Nonprofit Texas Tribune Launches With Budget Covered For Two Years

Monday evening as the Texas Tribune raced toward its launch this morning (some elements aren’t live yet), Editor-in-Chief Evan Smith took me through the new nonprofit journalism site — news stories, databases, blogs, a combined Twitter feed for every elected politician in Texas, the start of a Texas politics wiki. Unlike some of the new crop of local and regional news startups, the Tribune is launching with enough money for a well-paid staff of 16, including 11 reporters. (Smith alone makes $315,000; more on that below.) The vision for a nonprofit covering Texas politics, public policy and government started with John Thornton, a general partner of Austin Ventures who wanted to to put money and energy into journalism for the public good. He and his wife seeded the venture with $1 million; another $1.6 million has come in from individual donors and corporations (all identified on the site) plus $1.1 million from foundations. Not that this pace can keep up, but on the last day before launch the Tribune took in $13,000 from 190 founding “members.” Smith crows a little: “We had 1,340 founding members before we’ve published a word.” That’s at an average of $94 a person — some, like T. Boone Pickens, ponying up much larger amounts. Founders start at $50 or $25 for college students.

As important, Thornton recruited Smith, a high-profile journalist with even higher energy who kept his day job as editor of Texas Monthly well into the process. As we toured the site, Smith talked about the Tribune’s plans for events, premium content, giving content away and more. Some excerpts from that conversation below, along with a Tribune video featuring Thornton.

Making money: The Texas Tribune is free with no plans for any charges. But the Tribune isn’t relying solely on donations. It already has one premium product — the Texas Weekly, a well-respected state politics newsletter acquired earlier this year; Ross Ramsey, the editor, came with it and is the new site’s managing editor. (Ramsey and Smith are acknowledged as cofounders.) Smith says the weekly newsletter has some 1,200 subscribers at $250 a year. The goal is to grow the circulation base for more “earned income.” It’s a delicate dance. “We actually had deep conversations with exempt counsel and said, what are the things that we can do that qualify as related businesses that we can generate earned income from — because our model assumes we’ll be funded almost exclusively through philanthropy the first year and gradually transition to a model by the third year, where we’re two thirds philanthropy and a third earned income.”

That likely means premium content beyond the newsletter but also events. Comparing it to the Aspen Institute or the New Yorker Festival, Smith talks of an annual ideas festival, a weekly conversation series with elected officials at the capital, a college tour — all with corporate sponsorship. Tanya Erlach, who produced and programmed The New Yorker Festival for the past eight years, started as director of events Monday. “We think that there’s enormous amounts of money to be made on events if you’re smart enough.”

About that salary: I admitted to Smith it can be a little hard for those of us who came out of a post-1999 start-up environment to grasp the salaries being paid by the Tribune out of the gate: Smith’s $315,000, three others at six figures. The reporters make competitive wages — up to $90,000. On the other hand, unlike startups hoping for a profit, this staff isn’t trying to make money by creating something that can be sold. Smith explains: “We make no apologies for it for a couple of reasons. First of all, we are not building a teaching hospital. We’re building a major provider of health care with veteran doctors and nurses and administrators and the very best equipment and technology to provide the very best care. We hired veterans, we hired incredibly sought after and accomplished young stars; we hired newbie reporters from the very best publications very clearly set up as stars of the next generation. We said we’re going to pay everybody competitively.” Even in today’s uncertain journalism environment, getting people to join a nonprofit startup requires a leap of faith.

There is a catch: everyone is deferring part of his or her salary for two years — 15 percent for Smith and Ramsey; 10 percent for everyone else. If they leave before then, they get prorated amounts back. The budget is already covered for two years, according to Smith. It runs $1.6 million for year one, $2 million in the second year, $2.3 million in the third year.

Giving it away: Smith also said the Tribune is not a “free clinic” but it is in a way. Everything the site produces can be used by others — the databases, including every state financial disclosure statements going back 10 years, can be downloaded; the stories can be republished online or in print. “The road to success in achieving our mission is paved with ubiquity.” As for competing with for-profit news orgs, Smith veers between two perspectives: competition makes everyone sharper and the Tribune isn’t competing for attention or money. The site urges people to read their local papers and reminds readers they can’t get all their news at the Tribune.

Company at the end of the plank: What does Smith think of other startups? “When John started talking about this with me in the first of ’08, he was out on the end of the plank by himself. What’s happened since is a lot of people have come out on the end of the plank to join us. I love ProPublica. I wish I could see their stuff more. I wish there was more push of their content out to the world. I make a point of looking at both MinnPost and Voice of San Diego, which I think are both wonderful and I try very hard to learn from those guys because they’ve been doing it longer. I think Gotham Gazette is good. I think St. Louis Beacon> is good. I’m impressed by Warren Hellman’s commitment of $5 million to support the Bay Area news initiative. I think what’s going on in Chicago, which is not exactly a nonprofit but what they’re doing is creating an alternate content model … I divide them into two camps that I look to and admire. There are the pure nonprofits and then there are the ones that are for profits that are essentially augmenting or supplementing existing ones.” He added later, “Then I look at the Jim Brady thing in Washington and Allbritton — that’s obviously for profit — and they’re going to have 50 people. Good gracious! I think it’s great. Give the Washington Post competition. Why not? Everyone’s better for that.”