WHAT WE DO 2

LETTER FROM THE CHAIRMAN AND PRESIDENT 4

ESSAY: THE ROLE OF LEADERSHIP IN TRANSFORMATION 6

STORIES OF TRANSFORMATION 8

>WhenLeadersGather,theSubjectisSocialChange 10

>KnightNewsChallengeWinnersInnovateWithDigitalMedia 14

>TwoCampusesEducatethe21stCentury’sLeadersandReaders 18

>ArtsandCultureInspiretheSoul,ServingasEconomicDrivers 22

>NewcomersVolunteer,BondingaCarolinaCommunity 28

>CommittedLeadersCollaborate,LeveragingAkron’sAssets 32

PROGRAM UPDATES

>Journalism 36

>Communities 40

>National 44

GRANTS OVERVIEW 48

HOW TO APPLY 49

TRUSTEES, OFFICERS, STAFF 50

INVESTMENTS 52

ACKNOWLEDGMENTS 54

We are a national foundation with local roots. We choose, as the Knight brothers chose, to focus on journalism and communities, inspiring and Enabling them to reach their highest potential.

And we ask, as we evaluate opportunities and grants,

“Is this truly transformational?”We embrace the responsibility to discover and support ideas that can make the ideal real.

Because grant making requires a sound financial base, we preserve the Knight brothers’ gifts through prudent investment and careful management.

2 0 0 6 A N N U A L R E P O R TW H AT W E D O

Transform. Lead. Go!

WouldyouliketoseeandhearourStories of Transformation,toldinmultimedia?Andwouldyoucaretocomment?

Then … Go!

go.knightfoundation.org/annual

4A N N U A L R E P O R T 2 0 0 6 5 A N N U A L R E P O R T 2 0 0 6

geography.Itsoundssimple,andwemadeitsimpler,byeliminating most rules and qualifications in the KnightNews Challenge, our groundbreaking contest to createanopportunity for thewisdomofacrowd toemerge. Inthefirstyearofourfive-yearchallenge,wereceived1,650ideas from thinkers, activists, journalists and inventorsenergizedbyouroffertospend$5millioneachyear.Someofthewinnersaredetailedinthisreport.

Social entrepreneurship – the application of entrepre-neurial business thinking to social issues – is anincreasingly popular concept around the world. But itisn’tafad.It isasimpleandlogicalwaytosetvisionarygoals, plan for sustainability and demand performanceandaccountabilityinsocialenterprises.Weseeitaspartofourlargerefforttoidentifytransformationalleadershipandopportunities.

To that end, we funded the internationally acclaimedAshoka organization to identify and help develop a newgenerationofsocialentrepreneurs inKnightcommunit-ies. We sponsored urbanist Richard Florida to work inCharlotte, Duluth and Tallahassee with groups of“communitycatalysts”taskedwithidentifyingandbuilding“thecreativeclass.”

In Akron and Detroit, we increased our commitment tolocalleadersseekingalternative,entrepreneurialwaystotransitionfromindustrialtoinnovationeconomies.AndinthoseandotherKnightcommunitieslikeMilledgevilleandPhiladelphia,we’reworkingwithlocalexpertstowardthe

goal of universal wireless access so that residents mayenjoyandparticipateinthenewage,digitaltownsquare.

This report on our activities during 2006 details ourexcitementasweseektransformationalchangeinjournal-ismandcommunities.Thestoriesyou’llexperienceherearefoundwithadditionalpictures,soundandvideoonourwebsite,go.knightfoundation.org/annual.

Ofcourse,noneofthiswouldbepossiblewithoutasolidassetbase.Asummaryofourfinancialinformationisincludedin this report. For our full audited financial statements,pleasevisitgo.knightfoundation.org/financials.

In 2006, three new trustees joined Knight Foundation’sboard.TheyareEarlPowell,chairmanoftheprivateequityfirmTrivestPartners;E.RoeStampsIV,foundingmanagingpartnerof theprivateequityfirmSummitPartners;andPaulSteiger,managingeditorofTheWallStreetJournal.Theyareexceptionallyableandexperiencedleadersandwonderfulcontributorstoourboard.

We understand that transformation takes time, commitment and risk.Andwetakeseriouslytherareprivilegetoinvestthisfoundation’sassetstochangeourworldandourcommunitiesforthebetter.

Intheearly1970s,SecretaryofStateHenryKissingerissaid to have asked Chinese Premier Zhou Enlai for hisassessmentoftheFrenchRevolution.“Toosoontotell”wasZhou’sreportedresponse.

Perhapsit’salsotoosoontotelltheimpactofchangesthat were taking place at the beginning of the 20thcenturywhenJackandJimKnightbegantheircareers.But those times of ever-faster change set the stageand the example for how we live today. Technologyprogressed geometrically, and values were steadilymorerelativeastheworldbecamelessparochialafterWorldWarII.

Jack and Jim Knight embraced their world and the technology that made possible their vision of a futurefargreaterthantheirfirstnewspaper,theAkronBeaconJournal. Today, that concept is our beacon, our NorthStar.Theyhadthecouragetotakerisks,theknow-howtoexecute,andthetenacitytoseetheirplansthrough.Theyusedadvancesinprinting,telephonyandtransportationtobuildwhatwouldbecomeoneofthegreatnewspapercompanies in the world, at a time when newspapersdominatedmedia.

The Knights sought actively and aggressively to reflectthe communities they served. In doing so, they helpedbuild,defineandeventransformthosecommunities.Thebrothers believed strong communities would be goodfor their newspapers because newspapers, in effect,representedthewholecommunity.

Instead of fearing or resisting change, they embracedit.Weseeinthemtheinstinctsoftoday’sgreatInternetandsocialentrepreneurs.Andwebelievewehonortheirmemory,andtheirintentincreatingKnightFoundation,byactingwithvisionandcourage,andbytakingrisksintheareasofcommunityadvancementandjournalismtowhichtheydedicatedtheirworkinglives.

In2006,KnightFoundationcontinuedfundamentalshiftsinitsprogrampractice,fromprinttodigitalinjournalism,andfromcharitytosocialinvestingincommunity.Theseshifts,likeanysocialenterprise,willtaketimetomatureand for results to be understood. As Zhou understood,culturalchangeisslow.ButasKissingershowed,whenthetimeisrightandnewtechnologybecomesavailable,youmustseizetheopportunity.

Andsowedid.

Weacceleratedashift inour journalismprogramfromtraditionaleducationandtrainingprogramstoasearchfor new ways to do with digital technology what JackandJimKnightdidwithnewspapers:sharetimelynewsand information that connects people within a defined

righttoleft:

W . G E R A L D A U S T E N , M . D .ChairmanoftheBoard,

JohnS.andJamesL.KnightFoundation

A L B E R T O I B A R G Ü E NPresidentandCEO,

JohnS.andJamesL.KnightFoundation

L E T T E R F R O M

T H E C H A I R M A N A N D P R E S I D E N T go.knightfoundation.org/lettertocomment

6A N N U A L R E P O R T 2 0 0 6 7 A N N U A L R E P O R T 2 0 0 6

Fortheindividualswhomustleadwithoutapartner,thekey is to create a great team. The historian Doris KearnsGoodwinhasshownus,forexample,thatLincolnsucceededto considerable degree because he chose such strongCabinetmemberstohelphimandwillinglysought theircounsel.WhenLouGerstnerwenttotherescueofIBM,hewas wary at first of setting a vision; he put far moreemphasis upon assembling a strong team around him.Jack Welch was famous at General Electric for formingone of the strongest teams ever seen. As managementscholarJimCollinshaswritten,oneofthefirsttasksofaleaderthesedaysistogettherightpeopleonthebusintherightseats–andgetthewrongpeopleoffthebus.

Evenagreatteammayfail,however,unlesstheleadershipcreatesaspecialculturewithintheorganization–aculturethatisdedicatedtoavisionofchange.Blowingatrumpetwillbeanemptyexerciseunlesstherearelistenerswillingandreadytorespond.ThomasJeffersononcespeculatedthatthereasontheAmericanRevolutionsucceededwhiletheFrenchRevolutionslidintotyrannywasthedifferencein the quality of the followers – in America, people hadbecome accustomed to governing themselves in smallcommunitieswhileinFrance,theyhadnot.Onegroupoffollowerswaswillingandpreparedtobuildademocraticrepublic;theotherwasnot.

In today’scontext, toachieve transformation, theroleatthetopistobecomealeaderofleaders.Themosteffectiveleadersarethosewhopushresponsibilityandleadershipdown into the organization, empowering people at the

lowestlevelstobecomeleadersintheirownright.Thenyouunleash the true transformativepowerof thewholeteam.Andthatculturewillsurviveandevenflourishlongafteranindividualleaderstepsoffthestage.

America today cries out for transformation.Evenaswehaveaccumulatedmassiveeconomicandmilitarypower,wehavesquanderedmuchofourrespect in theeyesoftheworld.Hereathome,wehavedriftedbadly,failingtorenewourpublicschools,allowingglaringinequalitiestoemerge in our communities, permitting the health-caresystemtoweaken,pilingupfinancialIOUstoouryoungercitizens,andrecklesslyspoilingtheenvironment.Clearly,weneedtotransformourcultureandourcommunities.It’stimenotjustforoneorahundredbutforthousandsuponthousandsofnewleaderstostepforward,pickupthebannerandblow the trumpetofchange.MillionsofAmericansarenowlisteningandarereadytoact.

