Update, 4/15, 5:15pm, The John S. and James L. Knight Foundation today announced a $1.5 million grant to the Texas Tribune. The Knight Blog hailed the Trib as “one of the most successful experiments in nonprofit online news,” and noted the grant was crafted “to build on the Tribune’s success, contribute to its long-term sustainability and to extend its approaches and lessons more broadly to other news organizations.”

AUSTIN, TX — At 10am on a Monday, what looks like all 17 editorial staffers of the Texas Tribune are crammed into a tiny, windowless conference room as editor Emily Ramshaw reviews the day’s coverage. One editor is headed out of town for a murder trial. Developments in the legislature are hashed over. And then there is the scoop.

The Tribune—three and a half years, 13 million total unique monthly visitors, and nearly $18 million after its launch as one of the country’s most high-profile experiments in not-for-profit news—is about to break a spicy story: a state legislator is being arrested in Houston. But this scoop comes with a twist. The news was actually uncovered by KHOU, a Houston television station; KHOU is sharing the story with the Tribune, which is supposed to run down the lawmaker in question and then amplify the story online to its statewide audience. Both outlets have promised investigators they will not break the news until the legislator’s law office has been raided.

No battle plan survives first contact with the enemy, and the Tribune’s original, ambitious plans have evolved since it launched in 2009 as both a news outlet about public institutions and the center of a community of engaged citizens. While CEO Evan Smith once strove to funnel his news into the big Texas newspapers, the Tribune is now becoming as much aggregator and curator as creator.

Along the way, there are some important things the Tribune has not yet accomplished. Though often billed as a “watchdog” upon its launch, the Trib has not amassed a long track record of investigative coverage. And in a state of 26 million people, its monthly audience remains small—a little less than 2 percent of the populace.

Regardless, the Tribune is positioning itself at the center of the market on serious news in the country’s second most populous state. In a world where news is still often free and traffic is king, media outlets are running with their stories to the Tribune, thanks to its reputation as not just a source of politics and policy news but a statewide news organization. And while many in Texas wondered if the Tribune would last past its first year, the organization has proven that not-for-profit news can not only survive, but thrive in ways that seem to elude larger, more established news outlets—namely, newspapers. The Tribune is here to stay. The question is: What does it become next?


* * *


Stories about the Texas Tribune—this 2010 piece from CJR included—invariably begin and end with Evan Smith, the 46-year-old CEO and editor-in-chief. Smith made his name as the editor of Texas Monthly, where he racked up mountains of National Magazine Awards before partnering with venture capitalist John Thornton to launch the Tribune. For years people would ask me, “Have you met Evan Smith?” To which I just shrugged, “No.” I encountered Smith for the first time in 2011 at the Texas Book Festival. We talked in his office afterward and again, over a year later, for this article.

We were joined by Emily Ramshaw, whom Smith plucked away from The Dallas Morning News back in 2009, and who has since risen from healthcare reporter to editor. Ramshaw, 31, fields my queries about Tribune’s journalism, while her boss—not unlike any publisher—takes the questions about the business of nonprofit news. Ramshaw’s ascension is part of an evolution in which Smith is handing over certain reins to certain people. Down the hall, April Hinkle is responsible for millions in fundraising alongside Smith. And Smith doesn’t even host all of the Tribune’s many live events anymore (more on those later). The Tribune has stopped being Evan Smith’s startup. “We’re growing up,” says Ramshaw.

As with any startup, the first task was survival; the next was stability. Based upon the numbers, it appears that the Tribune has reached both, despite launching with hands out to donors in a very rough economy. Donors once accounted for 90 percent of the Tribune’s revenues, according to Smith. Now, major foundation grants and big individual donations total just 19 and 21 percent, respectively, according to the latest Tribune figures. Another $1 million, or about 22 percent, of the annual budget comes from corporate sponsorships—online, email newsletter, and event advertising.

All told, the Tribune had revenues last year of $4.5 million and expenses of $4.3 million, mostly for the 38 full-time staff, nearly half of whom are editorial personnel. Yes, in 2012, the not-for-profit turned a sort-of profit. I suggest that it all sounds nearly too good to be true. Ramshaw acknowledges that it does kind of sound “like unicorns and rainbows.” Says Smith: “We’re in big pants mode.”


