This week the Washington Monthly, the venerable journal of politics and ideas, turns forty.

To celebrate, they’ve put out a retrospective issue, including a fun “Bullseyes and Blunders” section, where they rate their successes and failures in calling the future. In the black-eye section: Gregg Easterbrook’s 1983 prediction that by the end of the decade many people would be getting emotional “comfort and consolation” from talking computers, or Chuck Todd’s 2004 claim that “it’s going to be Kerry in a rout.”

But one call the Monthly boasts of getting right hit a little too close to home. In 2004, Benjamin Wallace-Wells, now a writer for Rolling Stone, turned in a report predicting an imminent burst of the housing bubble, warning that “when it does, it very well may take the American economy down with it.”

According to an article by CJR.org contributor Daniel Luzer in the Columbia School of Journalism student publication The New York Review of Magazines, as the editing on the piece wrapped up, Paul Glastris, the magazine’s editor-in-chief, told Wallace-Wells: “You realize if this happens we’re in trouble?”

Glastris was alluding to the real estate fortune of Markos Kounalakis, a former Newsweek reporter who signed on as the magazine’s prime financial backer and publisher in 2002.

Like clockwork, the worst came to pass. In 2007, Sacramento, where Kounalakis’s family runs the city’s largest land development company, had the fifth highest foreclosure rate in the nation among major metropolitan areas. The magazine, which even though it pays cut-rate salaries has never been the most financially stable of outlets, even by the elastic standards of small magazines, was truly on the ropes.

As Glastris told me last year, “We didn’t know if we could keep the doors open.”

After a flirtation with Common Cause was rejected by the good government group’s board in the spring of 2008, the Monthly was still looking for a way out of the woods.

One thing the Washington Monthly has been famous for is its legion of alumni. The low pay-scale practically dictates that its young editors don’t work there for long before striking out for more high profile and higher paying gigs, a path trod by Katherine Boo, James Fallows, and Jon Meacham, among many others.

New Yorker writer Nicholas Lemann is another in the group. (He is also the dean of Columbia’s Journalism School, whose remit includes CJR.) According to Monthly editor Mariah Blake (herself a CJR alum) Lemann helped persuade his old Harvard roommate, Jeffrey Leonard, whose Global Environment Fund manages over one billion dollars of investments in renewable energy and other environmental ventures, of the magazine’s value and potential viability. In the fall of 2008, Leonard stepped up with a one million dollar matching grant, on the condition that the Monthly remake itself with a new nonprofit business model. Leonard now chairs the magazine’s board.

Blake emailed CJR to say that “the Monthly is doing better financially than at any other point in its history.” And that fact has to make this fortieth birthday all the sweeter.

CORRECTION: The post originally suggested that Lemann approached Leonard about helping the Monthly—in fact, Leonard contacted Lemann for advice on saving the magazine. And Leonard required changes to the operation’s business model, but not that the magazine become a nonprofit—a step the Monthly had taken in 2002. The text has been updated.

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Clint Hendler is the managing editor of Mother Jones, and a former deputy editor of CJR.