In the past three decades, David Gergen has served asWhiteHouseadvisertoPresidentsNixon,Ford,ReaganandClinton.HewaseditorofU.S.News&WorldReport in themid-1980s.He isapublicserviceprofessorofpublic lead-ership and director of the Center for Public Leadership atHarvard’sKennedySchoolofGovernment.HewrotethisforKnightFoundation.

It’s impossible to imagine the creation of India withoutMohandasGandhi’sleadership.OrtheemergenceofbiracialharmonyinafreeSouthAfricawithoutNelsonMandela.OrtherallyingoftheBritishpeopletoturnbacktheNazithreatwithoutWinstonChurchill.

Comingclosertohome,wecannotthinkofthecreationofourownrepublicwithoutrememberingGeorgeWashington,oritssurvivalwithoutrememberingAbrahamLincoln.Norcanweenvisionhowsomanyhandswouldreachouttohelpresidentsof industrialcitieswithoutJaneAddams,orhowthe civil rights movement would have succeeded withoutMartinLutherKingJr.

The lesson is clear: Strong, effective, moral leadership is critical to transformations. Longbeforea leadersteps forward,ofcourse,socialandeconomicforces may create an environment in which changebecomesmorepossible;pressuresforchangemaybuildupfromthegrassrootsoveraperiodofyears.Ultimately,however, at least one individual must take a risk, pickupabannerandblowatrumpet,callingotherstocometogetherinthepursuitofasharedvision.Thatindividualisthepersonwecallaleader,andthatleadershipgoeshandinhandwithtransformation.

We rightly salute individual leaders for their achieve-ments, andsince thedaysofancientAthens,societieshave sought better ways to prepare young people tobecome leaders. In our own time, we have learned toprize innovative and entrepreneurial leaders, whethertheyarebuildingabusinessorstartingacharterschool.Today,as in thepast, thequalityof leadershipremainsthe“Xfactor”inorganizationsandsocieties–thatextradimensionthatishardtomeasurebutthatcanmakeallthedifferenceinwhetheragroupsucceedsinitsmission.

Yetitwouldbeamistaketoseeatransformationalleaderas a singular, heroic figure atop a white horse, able towinthedayallbyhimself.AsWarrenBenniswrotesomeyearsago, theoldvisionof the lone individualbendinghistoryhasgivenwaytoanunderstandingthatleadershipismostfrequentlyexercisedwithinagroupcontext.

Often, a group succeeds because there is not one butat least two co-leaders who guide the fortunes of theorganization. Would Bill Gates have built Microsoftwithout Steve Ballmer at his side? Would Ben BradleehavetransformedTheWashingtonPostwithoutKatharineGraham?OrthinkofthesuccessoftheKnightbrothers,asJimmanagedthebusinesssideandJackworkedwiththe editors. Among the leading social entrepreneurs oftoday,fewaremoresuccessfulthanDaveLevinandMikeFeinberg in building the KIPP (Knowledge Is PowerProgram)schoolsorAlanKhazeiandMichaelBrowninbuildingCityYear.Partnersinleadershipcanbeanexcellentrecipefortransformations.

E S S A Y :

T H E R O L E O F L E A D E R S H I P I N T R A N S F O R M AT I O N go.knightfoundation.org/essaytocomment

DavidGergenaddressestheparticipantsatthe2007GatheringofLeadersinMohonk,N.Y.

8A N N U A L R E P O R T 2 0 0 6 9 A N N U A L R E P O R T 2 0 0 6

> When Leaders Gather, the Subject is Social Change 10 Meetleaderswhousetheirnetworkingopportunitiestochangetheworlda

ndthewayitcommunicatesbyfocusingonsocialproblemsinnewways.

go.knightfoundation.org/gather

Transformation requires leadership.

Leadersdiscoverthefacts.

Theyhavethevisiontoseewhat’spossible.

Theyhavethecourage oftheirconvictions.

Theyhaveorlearnknow-hownecessarytogetthingsdone.

Theyaretenacious;theydon’tgiveup.

Whenleadersapplytheseelements,whetherinseekingsystemic change orbuildinganetwork,theyareontheroadtotransformation.ThefollowingstoriesfeaturepeoplejustaspassionateabouttheirworkastheKnightbrotherswereaboutjournalismandcommunities.Thesearestoriesofpeoplewhogather togetherandvolunteer for thegreater good. They are stories of leaders who innovate and inspire,educateandcollaborate.TheyareStories of Transformation.Well-toldstories,JackKnightbelieved,helpgivepeople“anawarenessoftheirowncondition,provide inspiration for their thoughtsandrousethemtopursuetheirtrueinterests.”

> Knight News Challenge Winners Innovate With Digital Media 14 Whowilldointhe21stcenturywithdigitalmediawhattheKnightbrothers

didinthe20thcenturywiththeirnewspapers?

go.knightfoundation.org/innovate

> Two Campuses Educate the 21st Century Leaders and Readers 18 Twojournalists-turned-educatorswithbigideasaredemonstratingnews

waystoteachandappreciatequalityjournalism.

go.knightfoundation.org/educate

> Arts and Culture Inspire the Soul, Serving as Economic Drivers 22 Top-notchartsandculturalinstitutionsinKnightcommunitiesleadtheway

towarddramaticdowntowntransformations.

go.knightfoundation.org/inspire

> Newcomers Volunteer, Bonding a Carolina Community 26 BytappingthepoolofprofessionalsdrawntotheSouthCarolinacoast,

anewprograminMyrtleBeachmaybeontosomethingtransformational.

go.knightfoundation.org/volunteer

> Committed Leaders Collaborate, Leveraging Akron’s Assets 30

PartnersintheUniversityParkAlliancehaveleveragedearlyinvestmentsintoanationallyrecognizedrevitalizationbuiltonlifelonglearningandhealth.

go.knightfoundation.org/collaborate

S T O R I E S O F T R A N S F O R M AT I O N

10A N N U A L R E P O R T 2 0 0 6 11 A N N U A L R E P O R T 2 0 0 6

It’s a simple idea. Rather than rely on one leader,as essayist David Gergen warns against (see page 6), fill a room with smart,committed,entrepreneurialleadersbentonsocialchangeandseewhathappens.

“The whole is greater than the parts,” says Vanessa Kirsch, presidentandfounderofNewProfitInc.,ahubforsocialentrepreneurs.“Wecanaccomplish so much more if we leverage each other’s knowledge andexperienceandthepowerofournetworks,together,toreallycreatethekindofchangewewanttoseeinthisworld.”

That’sthenotionbehindKnightFoundation’scommitmenttoplayinghost,whether it’s for thecrowdofsocialentrepreneurshuddling inMohonk,N.Y.,eachFebruaryattheGatheringofLeaders,orFebruary’sWeMediaMiamiconference,adigitalmediamash-upofpeoplewithbigideasandtheorganizationsthatcanbankrollthem.

Andevenbyhostinga luncheonconversationwithvisionaries likestararchitectZahaHadidinMiami,weprovideawayforcitizenstoactively participate in the intellectual life of the city.

Thechainoflogic:Collectiveactionmovesideastoaction,bringsgoodideastoscale,helpsthemreachacriticalmass.Potentialtransformation.

“We Media is a term we coined a couple years ago to describe thetransformation taking place worldwide…. The shift is from mediaas an institution to media being everyone,” says Andrew Nachison,

go.knightfoundation.org/gatherforamultimediashowandcomments

When Leaders Gather, the Subject is Social Change

co-organizerof theconference.“Andtheconferencewedosurround-ing We Media is meant to spur thinking and innovation to enable

a better-informed society where everyone is media.

DespiteMiami’stropicalsetting, WeMediaiswheretheSuitsmeettheüberhip.“ItwoulddousnogoodtohaveanexecutivefromMTVsittingnexttoanexecutivefromCBSsittingnexttoanexecutivefromYouTube,allspeakingtheirexecutivetalk,”saysNachison.“It’smuchmoreinteresting,productiveandvaluabletobringpeoplewhoaren’tusedtosittingnexttoeachothertogether.>

“Wecanaccomplishsomuch moreifweleverageeachother’sknowledgeandexperience….”

VANESSA KIRSCH President,NewProfitInc.

S T O R I E S O F T R A N S F O R M AT I O N left:PanelistsCraigNewmark,founderofcraigslist,andpollsterJohnZogbycommentatWeMedia

below:MiamiHeraldradioreporterJoshuaJohnsonquestionsapanelatWeMedia

above:ReporterMylesMillerofChildren’sPressLine

coversWeMedia

below:ArchitectZahaHadidaddressesMiamiaudience

12A N N U A L R E P O R T 2 0 0 6 13 A N N U A L R E P O R T 2 0 0 6

“For us the outcome is literally outcomes,actionsthatnecessitatea pretty provocative, challenging experience for the participants. Theyactuallylookeachotherintheeye,exchangeideas,confrontdifferencesandseekopportunitiestotakeaction.”TheMohonkgatheringbeganseveralyearsagobecauseindividualsocialentrepreneurswerefrustratedbythepaceofchange.

“ThekindofleadersweworkwithatNewProfitarepassionate,tenacious,visionarypeoplewhoalsobalancetheirvisionwiththeabilitytogetresultsandaccomplishrealgoalsandhaveasenseaboutthebalancebetweenvisionanddoing,”saysKirsch.