* * *


So, how did the Tribune reach this point when digital startups from Chicago to San Diego to the Bay Area have struggled or simply failed? By going where the money is—sometimes, in creative and unorthodox ways.

In Texas, where a generally conservative political culture generally mistrusts journalists, the idea of “non-partisan journalism equaled jumbo shrimp,” as Smith puts it. Still, politically active Texas residents were the natural audience for the Tribune’s output, and so the organization’s hunt for donors includes targeting politically active people appearing in the Federal Election Commission records. Smith stays busy, by his own account, flying around and talking to politically active millionaires.

Those donors haven’t always been satisfied, by the way; some conservative funders were not happy that the Tribune showcased Republican Gov. Rick Perry’s many flops, foibles, and blunders on his errant run for the White House. And they told him. (I know because they told me.) But only once, Smith says, has a big donor ever tried to influence the content—in which case he offered to refund the money. At the end of the day, keeping donors’ hands out of the content—published, live, or whatever—is really no different than asking an advertiser to respect the editorial.

Another key step in the Tribune’s path from startup to stability, though Smith doesn’t exactly agree with the way I formulate this, was its ability to deftly open up a new market: a lucrative events business that offers nearly the only game in town for Texas politicians to talk policy outside the capitol—to each other, their supporters, and even the public. On the day we spoke, Smith himself was just back from one such event in Abilene, more than 200 miles to the northwest. Unlike members of Congress, state legislators don’t have big travel or town hall meeting budgets, and the event offered a rare chance for residents there to hear a state senator and a state representative talk about education funding, Smith said. The audience at such events—along with the politicians who appear at them, donors big and small, corporate sponsors, and the roughly 550,000 visitors the Tribune site draws every month—are part of “a community,” he says. “We’re raising the level of engagement.”

The coverage that flows from that mission has its upsides and its downsides. The Tribune’s work is fast, accurate, and often insightful—the site is a wonk’s paradise, featuring granular policy coverage and a heaping of data, along with a hefty dose of horse race politics. A typical home page is blanketed with detailed stories about legislative proposals and process ranging from water policy to transportation funding. Want to know where fracking wastewater is being disposed? The Tribune’s got a map of 7,000 sites. The Trib even produces proprietary polling in partnership with two University of Texas political scientists, Jim Henson and Daron Shaw.

And while opinion is verboten, analysis is welcome. Executive Editor Ross Ramsey, for example, recently penned an analysis explaining the sources of a struggle over conservative proposals to change higher education, and the political ins and outs are revealing. Ramsey’s piece is pointed and revealing, but carefully doesn’t pick a side, let alone a partisan one.

But the Tribune has not earned its awards or reputation, to date, for hard-hitting, long investigations. Upon its launch in 2009, Smith at times raised the expectation—to be fair, urged along by eager observers, including CJR—that the Tribune would be a hybrid of policy wonk and muckraker. He told the Austin Chronicle: “Just as you wouldn’t leave [the fates of] clean air and clean water to the free market, you shouldn’t leave journalism in the public interest, the watchdog function of journalism, to the free market.”

But just how much bite this watchdog has is open to question. Bill Minutaglio, a veteran Texas journalist and a professor at the University of Texas at Austin, wrote as much in 2011 in the Texas Observer:

The Times reported early on that the Tribune was going to offer “the good-for-you, Brussels sprouts journalism—education financing, lobbying, bureaucratic priorities, civics and state government … a niche site with a very narrow focus.” It has delivered on that, and it’s also been constrained by it. There are drawbacks to the demands of providing instant online journalism aimed at insiders.

What the Tribune needs is consistent, long-ball narrative and multipart investigative projects. It needs the 5,000-word drill-downs like Sy Hersh does for The New Yorker. It needs the huge packages that win Pulitzer Prizes for ProPublica, for investigative work and public service.

In fairness, Smith said from the start that the Tribune would not be a place “where the reporters go into a windowless room for six months and try to win a Pulitzer.” In an essay published in Texas Monthly earlier this year, the faults Smith found with Texas’s papers—an inability to serve as a “true public square,” an abdication of the role of explainer and arbiter—were reverse images of the Tribune’s strengths. What’s more, the Trib’s politics coverage is often accountability-minded—“transparency” is a watchword—and the site has done quick-hit enterprise reporting and investigations. Ramshaw herself recently pegged a Houston-area Tea Party leader with ties to none other than the American Fascist Party. But blockbuster investigations “have not been our strongest suit over the years,” she concedes.

