When the conversation turns to saving America’s newspapers, this idea needs to be in the mix.

“Turn them into nonprofit, endowed institutions — like colleges and universities,” write David Swensen and Michael Schmidt in the New York Times. “Endowments would enhance newspapers’ autonomy while shielding them from the economic forces that are now tearing them down.”

Swenson is the chief investment officer at Yale and Schmidt is a financial analyst there. “As long as newspapers remain for-profit enterprises, they will find no refuge from their financial problems,” they argue. “The advertising revenues that newspaper Web sites generate are not enough to sustain robust news coverage. Though The New York Times Web site attracted 20 million unique users in October, Web-driven revenues support only an estimated 20 percent of the paper’s current staff.”

But Swensen and Schmidt continue, “By endowing our most valued sources of news we would free them from the strictures of an obsolete business model and offer them a permanent place in society, like that of America’s colleges and universities.”

At what price? A small one, they believe. “While endowed newspapers would need to refrain from endorsing candidates for public office, they would still be free to participate forcefully in the debate over issues of public importance. The loss of endorsements seems minor in the context of the opinion-heavy Web.”

I think Swensen and Schmidt are on to something, but it has a “Let’s bell the cat!” ring to it. As they say, “The news-gathering operations at The New York Times cost a little more than $200 million a year. Assuming some additional outlay for overhead, it would require an endowment of approximately $5 billion (assuming a 5 percent annual payout rate). Newspapers with smaller newsrooms would require smaller endowments.”

So, how to raise the cash? Their recommendation is this: “Enlightened philanthropists must act now or watch a vital component of American democracy fade into irrelevance.

And don’t invest the money with Bernard Madoff…