Important things happen at the Gathering of Leaders,saysPaulaEllis,Knight’svice

president/NationalandNewInitiatives.“Theindividualswhogotherearefolks who are looking first for community, other people like them whoaretryingtochangetheworld,focusingonsolvingsocialproblemsinanewway.”

“Thisisachanceforustocometogetherandremindourselvesthatwearestrongertogether,andstrongerwhenweworktogetheronbigideas,”saysMohonkveteranEricSchwarz,presidentandco-founderofCitizenSchools.

“Knightatitsheartisaboutcommunities…buttherearecommunitiesofinterests,”saysEllis.“Inthiscase,thisisamovementwereallywanttosupportandbuild.Wethinkthatdefiningintractableissuesinadifferentwayandbringingresourcestothemisreallyimportant.Andthesefolkslooklikepeoplewhocandoit.”

go.knightfoundation.org/gatherforamultimediashowandcomments

“IthinkitisreallyimportantthatKnightFoundationis…engagedandgetsthiskindofwork,”saidJohnRice,aMohonkattendee.“Itreallyspeakstotheirleadershipandwhattheystandfor.”

“Social change is so difficult, it takes so much time, and we’re inthis for the long haul,” says Knight President Alberto Ibargüen.“This is not a fad. This is not the current trend. At the very core,

these are the people who are going to transform community.”

“…wearestrongertogether, andstrongerwhenwework togetheronbigideas.”

ERIC SCHWARZ President,CitizenSchools

“Thewholeisgreaterthantheparts.”

VANESSA KIRSCH President,NewProfitInc.

aboveandopposite:TheGatheringofLeadersatMohonk,N.Y.

belowopposite:JeanMartin,ManagingDirectorofthe

CorporateLeadershipCouncil

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Knight News Challenge WinnersInnovate with Digital Media

go.knightfoundation.org/innovateforamultimediashowandcomments

While cyberspace takes great advantage of the virtual, it overlooks a hard reality.

“Wedon’tvotevirtually,wedon’telectavirtualpresident,wedon’tpayvirtualtaxes,wedon’tdriveonvirtualroads,”saysGaryKebbel,Knight’sjournalismprogramofficer.“Ourlivesareorganizedaroundgeography…whereweliveandwork,inreallife,withrealpeoplecomingtogethertoworkoncommunityproblems.”Andweasked:Whowilldointhe21stcenturywhattheKnightbrothersdidinthe20thcenturywiththeirnewspapers?Whowillusedigitalnewsandinformationtobuildcommunity?That’stheessenceoftheKnightNewsChallenge,afive-year,$5million-per-yearcontestopentoanyone,anywherecapableofdevelopingnewwaystousenewsandinformationtoconnectpeopletorealgeographicplaces.Thebuildingblocksaregeography,digitalmediaandopensource.OrasEricNewton,Knight’svicepresident/JournalismProgram,putsit:“Nerds,newsandneighborhoods.”The initial winners are a distinct and daring group of organizationsand individuals with big ideas. They represent an arc from MIT to MTV… from an innovation incubator being built by seven female journalismeducatorstoanetworkofbloggersgeneratingaglobalconversation,withcontributionsfromGhana,FijiandTajikistan.

The News Challenge’s first-year entry pool included 1,650 applicationsseekingupto$4billion.Theycamefrompeopleasyoungas8yearsold,fromcorporationsandmajoreducationinstitutions,fromentrepreneursand mainstream media outfits. Applications for the 2007 round can besubmittedJuly1atwww.newschallenge.org.WithitsNewChallengeaward,MITiscreatingaCenterforFutureCivicMediatotestandinvestigatecivicmediainlocalcommunities.Thecenterpairs MIT’s renowned and inventive Media Lab with the ComparativeMediaStudiesProgram,whichidentifiestheculturalandsocialpotentialofmediachange.“Thisisaschoolthat’sfilledwithgeeksofdifferentsorts,”saystheMediaLab’sChrisCsikszentmihalyi.“It’saremarkableplaceintermsoffinding

alternative roles of technology that you wouldn’t see anywhere else in the world.” >

S T O R I E S O F T R A N S F O R M AT I O N

above:JournalismProgramOfficerGaryKebbel

discussesNewsChallengeentriesasKnightTrusteeJimCrutchfieldlistens

opposite:MIT’sChrisCsikszentmihalyiand

ArjunBhat(student)

above:JayRosen(center)isoneofseveralbloggerswhowillrefinehisNewsChallengeideaonlineoverthenextyear

16A N N U A L R E P O R T 2 0 0 6 17 A N N U A L R E P O R T 2 0 0 6

go.knightfoundation.org/innovateforamultimediashowandcomments

Agreatmanyoftheideasjudgedbyapanelofdigitalmediaprosaddressedthecontest’scentralopportunity.In December 2005, Geoff Dougherty founded Chi-Town Daily News, anonline newspaper written by and for Chicagoans. The Daily News usescitizenjournalism,hyperlocalnewsandmultimedia.“Iwasnoticingthattherewasarealgapinlocalcoverageandtherewerealotofneighborhoodsandissuesgoinguncovered,”hesaid.

Many took the opportunity to get young citizens engaged incommunity and democracy. MTVwill

deploymobileyouthjournalists–MYJos–acrossthe50stateswithdigitaldevices to cover the 2008 presidential election. The best of the mobilereportswillberepurposedonanMTVprogram.“Everyyoungperson,nomatterwhatissuematterstothem,cannowhavea platform to get other young people to become educated about thoseissues,toconnectandcollectivelynowtakeaction,”saysIanRowe,MTV’svicepresidentofstrategicpartnershipsandpublicaffairs.Onewinningidea,spearheadedbyDianeLynchatIthacaCollege,liftsapagefromthewebdevelopmentplaybookbyformingalearningcommunityamongjournalismeducatorsandstudentsatsevenU.S.campuses.TheInnovationIncubatorProjectpartnerswillcollaboratetocreatemodelsofparticipatorycommunitynewsproduction,makingthemwidelyavailablethrough a partnership with the Online News Association (ONA). Lynchcallstheproject“acontemporarypetridish.”Collegestudentshaveahugeadvantage,shesays.“They’redigitalnatives.Theygetit.Theyliveonline.Theyunderstandcommunity,theyunderstandsocialnetworking.Wedon’thavetoexplainittothem.”First-yearwinnerAdrianHolovaty,atage26aveteranofcreatingsuchinteractive web applications as the award-winning ChicagoCrime.org,laudsthespiritoftheNewsChallenge.“Ithinkitisagreatcontestbecauseit is an encouragement of innovation in the journalism industry … anindustrythatsorelyneedsit.”

They’redigitalnatives.“Theygetit”…

“Theyliveonline.”

DIANE LYNCH IthacaCollege

oppositetop:DianeLynchofIthacaCollegedebateswithstudents

opposite:Chi-TownDailyNewsCameramanGeoffDoughertyshotsapodcastfeaturingAndrewSeidler(left)andMikeMaguire

top:MTV’sIanRowecommentsduringapaneldiscussion

below:AdrianHolovaty

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Two Campuses Educate the 21st Century’s Leaders and Readers

S T O R I E S O F T R A N S F O R M AT I O N

“Whatwehopetobeabletodoistogivejournalistsmuch

moreconfidence….” DEANNICHOLASLEMANN

GraduateSchoolofJournalism,ColumbiaUniversity

go.knightfoundation.org/educateforamultimediashowandcomments

AtColumbiaUniversity’sprestigiousGraduateSchoolofJournalism,DeanNicholasLemannbridges thepracticeandteaching of journalism, on campus and in the field. The New Yorkerwriter is leading a high-profile effort to develop a series of real-world,multimedia case studies to teach the next generation of journalism’seditorsandproducershowtoleadinatimeofchange.

“How do you teach a student how to be an editor of a big-city daily?”he asks. “How do you teach how to cover national security or ethicalproblemsthatcomeupinnewsstories?”

The cases are emerging from some of the timeliest and most complexstoriesintoday’sheadlines.They’resetinthenewsroomsof,forexample,TheTimes-Picayune inNewOrleansduringHurricaneKatrina,orTheWashingtonPost.

“It is a much more powerful learning tool than if you brought in [PostExecutiveEditor]LenDownieandhesaid,‘letmetellyouhowIdomyjob,’”saysLemann.“You’reinsidesomethingthathappenedintherealworldofjournalismthatyoucannotgettoasajournalismstudentonthestreetsofNewYork.”

TheIvyLeagueschoolisalsooneoftheleadersoftheCarnegie-KnightInitiative, an effort to bring the best of the academy into partnershipwithjournalismeducators.AndColumbiastudentsparticipateintheNews21project,demonstrating thatyoung journalistscanproduce top-notchspecialized journalismfornewsoutlets liketheAssociatedPress,ABC,“Frontline”andTheNewYorkTimes.

The digital revolution is not for the faint of heart.

“What we hope to be able to do is to give journalists much more confidence, sotheycanlookatacomplicatedsubject,learn

some of the substance themselves, and learn how to communicate itclearly,”saysLemann.