Now, she says, “I think we now have our feet under us.” In January, the Tribune rolled out a new project, “Bidness as Usual,” which focuses on potentially unsavory connections between lawmakers’ financial interests and their legislative efforts. The Trib clearly has high hopes for the effort, and seems eager to ruffle some feathers in its well-cultivated community. In a note accompanying the project’s launch, Smith invited irked officials to call him directly: “We like you, but this is business.”

Bidness As Usual is still in the early stages. In typical Tribune style, the related Ethics Explorer feature offers a lot of data, painstakingly gathered from various sources and presented in an easy-to-digest format. You can quickly learn that the top donor to Attorney General Greg Abbott, for instance, is Harold Simmons, who has contributed nearly $1 million. It’s a valuable resource and an interesting guide, especially if you know what you’re looking for. But read through the articles on the project’s landing page, and amid the discussion of ethical concerns and disclosure loopholes you’ll find only one lawmaker singled out for potential conflicts of interests so far in what amounts to the Tribune’s signature sustained investigative project.


* * *


A very short trip down the hall from Ramshaw’s standup desk, just past the coffee pots, is the office of Rodney Gibbs, the chief innovation officer. Unlike a legacy news organization, the Tribune is something of a technology company, too, in its own way. (Co-founder Thornton made his fortune in the technology business.) And the technology is, after all, where most of the Tribune’s community resides.

Nearly a third of the Tribune’s web traffic no longer comes from someone sitting at a computer; instead, it comes from mobile devices. The website has recently been reconfigured using “responsive design,” to make it run more smoothly on mobile devices. Next up is making the experience more personalized—using geo-location to allow a user to explore, say, a particular chart or data set about public schools that is automatically limited to her local district. Three years from now it will all be about mobile, Gibbs continues, and it will all be about sharing. Making information more shareable by making it “atomized,” says Gibbs, “is true to our mission.”

But some of the interesting twists in the Tribune’s trajectory relate to a more traditional type of content-sharing. At 550,000 unique users per month and 40,000 email addresses, the Tribune still seems a little light on market share, particularly in an expanding market that now numbers over 26 million people—perhaps an indicator that while the Tribune has succeeded in creating a community of politically active people, the clubhouse that doesn’t yet encompass a big segment of the public. (The Dallas Morning News may have scaled back its ambitions and news staffing from the go-go 1990s but its site still gets nearly 4 million unique users each month—though of course, the Morning News gets to cover Texas football). And while the Tribune offers its content for republication, the state’s leading newspapers, particularly the Morning News and The Austin American Statesman, have largely passed on it.

But the Trib’s coverage has been embraced by smaller outlets across the state and in second-tier markets, such as El Paso and Corpus Christi. And increasingly, content flows both ways: from television and radio outlets, like Austin’s KUT, to the Tribune, not just from the Tribune to them. The Tribune already devotes a valuable chunk of its home page real estate to the Tribwire, a compilation of links to other news organizations stories from around the state. There are also editorial partnerships, from a 2010 report with the Houston Chronicle on a “fight club” in state homes for adolescents to a brand-new niche email newsletter on water coproduced with a research center at a state university. And then there is The New York Times; the Tribune functions essentially as an outsourced Texas bureau and is on the hook, says Ramshaw, for six stories a week—including a recent one where both got the scoop on anti-abortion legislation that would limit legal abortions to as few as six or seven medical facilities, this in a state that is smaller only than Alaska.

If the Tribune’s arrival has been a prod to competition among the news organizations covering state politics, it has also signaled an era of increasing cooperation. “We hang separately,” Smith says about the current media landscape, “or survive together.”


* * *


Which brings us back to the story boiling over in Houston, the Tribune’s collaboration of the day. The raid is still either not started or still underway. “Text or call when we can publish,” Ramshaw says as the hours tick by.

Finally, in the afternoon, investigators down in the Houston area give the all-clear. The raid is over. Tribune reporter Alana Rocha pushes the button: State Rep. Ron Reynolds, a Missouri City Democrat, has got an arrest warrant with his name on it for barratry—a fancy way of saying ambulance-chasing, which, in Texas, is a third degree felony that could earn him up to 10 years in prison.

