Giving Compass' Take:

• Barbara Allen discusses the story of how donor, John Thornton, and a team were able to revitalize local news with the Texas Tribune.

• Why should philanthropy be involved in supporting journalism?

• Learn how place-based foundations are supporting local journalism and public media.

In 2008, John Thornton, the managing partner of a venture capital firm and an Austin philanthropist, started seeing “distressed newspaper assets” coming on the market that coincided with a small boom in news-related startups. His firm investigated – was news a new financial opportunity?

As we all know now, the answer was a definitive no.

“My team kind of closed their book and moved on, and I was left with this sinking feeling that what we were looking at was a market failure for coverage below the national level,” Thornton said. “That’s kind of what got my attention to begin with.”

He was friendly with Texas Monthly editor Evan Smith, and the two started chatting casually around Thanksgiving of 2008 about a new business model for news.

Then came an Austin ballot initiative that had to do with real estate entitlements.

“A bunch of my friends are real estate developers and it was very controversial,” Thornton said. “I remember thinking, ‘OK, I haven’t really paid attention to this, where do I go to figure out how I really feel about this?”

Thornton was surprised to find a lack of reliable coverage on the issue.

The conversations he’d been having with Smith began to take on special meaning.

“I thought, ‘You know, this is some sort of sign that that we’re on the right path here.’”

Evan Smith had no intention of co-founding a new journalism property, but he was happy to bounce ideas around with his old friend Thornton and his new friend, newsletter owner Ramsey. The three met periodically for about six months with no clear plan in mind.

Smith suggested that the coverage of politics, public policy and state government could best serve the public interest.

Read the full article about how the Texas Tribune really got started by Barbara Allen at Rivard Report.