“Ononehand,weneedtotellstoriesrapidlythroughthemedia;at thesametimepeoplewantwhatthey’vealwayswanted,andthat’smeaning,”saysEricNewton,Knight’svicepresident/JournalismProgram.“Citizenswantcontext.NickisproducingjournalistswhocandoitatColumbia.”

top:DeepaFernandesconductsan

interviewduringheron-campusradioshow

opposite:ColumbiajournalismstudentsAjaHarrisandChristineBrouwer(withcamera)coveringan

on-campusprotest

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opposite:StonyBrookNewsLiteracystudent

StevenRobertspresentinghisviews

“Qualityjournalismcan’tsurvive withoutconsumerswhocanrecognize,

appreciateandsupportit.”

HOWIE SCHNEIDER Professor StonyBrookUniversity

go.knightfoundation.org/educateforamultimediashowandcomments

SixtymileseastofthecityonLongIsland,HowieSchneider,formereditor-in-chiefofNewsday, is leading thewayasStonyBrookUniversityaddstoitsjournalismeducationmissionanotherbigexperiment:educatinganewgenerationofnewsconsumers.

Schneidersaysqualityjournalismcan’tsurvivewithoutconsumerswhocanrecognize,appreciateandsupportit.Thecourse,ultimatelyreaching10,000StonyBrookundergrads,helpsstudentsdevelopwhatSchneidercallsanewcorecompetencyforcitizensinthe21stcentury.

“IsJonStewartajournalist?IsOprahWinfreyajournalist?

What makes a journalist?” asksSchneider.“Whatmakesjournalismdifferentfromotherkindsofinformation,andhowdoyouknowwhenyouseeit?”

Thestudentshaveseizedtheopportunity.

“Idon’tthinkyoucanmakeaneducateddecisionunlessyouknowwhattheissuesare,”saysNewsLiteracystudentAdamPeck.

“Ifwecangetaneducatedconsumerpopulationthatcanrecognize the value of serious journalism, quality journalism andunderstandhowthat’sdifferentthanjunkjournalism,whetherthey’redoctorsorlawyersorteachersIthinkNewsLiteracywillbeacrucialskill,”saysSchneider.

“Thisisatimeforpeoplewhocancrossthedividefromthe20thcenturyofmassmedia,”saysNewton.“It’satimeforgreatoptimismabouttherealvaluesofjournalism,thevaluesoffairnessandaccuracyandtruthtelling.That’s what we really care about. It’s about being able to intellectuallyseparate those from all the nostalgia, and being able to take all thosegreatvalues,thatgreatcoreandhelpmoveitintothenewcentury.”

“Idon’tthinkyoucanmakeaneducateddecisionunless

youknowwhattheissuesare.”

ADAM PECK NewsLiteracyStudent StonyBrookUniversity

22A N N U A L R E P O R T 2 0 0 6 23 A N N U A L R E P O R T 2 0 0 6

go.knightfoundation.org/inspireforamultimediashowandcomments

Communities aren’t just concrete and steel, asphalt and glass.

Theycanjustaseasilybeethereal:anaria,apasdedeux,anepiphanyinagallery.Forafoundationwhosemissionistobuildcommunity,theartsprovideamosteffectiveglue.

Artmakestangiblethingsthatareintangible.Itexplainsthingsdifficultto explain. Experience tells us top-notch cultural facilities and artsorganizationscanhelpcommunitiesseethemselvesaspartofsomethingbigger.NewartsandculturalinstitutionsinseveralofKnightFoundation’s26communitiesprovidenotonlyinspirationforthesoul,butareprovingtobeeconomic catalysts in community revitalization.

Sittingsquarely inthemiddleofdowntownMiami’sdramaticconstructionboomarethetwinhallsofMiami’snewCarnivalCenterforthePerformingArts, includingthe2,200-seatJohnS.andJamesL.KnightConcertHall.SinceitsopeninginOctober2006,thecenterhasbroughttoMiamiworld-classperformers:theClevelandOrchestrainitsinitialMiamiresidency,theMerce Cunningham Dance Company, Itzhak Perlman, Chita Rivera andBroadway’sWicked.

ThedevelopmentofMiami’stwin-hallPerformingArts

Centerhasspurredamassivereinvestmentinthecity’sdowntown,featuringat

least22majorconstructionprojectsincluding13,000newresidentialunits.Localwagssaythenewstatebirdisthe

constructioncrane.

The center intends to serve and inspire Miami’s diverse population.“Three-quarters of us who live here were born someplace else,” saysKnight President Alberto Ibargüen. “Half of us were born in anothercountry.Soyoulookforwaysasafoundationwhosepurposeistobuild community, to bring people together.Whatwedecidedtodoistoinvestheavilyinsituationsliketheperformingartscenter.”

Arts and Culture Inspire the Soul, Serving as Economic Drivers

S T O R I E S O F T R A N S F O R M AT I O N oppositebottom:TheMerceCunninghamDanceCompany

bottom:TheClevelandOrchestraperformsattheKnightConcertHall

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Arts and Culture Inspire the Soul, Serving as Economic Drivers

Thecenter“putsMiamiontheworldmapintermsofculture,intermsofentertainmentandintermsofservicetoitscommunity.”

MICHAEL HARDY CarnivalCenterCEO

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go.knightfoundation.org/inspireforamultimediashowandcomments

“Thecommunityingeneralwillbenefit, theimageofthecitywillbenefit,and

NortheastOhiowillbenefit.”

MITCHELL KAHAN Director,AkronArtMuseum

InAkron,theshimmeringnewJohnS.andJamesL.KnightBuildingrisesnexttothe1899brickAkronArtMuseum.Theaddition,designedbyinternationallyrenownedViennesearchitectsCoopHimmelb(l)au,opensinJuly.

“It is an extraordinary, extravagant and innovative piecethathasalreadygainedworld attention,”saysmuseumdirectorMitchellKahan.“Anditisabeacon,literally, inthecitybecauseitlightsupatnight.”

The addition’s galleries triple the amount of space for art, adding animportant new destination to Akron’s downtown revival. The expansionhas generated new collaborations with artistic and social serviceagencies,makingthemuseumacommunityanchor.Programmingsevendaysaweekwillencouragevisitorstostaylonger.

“Thecommunityingeneralwillbenefit,theimageofthecitywillbenefit,andNortheastOhiowillbenefit,”saysKahan.“There’soneotherareathatwillbenefit,andthat’s the futureofarchitecture,becausethis isaveryimportantdesignthatwill,foryearstocome,drawarchitecturalaccoladesfromaroundtheworld.”

Charlotte, N.C.’s, already impressive downtown is undergoing anothertransformation,withconstructioncranesoneverycorner.Aculturalartscampus,includinganew,1,200-seatKnightTheater,isrisingadjacenttoanewWachoviaBanktower.A$5milliongrantsupportsthetheaterandtheoperatingendowmentforthenewculturalfacilities.InColumbus,Ga.,localleadersarebuildingona culture of success and achievementbysupportinganewcultural/touristattractionatnearbyFortBenningbydeveloping the new National Infantry Museum and Heritage Park. TheKnightChapelonthesite’sWorldWarIIStreethonorstheKnightfamily’slegacyofphilanthropyandmilitaryservice.

“Being associated with greatness,beingassociatedwiththehighestlevelofachievementinthearts…issomethingthatreflectswellonKnight,”saysIbargüen,fromavantageoverlookingtheMiamihorizon.“AndIthinkitisinkeepingwiththeaspirationsofthiscommunity.”

opposite:ExteriorviewsofthenewAkronArtMuseum

above:ArtistrenderingofTheKnightTheater,Charlotte,N.C.

bottom:InteriorofTheKnightChapel,Columbus,Ga.,attheNationalInfantryMuseumandHeritagePark

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Newcomers Volunteer,Bonding a Carolina Community

S T O R I E S O F T R A N S F O R M AT I O N

go.knightfoundation.org/volunteerforamultimediashowandcomments

“ The more you’re involved in your community, the stronger the civic fabric becomes.”

That’s Knight Foundation’s Susan Patterson talking about a bigexperiment developing along South Carolina’s Grand Strand, whereapotentialgoldmineofcivicengagementexists in thesizablepoolofretiredprofessionals,seasonalvisitorsandsecond-homeownersdrawnbygolf,sunandsand.

ThisclusterofvisitorsandretireesswellsHorryCounty’spopulationfrom250,000to1.4millionduringthepeakseason.Localleadersofthisoncerural–andpoor–SouthCarolinacountybelievethatbymoreeffectivelytappingthisreservoiroftalentforthegreatergood,transformationcantakeplace.“HorryCountyisreallyseveraldifferentworlds,”saysPatterson,Knight’sprogramdirectorforMyrtleBeach.

Connectingthoseworlds–natives,longtimeresidents,part-timesnowbirds,retirees and service-oriented college students – is the long-term goalof a Knight-funded effort in Myrtle Beach called StepUp! just gettingunderway.SaysPatterson:“Theplacewethoughtwewouldstartisvolunteerism.”>

oppositetop:SnowbirdsandvolunteersRejeanneandArtAllariestrollMyrtleBeach

oppositebottom(lefttoright):StudentsClaudiaBarrientosandDayanaRodriguesworkwithXXXXXXXX

aboveandleft:TheMeeseFamily(Leigh,Davidand3-year-oldAllan)volunteertohelpoutMyrtleBeachresidentRosemarieKnight

“…nonprofitagenciesareouttheremakingadifference.”

VALERIE HARRINGTON Director,StepUp!