True to the terms of the arrangement with the television station, Rocha cites KHOU, not her original reporting: “According to KHOU-TV in Houston, the Montgomery County district attorney has issued arrest warrants for Reynolds and seven other Houston-area attorneys on barratry charges connected to an alleged quarter-million-dollar kickback scheme.” So far, no luck getting Reynolds to comment.

Reynolds is not exactly the biggest fish in Texas, but the piece has value. And while it may seem strange to an old newspaper reporter like me to cite a TV station in a somewhat obscure white-collar case, there’s no sense in trying to reproduce the story from scratch. Sharing information and pooling resources will make it easier for someone in El Paso, say, to learn something about the alleged ethics of a legislator in faraway Houston—without a lot of cost.

And while the revelation of the Reynolds allegations won’t exactly change Texas politics forever, the way the news was reported bucks an economic tide. Digital ad sales on news sites have been discouraging, but there’s money to be made in the hyperlocal ad market; the last estimate I saw for the Austin market—only the 13th largest city in the country—was $100 million per year. But the logic of that market, coupled with retrenchment across the news business, encourages publishers and general managers to cut back on state capital and especially Washington coverage. Think about it. How valuable is a Washington story online—especially if it’s not that different from lots of other Washington stories? But how about a story or a chart about a local school’s performance? Priceless, next to a geo-targeted ad.

There’s an editorial-side logic here too, about avoiding commodity news and paying attention to what local readers and viewers really want. Still, the trends have led—in my opinion and that of others, like Texas Observer editor Dave Mann—to a certain kind of insularity even among the big papers. They don’t really have to compete with each other because they serve local audiences with specific needs and tastes that match up with the new hyperlocal business model.

Against that backdrop, it’s not hard to imagine a future—not that far away—when the Tribune doesn’t just cover legislative hearings and create big data sets, but acts as a clearinghouse for news all over Texas—and beyond, for Texans. The Tribune gets hard news from markets outside Austin; other outlets get some traffic and high-brow validation. More people get more news, on a business model that makes sense. Ramshaw says she is interested in opening a bureau in the Rio Grande Valley, and maybe one in Washington; co-founder Thornton, now chairman, has expressed similar sentiments. But in a sense: Why bother if every other outlet is bringing its news content to the Tribune?

Well, one reason is that expectations can and should continue to rise. In that Texas Monthly piece, Smith wrote, “The technology that has been so disruptive to the economic and content models of many papers is pointing the way to a new era of, yes, quality and ambition.” Smith’s own creation is more adept with technology than most newsrooms, and the Tribune has momentum. But what Minutaglio wrote in 2011 is still true: there’s room for the Trib to set its sights higher, too.

The Tribune has found firm financial footing; mastered its own fast-paced, data-heavy approach to politics and policy coverage; and established itself as a key player in Texas’s information ecosystem. It’s been exciting to watch, even if the course wasn’t always as planned. It will be even more exciting if the Tribune now moves to expand its mission—to tackle hard-hitting investigations and big sweeping stories, and to broaden both its subject matter and its understanding of its community. Among the things to watch for:

How pointed will Bidness as Usual really be? Will there be other investigations?

What will the Tribune do about Washington coverage? Texas is one of the largest recipients of federal dollars, after all, and Texas lawmakers wield plenty of influence inside the Beltway.

Setting sights even higher—what about global coverage? No island unto itself, Texas is one of the top 20 economies in the whole world, and its global trade will only rise as the Panama Canal is widened and more shipping moves from the West Coast to the Gulf Coast.

Years ago, Lone Star Beer was dubbed “The National Beer of Texas.” Smith’s former publication, Texas Monthly, earned the nickname of “The National Magazine of Texas.” No longer consumed with survival, the Tribune could become—by original design or not—what all the big papers hoped to be back in the 1990s, until the Internet came along: “The National News of Texas,” in part because no one else is poised to do it.

Well, we’ll see.

Holly Regan contributed research to this article.

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Richard Parker is CJR's Texas correspondent. A regular contributor to the Op-Ed section of The New York Times, his columns on national and international affairs are syndicated by McClatchy-Tribune. He has also twice been appointed the visiting professional in journalism at the University of Texas at Austin. Follow him on Twitter @Richard85Parker.