is God’s work.

Jarvis intends this as a paean to capitalism. But he’s got a weirdly non-capitalist way of thinking about nonprofits.

Jarvis’s notion that nonprofits are an anomaly in the market system — and therefore less “sustainable” — forgets the fact that nonprofits produce goods and function within the market system like anybody else.

Sometimes they produce public services for governments. Sometimes they produce warm fuzzies for rich donors.

Wherever the money comes from, a successful nonprofit has found a market for whatever it’s producing. That’s God’s work, too.

But let’s get serious about the usefulness of crowdsourced hard-news reporting at the local level.

Every example of how Twitter, etc., is theoretically changing journalism seems to rely on extremely unusual tragedies, disasters or sensations.

I don’t know about your hometown paper, but in the one I work for, almost all of what you’d call “breaking news” (aside from the sports and arts coverage) falls into one of four areas:

1. Cops and courts — situations known only to a tiny group of private, deeply interested and unreliable individuals.
2. Political actions — city and county governments doing stuff, known only to a handful of deeply interested and unreliable people present.
3. Studies, findings and reports — released by governments, nonprofits and businesses.
4. Pseudo-events — announced press conferences, etc.

It’s hard to imagine “social journalism” being at all reliable in (1) or (2), and it’s hard to imagine it being much more effective in (3) or (4) than simply picking up the phone, firing up the Internet or going to the damn press event.

In situations like document dumps or earnings reports, putting many eyes on the problem can be an effective way of finding hidden gems or coming up with provocative questions.

But in almost every other local reporting situation, what’s really happening is that a reporter is composing a hypothesis, testing it with facts that haven’t yet been brought to light or widely shared, then explaining why they’re important. Though the social Web can be a tool for soliciting predefined information — “have you relocated because of the recession?” — composing hypotheses is not a task crowds do well.

Anybody who thinks floods, fires and ferry accidents are what local reporting is all about should look more often at his or her local newspaper.

Update 7/28: I’ve added links to Scott Karp’s related post at Publish2. I’ve been a Karp fan for years, and I’ve got mad respect for his whole team, but today they make useful villains.

That’s exactly what Perez-Pena does today. He quotes the right people, including Jeff Jarvis, who has the emerging conventional wisdom:

The death of a newspaper should result in an explosion of much smaller news sources online, producing at least as much coverage as the paper did, says Jeff Jarvis, director of interactive journalism at the City University of New York’s graduate journalism school. Those sources might be less polished, Mr. Jarvis said, but they would be competitive.

That’s where things are going, and that’s where this blog is going, too.