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go.knightfoundation.org/volunteerforamultimediashowandcomments

“Do these folks with a lot of experience, expertise and creativity intheir own way continue to participate, or do they just retire to thegolfcourse?”asksPatterson.“Ourthinkingisthatthemoreyou’reinvolvedin your community, the stronger the civic fabric becomes. Increasingengagementcouldandlikelywilltransformthecommunity.”

Knight funding to Coastal Carolina University helped launch StepUp!a coordinated effort to connect volunteers to organizations thatprovideservices.“We,thepeoplewholivehere24/7,knowhowfantasticthiscommunityisandhowmanynonprofitagenciesareouttheremakingadifference,”saysStepUp!directorValerieHarrington.“Myfavoritepartofthisjobisconnectingpeopletothoseagencies.”

StepUp! targets four categories of potential volunteers: young people18 and under, newcomers, snowbirds and residents 50 and older. Theprogram’s television and radio public service ads have generated adramaticincreaseincallsfromnewcomers.

“Our earlier surveys indicated that it was taking five to seven yearsfor newcomers to feel connected to community,” says Harrington.

“Now we’re hearing from newcomers who say ‘tell me more about how I can volunteer.’”

Thearea’snonprofitorganizationsseethebenefittotheirworkandmission.ChristineEllisofWaccamawRiverkeeperheadedarecentcleanupeffort.

“Especiallywhenanewpersonjoinsourteam,theysay,‘Ineverrealizedthere was so much trash, but so much potential for impact associatedwithourgrowthandurbanization,’”saysEllis.“Theseeffortsaregoodeducationandpromotionforourmission.”

ArtAllerie,aretiredengineerfromOttawa,Ontario,hasreturnedtoMyrtleBeacheachyearsince1999withhiswife,Rejeanne.Hebeganvolunteeringbyservingmealstoneedyfamiliesattheholidays.“You feel better that you did something for somebody,” he says.“EvenifI’mnotbackhome,I’mreturningsomethingtothelocalcommunity.Itmakesmefeelgood.”

“…somuchpotentialforimpact…”

CHRISTINE ELLIS WaccamawRiverkeeper

“Now we’re hearing from newcomers who say ‘tell me more about how I can volunteer.’”

left:AnnaMerrymanhelpsplantatree

bottom:KevinKernassistsintheclean-upofthe

localstatepark

oppositecenter:CynthiaDyerandRickRickenbaker

oftheWaccamawRiverkeeper

oppositecenter:CynthiaDyerandHampShuping

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Committed Leaders Collaborate,Leveraging Akron’s Assets

S T O R I E S O F T R A N S F O R M AT I O N

go.knightfoundation.org/collaborateforamultimediashowandcomments

“…Ithinkwehavethemakings tocompletelyreinventtheimage

ofthatentirepartofourcity.”

DON PLUSQUELLIC Mayor,CityofAkron

“…itistransformational–itis anopportunitytohaveatrue

impactontheircommunity.”

DR. LUIS PROENZA President,UniversityofAkron

“ It wasn’t a place that people took pride in,”saysUniversityofAkronPresidentLuisProenza.

He’s talking about University Park, a downtown Akron neighborhood of11,500 mostly low-income residents and blighted housing for some oftheschool’s24,000students.

But like other urban centers in decline at the beginning of the newcentury,Akronhadanchorinstitutionsliketheuniversityanditshospital,SummaHealthSystems.Andtherewasanother,largelyunalignedresourceintown.

“You…havesomevery,verystrategicthinkers,boldleaders,peoplewhoaren’tafraidtotakerisks,”saysKenStapleton,executivedirectoroftheUniversityParkAlliance,whichbegan in2000withabold idea tobringthose leaders together to takechargeof thecommunity’s revitalizationwithseedfundingfromKnightFoundation.

Throughthealliance,Proenzajoinedforceswithotherleaders–Akron’s20-yearmayor,DonPlusquellic;ThomasStrauss,headofSumma;thelocalchamberofcommerce,theschoolboard,thehousingauthority.Agrassroots-upplantookshapetoinvolvethecommunityintheredevelopmentofthe40-square-blockneighborhoodaroundthetwinthemesoflifelonghealthandlifelonglearning.

“What we didn’t see was this beautiful flowering plant that wasgrowingandprospering,sendingoutyoungpeople thatwereeducated,andweweren’treallymaximizingourabilitytoattracttopyoungpeoplebecauseoftheconditionofthehousing,”saidPlusquellic.

With almost $3 million from Knight, the alliance’s initial collectiveefforts leveraged public-private investments of some $150 millionin campus improvements, new infrastructure and neighborhoodredevelopment. Now, in a new round with investments including$10millionfromKnight,thealliesenvisioncontinuedrevitalizationoftheneighborhood to attract and keep talent and provide housing for

a population intent on leading healthy, educated lives.

left(lefttoright):UniversityofAkronPresident,Dr.LuisProenza,SummaHealthSystems’ChiefOperatingOfficerTomStrauss,AkronMayorDonPlusquellic,UniversityParkAllianceExecutiveDirectorKenStapleton,andKnightFoundations’AkronProgramOfficerVivianNeal

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go.knightfoundation.org/collaborateforamultimediashowandcomments

Public and private sector investments are approaching $500 million,bringingnewgreenspace,expansionofuniversityfacilities,500affordable,mixed-incomehousingunits foruniversityandhospitalemployees,newbusinessesincludingspacesforartiststoliveandwork,allattractingupto1,000newjobs.SaysProenza:“Weare impressedthatdevelopershavecometousandexpressedanexcitementthatsayswe’dratherbeinvolvedinthiskindofactivitythananyother.’They’reexcitedbecauseitistransformational–itisanopportunitytohaveatrueimpactontheircommunity.”

New partnerships are developing. The university started a tutoringprogramatnearbyLeggettElementarywithmorethan200collegestudentsshowingupeachsemestertohelpout.Andtheuniversity’snewStudentRecreationandWellnessCenterisopentoneighborhoodresidents.

MayorPlusquellic:“With a vision and a strong commitment to leadership, whichIthinkthispartnership,withthesupportofKnightFoundationhasdone,andthemoneythecityhascommitted…Ithinkwehavethemakingstocompletelyreinventtheimageofthatentirepartofourcity.”

“OnedayI’llseemygrandchildrenwalkintotheUniversityofAkron.Iwillbe inoneof thosemixedhousing townhomes,walking to thestadium,walkingtoretailandstillhavinglifelonglearningactivities,”saidVivianCelesteNeal,Knight’sAkronprogramdirector.“I’llbeabletodoallmylapswimming,exercising,allrightthere,thenifIwanttotakeacourse,I’monthecollegecampus.It’sawayforeverybodytowin.”

“…boldleaders,peoplewhoaren’tafraidtotakerisks.”

KEN STAPLETON ExecutiveDirector,UniversityParkAlliance

above:KenStapletonvisitslongtimeAkronresidentEthylChambers

opposite:FanscheertheUniversityofAkronbasketballteam

oppositebottom:PolymerresearchconductedatUniversityofAkronisimportanttothecity’sfuture

below:NeighborhoodresidentstakeadvantageofthenewUniversityofAkronStudentRecreationandWellnessCenter

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F E B R U A R Y

BackedbyapollthatshowsAmericansbelieveacademicsshouldbecollegeathletes’toppriority,theKnight Commission on Intercollegiate AthleticshostsitsfirstSummitontheCollegiateAthleteExperienceinWashington,D.C.Below,ScottieReynolds,nowafreshmanguardfortheVillanovamen’sbasketballteam(left)andformerNotreDameMVPRuthRileyoftheWNBA’sDetroitShockspokeatthesummit.

Upto3,000childrenintheTwinCitieshopetobenefitthroughimproveddentalhealthfroma$1.1milliongranttoGreaterTwinCitiesUnitedWaythroughBright SmilesandthePartnership for Improving Children’s Oral Health.

CommunityjournalismpractitionersgatherinAnniston,Ala.,foranationalsummitcoincidingwiththelaunchofthenewKnight Community Journalism Fellows Program.TheUniversityofAlabamamastersprogramusestheresourcesofTheAnnistonStarasateachingnewspaper.

J A N U A R Y

The Immigration Funders Network,agroupofnationalfundersinterestedintheimpactofimmigrationonchildrenandfamilies,gathersinMiami.Above,IsmaelAhmed,executivedirectoroftheArabCommunityCenterforEconomicandSocialServices(ACCESS),aKnightgranteeinDearborn,Mich.,speaksatthegathering.

The Reporters Committee for Freedom of the Pressreceivesa$2.5millionchallengegrant.TheReportersCommitteeprovideslegaldefenseandadvocacyservicestojournalistsworkingintheUnitedStates.

TheKnightGrandJuryPrizesareannouncedtohonorthetopfilmmakersintheMiami International Film Festival,withcashawardshonoringtopworkindramaticfeaturesanddocumentaryfilms.

2006Milestones

News in a New America,authorSallyLehrman’sthought-provokinganalysisofthediversityofAmericannewscoverageandnewsrooms,debuts.

MAJOR GRANTS FROM 2006 AND EARLY 2007

>TheKnightNewsChallengeisawarding$12milliontocommunity news experiments worldwide. RecipientsincludeMIT,oneofthenation’stoptechnologyschools,whichwilldevelopanewgenerationofnewsdevices;andMTV, a top American television network that will usehand-helddevicestocoveranddistributenewsaboutthe2008 presidential campaign. In addition, one of thecountry’stopyoungnewspaperprogrammerswillusehismillion-dollar prize to develop “mash-ups” in a dozenAmerican cities allowing citizens to find all the publicinformation that’s online about themselves, sorted byaddress.(seepage14).

> NewsUniversity,ouronline journalismtrainingprojectat the Poynter Institute, now has 40,000 journalists andstudentsenrolled for itsmorethan50classes,making itthelargestprojectevertoteachandtrainjournalistsonline.“ThankGodforNewsU,”saidajournalistfromKenya.“Thisisthebesttrainingourbureauhaseverhad.”

>In2006,anewgrantaddedanewwebsite–theKnightCitizenNewsNetwork–aplacewherecitizenjournalistsare carrying on a “conversation” about the values andethics of journalism. KCNN (www.kcnn.org) is producedbyJ-Lab,whichispartofthenewKnightInstitutefortheFutureofJournalismattheUniversityofMaryland.

> Teams of top newspaper editors and their web sitegurus gathered at the inaugural leadership seminar oftheKnightNewMediaCenter,hostedattheUniversityofSouthernCalifornia.Theeditors, fromcitieslikeAtlanta,Austin, Boston, Des Moines and Miami, used the timeandadvice fromtechnologists, trainersandnewproductspecialists to make concrete plans for reinventing theirnewsrooms to be 24/7 operations, creating things like“web-firstpublication”and“continuousnewsdesks.”

> We Media Miami brought 300 online journalists,entrepreneurs,communicationsthinkers,socialphiloso-phers and interested individuals to the University ofMiamiforadiscussionofhow“connectedsocieties”canandshouldfunction(seepage10).There,weannouncedthatthefoundation’snetworkofendowedchairs,alreadythe nation’s largest, had reached 22, with the creationof the Knight Center for International Media at theUniversity of Miami, home to two Knight Chairs inJournalism, one focusing on visual media, the other oncross-cultural communication. (Earlier in the year, weannouncedthecreationoftheKnightChairinScholasticJournalismatKentState.)KnightChairs,alreadyteachingthousands of students, are beginning to dramaticallyincrease their professional outreach through their owndynamicwebsites.>

When the Knight brothers owned newspapers, inthewordsofJackKnight,theyworkedto“bestirthepeopleintoanawarenessoftheirowncondition,provideinspirationfortheirthoughtsandrousethemtopursuetheirtrueinterests.”

Today,astunningarrayofhand-helddevicesisturninglifeintoaguidedtour.Butthequestionremains:Whoaretheguides?Whodigsforthefactsandstickstothefactsthatrouseustopursueourtrueinterests?

Thosewouldbejournalists,saysKnightFoundationTrusteePaulSteiger,TheWallStreetJournal’smanagingeditor.

“Evenwiththeincrediblesearchabilitiesthatexistonthewebtoday,itisdifficulttofindareliableandcomprehensiveanalysisofacomplicatedissue,”SteigerwritesinaneditionoftheNiemanReportsentitled“GoodbyeGuttenberg.”

“Thecapacitytosearchwon’tsatisfyhumanity’squestforknowledge if thecontentavailable isn’t informedby therigor of inquiry that resides at the core of journalism’sstandardsandethics.”

Almost everything about journalism is changing, fromwhoprovidesthenewstowhatformit takes, fromhow it isdelivered to thenewactivist roleof thepeopleformerlyknownas theaudience.Butoneelementcan’tchange:thefair,accurate,contextualsearchforthetruth.

KnightFoundation’sgrantshelp teach the journalistsoftodayandtomorrowhowtotransformnewsroomstodointhe21stcenturywhatJackandJimKnight’snewspapersdid in the 20th. We help press freedom and freedom ofinformationgrowworldwidebydemonstrating thevalueofgood journalismastheoxygenofdemocracy.Andwehelpcreatenewformsofnewsinthepublicinterest,thenewsallcitizensneedtobegoodcitizens.

P R O G R A M U P D AT E : J O U R N A L I S M

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MilestonesA P R I LM A R C H

MiddleschoolstudentDasyllekaBrownspentanApril2006weekendplantingagardenatAlcorn Middle School in Columbia, S.C.SheandherclassmatesplantedthegardentobenefittheEauClaireneighborhood.

Grassrootsorganizationsget$170,000fromtheAmerican Dream FundtohelpimmigrantcommunitiesparticipateinrebuildingeffortsinBiloxi,Miss.,afterHurricaneKatrina.

AsSunshine Week 2006opens,anewpollsaysmorethansixin10Americansbelievethat“publicaccesstogovernmentrecordsiscriticaltothefunctioningofgoodgovernment.”Ben SargentoftheAustinAmerican-StatesmanjoinedscoresofhiseditorialcartoonistcolleaguesinproducingSunshineWeekcommentaries.

J O U R N A L I S M P R O G R A M S

>Ahighschoolcampaignto teachtheFirstAmendmentlaunched in early 2007 with new partner Channel One,whichreachessome7millionsecondaryschoolstudents.The“1Voice”campaignfeatureslessonplansandPSAsthataddtothenetwork’snormalcoverageofFirstAmendmentissues.Thisprojecthasresultedinasubstantialincrease– from50 to70percent–ofstudents reporting theyarereceivingFirstAmendmentteachinginatleastoneclass.StudentsthemselvesdidthePSAs.

> On the college level, a major new grant to the StonyBrook campus of the New York state university systemwill make possible the nation’s first collegewide classin News Literacy (see page 20). Some 10,000 studentswilltakethecourseoverthenextfouryears.Thehopeisthatthiscoursewillmakethesestudentswiser,smarterconsumersofnews–andthattheimpactwillresultinthecoursespreadingtootheruniversitiesnationwide.

These current, and varied, programs foreshadow our work ahead.Therearemanyothers,toomanytodetailhere–butyoucanfindthemonourwebsite(www.knightfdn.org).LikeAmerica’snewspapers,weare learning how to operate complementary print andonline editions. In our increasing web presence, we willseek, as the Journal’s Steiger does, to provide whatjournalistsdobest:“Compellingnarratives,investigations,explanations,trend-spotters,context,exclusiveinterviews…‘scoopsoffact’and‘scoopsofideas.’”

Inthecomingyear,forexample,theKnightNewsChallengewinnersandourleadinggranteesandKnightalumniwillbringtheirfactsandideasintoonlineconversationsaimedatexploringhowgreatjournalismcansurviveandthriveinthiscentury.Wehopetoseeyouthere.

>TheCarnegie-KnightInitiativefortheFutureofJournalismEducation, including leading deans like Columbia’s NickLemann(seepage18),oversawthefirstyearofitsNews21project,wheretopstudentsfromkeyjournalismschoolsdemonstrated that they could do investigative stories ona complex subject (Homeland Security and Liberty) thatwould be good enough to be picked up by the nation’sleadingnewsorganizations–fromForbestoCNNtoTheNew York Times and the Associated Press. And at thesametime,thestudentsalsodeliveredthosesamestoriesdirectlytothepublicontheanniversaryofthe9/11terroristattacksthroughinnovativewebsites.

> Knight Foundation concluded a four-year NewsroomTraining Initiative, reaching some 50,000 journalists andhelping encourage a third of the nation’s newsrooms toincreasetheirtrainingbudgets.OurTomorrow’sWorkforceproject at Northwestern University co-published andlaunched News Improved, a book explaining the lessonsofthatinitiative:Newsroomscanadaptiftheyembarkonprogramsofstrategictraining.

>SunshineWeek2007wasanextraordinarysuccess.Anestimated50millionAmericanswerereachedwithstoriesofhowcitizensusefreedomofinformationlawstogetwhattheyneedtoknowfromtheirgovernment.Morethan2,000newsstories,cartoons,columnsandeditorials,morethan2,000 blog entries, more than 1,000 television and radiopublicserviceannouncementsappeared.Thiscampaign,coordinatedbytheAmericanSocietyofNewspaperEditors,involveddozensofgroups,fromtheRadioandTelevisionNews Directors Association to the League of WomenVoters.SunshineWeekwasendowedin2006witha$3.4millionchallengegranttocreateaKnightFirstAmendmentFund. Sunshine Week is important because more than600 laws nationwide have been approved since the 9/11attackstorestrictpublicinformation.Thisyear,anationalsurvey showed that 70 percent of the public believes itsgovernmenthasbecometoosecretive.Inaddition,thefirstKnightOpenGovernmentSurveyrevealedthat80percentoffederalgovernmentagencieswerenotobeyingthe10-year-oldelectronicFreedomofInformationAct.

P R O G R A M U P D AT E : J O U R N A L I S M

J-Labannounces10newsexperimentsinthe New Voices campaign,whichrecognizestheneedtoservecommunitieswithhyperlocalinformationandcutting-edgetechnology.

News Universitycelebratesitsfirstanniversary.Byyear’send,nearly40,000usershadregisteredatthesite,makingittheleadingonlinelearningdestinationofjournalistsworldwide.

InaspeechbeforetheAmerican Society of Newspaper EditorsinSeattle,HarvardUniversity’sKnightVisitingLecturerJohn Carrollsaysthenewspaperindustryshouldseekoutnewownershipmodels,andcallsoneditorstobeboldandhelprestorenewspapers’valueandmeaning.

go.knightfoundation.org/journalism2006tocomment

Knight Ridder, the company founded by Jack and Jim Knight, is sold to McClatchy Co.Theirprivatefoundationremainscommittedtosupportingjournalismandfreespeech,andtobuildingstrongcommunitiesinthecitiesandtownswheretheKnightbrothersoperatednewspapers.

Malcolm MoranisnamedtheKnightChairinSportsJournalismandSocietyattheCollegeofCommunicationsatPennsylvaniaStateUniversity.

TheWesternKnightCenterattheUniversityofSouthernCaliforniaandtheUniversityofCalifornia-BerkeleybecomestheKnight New Media CentertohelpAmerica’sjournalistsadapttorapidchange,andtoadvancenewsvaluesinthedigitalage.

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MilestonesM A Y

R. Gerald TurnerandClifton R. Wharton Jr.arenamedco-chairmenoftheKnightCommissiononIntercollegiateAthletics.

TOWARD STRONGER REGIONAL ECONOMIES

TwokeyKnightcommunities–AkronandDetroit–haveconcluded that regional economic development is theirbest strategy for growing beyond their manufacturingpast. The foundation is participating in large regionalinitiatives inNortheastOhioandSoutheastMichiganledbyphilanthropiccollaboratives.

Both are born out of a rock-hard realization that deepchange is needed. As Detroit Mayor Kwame Kilpatricksays,“Detroitwilleithertransformordie.”

Thedefiningcharacteristicofbothisaimingtochangethenatureofeachregionaleconomyovertime,movingfromtraditionalmanufacturingtoknowledge-basedinnovation.

Since2004,TheFundforourEconomicFuturehasfocusedon Akron, Cleveland and 16 counties of Northeast Ohio.In the first phase, backed by $30 million from 85 of theregion’sentitiesincludingKnight,theFundhasengagedmorethan20,000citizensindefiningeconomicpriorities;successfully developed and tested a model including adashboardofeconomicindicators;andmadegrantsof$18milliontofueljobs,trainingandcollaboration.Knighthas

contributed$2milliontotheoverall$35millionneededforthesecondphase.

AnexampleofoneoftheFund’sgranteesisBioEnterprise,abusiness,recruitmentandaccelerationinitiativedesignedtofosterthegrowthoftheregion’sbiosciencecompanies.BioEnterprisehas11clientcompaniesinSummitCountyemploying320people.Thefirmshaveadded90newjobsinthepastyearandhaveattractedmorethan$15millionininvestmentfinancing.

OtherregionsacrossthenationlooktotheFund’splaybookforinspiration,includingSoutheastMichigan.There,Knight’scommitment of $10 million joins other funders includ-ing The Ford, Kellogg, Skillman, and Hudson-WebberfoundationsandtheCommunityFoundationofSoutheastMichiganintheNewEconomyInitiative,apotentially$100million commitment to speed the seven-county region’stransformation to a knowledge-based, entrepreneurial,creative economy. The initiative will follow an economicgrowth strategy developed by Detroit Renaissance, theleadingregionalCEOorganization.Thecollaboratorswillfundeffortstomovefromacultureofentitlementtooneoflifelonglearningandentrepreneurship.>

TheOnline Journalism Awards addtheKnight Award for Public Service,a$5,000awardrecognizingtheuseofdigitaltechniquesandpublicinformationtoproducecompellingjournalisticcoverageandengageageographiccommunity.

The 26 places we call the Knight communities couldn’t be more different. Our workdays begin with an Atlantic sunrise on MyrtleBeach’sGrandStrandandendas thesunslips into thePacificoffLongBeach.TheprairietableausofAberdeenand Grand Forks are far removed from the teemingdowntownsidewalksofDetroitandMiami.TheviewfromaPhiladelphiaoffice towercanbe justas impressiveasBoulder’sRockyMountainvista.

These cities and towns are a random collection exceptwhen clustered serendipitously as the 26 places whereJack and Jim Knight, 20th century newspaper owners,demonstratedtheirpassionforcommunity.

Intheirbusinessapproach,theKnightbrothersrespectedthe uniqueness of each community. Each has a distinctnarrative,astoryinextricablytiedtopeopleandgeography,tohistoryandeconomy,tocultureandleadership.Throughthe foundation’s Communities Program, the founders’

philanthropicinterestsplayoutasanopportunityforeachlocale to identify trendsandbig ideasthatcould leadtotransformationalchange.

Knight Foundation’s broad funding interests seek toimprovethevitalityofcommunitylifethroughgrantsandinvestmentsaddressingchildrenandfamilies,education,civicengagement,housingandcommunitydevelopment,economicdevelopment,andartsandculture.

Inourcurrenteffortsandintheworkahead,thefoundation’sgrant dollars and other resources are helping leadersdevelop powerful ideas to deal with real issues. KnightFoundation’scommunity-basedprogramdirectorsarethefirstpointofcontactforconversationsaboutthoseideas(visitwww.knightfdn.org,andreadmoreinHowtoApplyonpage49).

Searching for potentially transformational ideas takesleadership, bold partners willing to buy in and acceptrisks, and time to let ideas develop until they arrive ata tipping point. A sampling of projects and initiativesunderwayinKnightcommunitiesthrough2006andearly2007demonstratesthepowerofcollectiveactionforthegreatergood:

C O M M U N I T I E S P R O G R A M S

J U N E

NewtrusteesatKnight:SouthFlorida-basedfinanciersEarl W. Powell,chairmanandCEOofTrivestPartnersL.P.;E. Roe Stamps IV,foundingmanagingpartnerofSummitPartnersinBoston;andPaul Steiger,vicepresidentofDowJones&Co.andmanagingeditorofTheWallStreetJournal.

KnightFoundationreaches$1 billion in total grantssinceitsinceptionin1950.

A$1.25milliongranttotheColumbia UniversityGraduateSchoolofJournalismestablishestheKnight Case Studies Initiativetopromotejournalismleadership.

P R O G R A M U P D AT E : C O M M U N I T I E S

Julie Tarr,whohasservedasprogramdirectorforPhiladelphiaandStateCollege,isnamedevaluationdirectorofthefoundation.

KnightprogramstaffandexecutivesvisitCambridge,Mass.,totakepartinaseriesofworkshopsorganizedbyNew Profit Inc.,focusingonsocialentrepreneurship.

KnightpartnerswithLiving CitiesandtheMississippi Development AuthoritytohelprebuildtheHurricaneKatrina-batteredEastBiloxi,thecity’soldestandmostculturallydiverseneighborhood.A$250,000grantfundsanEastBiloxiactionplanandrevitalizationstrategy.

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MilestonesJ U L Y A U G U S T

Fourgrassrootsorganizationsreceive$200,000inanefforttohelpimmigrantintegrationeffortsinGeorgiaandAkron, Ohio.

Buildingonitsnationallyrecognizedscholasticjournalismprogram,Kent StateUniversitybecomeshometoanewKnight Chair in Scholastic Journalismwiththehelpofa$2milliongrant.

supportingtherenovationofamuseumhonoringitsmostfamousson.Whencompletedwithhelpfroma$500,000Knight grant, the Ben Franklin Underground Museumintendstobeonparwiththebestbiographicalmuseumsintheworld.

CIVIC ENGAGEMENT

Miami,Florida’scommunitynarrativeisdiversity.Three-quarters of us who live in Knight Foundation’s homecommunity were born someplace else; half of us wereborninanothercountry.

We’vebeguntoidentifyandsupportwaystogrowanewgeneration of multicultural leaders, especially in thenonprofit sector, to serve Miami’s diverse populationsin the future. Knight has provided recent support of $1millionfortheMiamiFellows,anoutstandingleadershipdevelopmentprogramthathasassembledfourclassesofyoungprofessionals.Theprogramexposesthemovertwoyearstotoplocalleadersandcommunityissues,helpingthemprepare for leadership in thebusiness,publicandprivate sectors. Knight’s grant will help the programbecomeself-sustaining.

HOUSING AND COMMUNITY DEVELOPMENT

St. Paul Mayor Chris Coleman has urged his residentstothinkbig,to joininbecoming“themostlivablecity inAmerica.”Manyresidentsappreciatelivinginthisbigcitywithasmall-townfeel,yetaremindfulthatallresidentsregardlessofincomeorstatusshouldenjoyandshareinitsgenerallyhighqualityoflife.

Since2003,KnightFoundationhasbeenakeypartner inPayne-Lake Community Partners, a comprehensive andintegratedapproachtohousingandcommunitydevelopmenttargetingthecity’sdiverseEastSideaswellasLakeStreetin Minneapolis. The public/private partnership is knittingtogethersmallbusinessdevelopment,workforcedevelopmentandaffordablehousingtobuildmixed-income,multiculturalcommunitiesthatwork.Akeylessoncomingoutofthisworkistheimportanceofengagingthecommunityandembracing the diverse cultures that live and conductbusinessalongthecorridor.

Ifyouthinkyoucancontributea big ideaoridentifyanopportunity likethese inthenextstageofourworkinthe26Knightcommunities,findouthowin“HowtoApply,”onpage49.

OPPORTUNITY FOR CHILDREN AND FAMILIES

Wichita,Ka.,istheAirCapitaloftheWorld,where70percentofthenation’sgeneralaviationaircraftareproduced.Thestate’slargestcitytakesprideinitsMidwesternworkethic,itsqualityoflife,itsaffordabilityanditseasycommutes.

Butaprojectedshortageofskilledworkersandengineersthreatens the technical base that is the foundation ofWichita’smanufacturingeconomyandone-fifthofthecity’sjobs. Ensuring that today’s young people have the skillsthey need to be successful in Wichita’s economy is achallengeandanopportunityforKnightFoundation.

Communityleadershavecommittedtoscalinguppromisingapproaches to early childhood education and closingthe achievement gap. Knight has joined in funding TheOpportunity Project, a potential model for a statewideuniversal pre-kindergarten program that teaches socialand emotional learning skills to 80 percent of the city’s3- and 4-year-olds attending public and private earlylearningcenters.

THE POWER OF ARTS AND CULTURE – AND TOURISM

InadditiontoMiami’sKnightConcertHallandthestunningadditiontotheAkronArtMuseum(seepage18),twoothercan-doKnightcommunitiesrecognizethattheartshelpdrivetheeconomy.

Charlotte,N.C.’s,alreadyimpressivedowntownisundergoinganother construction boom. A cultural arts campus isrising adjacent to a new Wachovia Bank tower, includinga 1,200-seat Knight Theater. A $5 million grant supportstheaterandtheoperatingendowmentforthenewculturalfacilities. In Columbus, Ga., local leaders are building ona culture of success and achievement by supporting anew cultural/tourist attraction at nearby Fort Benning bydevelopingthenewNationalInfantryMuseumandHeritagePark.TheKnightChapelonthesite’sWorldWarIIStreethonors the Knight family’s legacy of philanthropy andmilitaryservice.

AndisPhiladelphiatheNextGreatAmericanCity?Phillyis a walkable, manageable big city with great collegesand a thriving downtown. Leaders there are engagedin a long-range plan to transform the city into aninternationally competitive tourist destination by betterusing Philadelphia’s rich historic and cultural assets.Knight is joining the effort to grow heritage tourism by

C O M M U N I T I E S P R O G R A M S

Paula Lynn Ellis isnamedtoanewpositionofVicePresident/NationalandNewInitiatives.

S E P T E M B E R

AttheNationalPressClubinWashington,D.C.,thefoundationlaunchestheKnight News Challenge,acontestopentoanyone,anywhereusingdigitaltechnologytoconnectpeopleintherealworld.Upto$25millionwillfundtheexperimentsoverthenextfiveyears.

C O M M U N I T I E S P R O G R A M SP R O G R A M U P D AT E : C O M M U N I T I E S

InLexington,Ky.,threegirlsconsultduringacompetitionfortheCountywide Academic Challenge Superintendent’s Cup,organizedbyKnightgranteesOne Community, One VoiceandtheFayette County Public Schools.

go.knightfoundation.org/communities2006tocomment

Miami’snewstate-of-the-artperformingartscenterunveilsanewnameforoneofitstwomainvenues:the2,200-seatJohn S. and James L. Knight Concert Hall.

Top-notchinvestigativejournalismappearsinTheNewYorkTimes,onFrontlineandelsewhere,producedbyacadreofNews 21 fellows–graduatestudentsfromrespecteduniversitiesworkingonaprojectaimingtotransformthewaythenation’stopjournalismschoolsteachthecraft.

Global Voices Onlinewinsthe$10,000grandprizeintheKnight-Batten Innovations Awards.Thewebsiteconnectsbloggersfrom130countriestoreadersaroundtheworld

KnighttrusteesandstafftraveltoDetroitforaboardmeetingandsitevisitstothecity’sriverfrontanddowntownneighborhoodsandforconversationswithlocalleaders.

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MilestonesO C T O B E R D E C E M B E R

TheUniversity of Marylandannouncesitwillnameitsnewstate-of-the-artjournalismbuildingJohnS.andJamesL.KnightHall,thefuturehomeoftheMerrillCollegeofJournalismandanumberofKnight-fundedprograms.

Arts United of Greater Fort Waynereceives$750,000overthreeyearstohelpdiversenonprofitgroupsdevelop,produceandpresentartsandculturalactivitiesforthe“NewHoosiers”–theimmigrantcommunitiesofsoutheastFortWayne.

Knightmakesmultimillion-dollarinvestmentsintwohigh-profileprojectsinitshistorichomecommunityofAkron:$10millionfortheUniversityofAkronandthecity’sUniversity Park Alliancecommunitydevelopmentproject;andadditionalfundingthatnamesthenew,state-of-theartadditiontothe Akron Art MuseuminhonoroftheKnightbrothers.

Stony Brook UniversityandKnightannounceaNewsLiteracyprogramdesignedtoteachstudentshowtojudgethereliabilityandcredibilityofnews.The$1.7million,first-of-its-kindprogramisaimedatteaching10,000studentsoverfouryears.

The network is growing, and joining it are supportersinterested in building capital markets to finance socialenterprises; experts in talent development, and a widerangeofpolicywonksandpoliticianswhoseethepowerthesecitizenactivistsareunleashing.

The New Profit leaders’ gathering comes to Miami in2008.Buildingonthat,AshokawillpartnernextyearwithNew Profit and Echoing Green, another leading socialentrepreneurorganization,toproduceahigh-profileMiamiconferenceonsocialinnovation.

CREATIVE COMMUNITIES INITIATIVE

Social entrepreneurs are also a key part of what notedand controversial urbanist Richard Florida has dubbed“the creative class.” Driving community prosperity andincreasedqualityoflife,Floridaposits,areanewclassofworkersdrawnto“fourT’s”–talent,technology,toleranceandterritoryassets.Andcommunitiesthatwillgrow,hesays,arethosetakinggreatestadvantageoftheircreative,energeticnewresidents.Florida’sideasareputtothetestinthenewKnight Creative Communities Initiative, now under wayin Tallahassee, Fla.; Charlotte, N.C.; and Duluth, Minn./Superior,Wis.Ineachcommunity,theinitiativeiscombiningresearch, training and dialogue to develop a communityvision and an accompanying set of initiatives aimed at

fosteringeconomicgrowth.TheworkingtitlesforacoupleoftheTallahasseeinitiativesuggestadistinctivelycreativeapproach:GreenovationandJumpStartPlanX.

KNIGHT COMMISSION ON INTERCOLLEGIATE ATHLETICS

TheKnightCommissiononIntercollegiateAthleticscontinuesto wield influence nearly two decades since its founding,drivingareformagendaforcollegesportsthatemphasizesacademicvaluesinanarenawherecommercializationoftenovershadowstheunderlyinggoalsofhighereducation.

The pressures are enormous, and yet through thecommission’spersistentwork,theNCAAhasimplementeda“one-plus-three”approachtogoverningcollegesports,in which college presidents work to ensure academicintegrity,financialintegrityandindependentcertification.And2007istheyearthatlong-neededminimumstandardstakeeffectforprogresstowardgraduationforparticipantsinthemajorsportsalongwithpenaltiesforfailingtomeetthestandards.

To prove the enduring need for an independent voice,halfofthefieldof16teamsparticipatingonthebiggeststage for college basketball – the 2007 NCAA men’sbasketball tournament – failed to achieve the required

What sets social entrepreneurs apart from others? St.Paul’sStevenCliftcoineda termwayback in1994–“e-democracy”–awayofusingtheInternettogeneratecitizen participation in the electoral process. A thrivingdemocracy, he says and believes, depends on localinteraction,buttoday’s lifestylesthreatentheconceptofcivicspace.ThroughE-democracy.org,Cliftoffers2,750regularsanonlinenetworkoftownhallopportunities.

ThecombinationofClift’sbusinesslikezealandpassionatesocial mission pursued over a dozen years caughtthe attention of Ashoka, the oldest and largest globalenterprise supporting social entrepreneurs. Since 1981,morethan1,800leadingsocialentrepreneurshavebeenelectedasAshokaFellows.Clift,afirst-yearwinneroftheKnight News Challenge, was inducted into the ranks ofAshokaFellowsinNovember2006.“This is a very big deal,”hiswebsitesays.

Ashoka’s ability to select and cultivate promising socialentrepreneurs makes them a timely partner as KnightFoundationseekstoincorporateasocialentrepreneurial

approachtoourgrantmaking.Overthenextthreeyears,Ashokawillselect15promisingsocialentrepreneursfromtheKnightcommunitiesasFellows,providingthemwithliving stipends, professional support and access to aglobalnetworkofpeers.

Such social entrepreneurs are a breed apart. They putsocial benefit ahead of gain. The New York Times callsthem“Do-GooderswithSpreadsheets.”TrabianShorters,Ashoka’s U.S. co-director, says they “combine the riskandpassionofabusinessentrepreneurwithapassionatesocialmissiontocreatesystemicchange.”They“wanttosolveaproblemonce,notoverandoveragain.”

Andaswecontinuetoseekanddeveloptrulytransformativeideas in Knight Foundation’s national programs andnew initiatives, we know this: To succeed, we’ll need torecognize and reward innovative and system-changingapproachesconstantly,whereverwefindthem.

Each February, you can find an impassioned crowd ofseasonedsocialentrepreneursminglingandlearningwithnewcomersintheCatskillsatNewProfitInc.’sGatheringofLeaders.The2007get-togetherbrought143participantstotheMohonkMountainHouseforthethirdyearinarow,inthebeliefthatbygivingpeoplecommittedtosocialchangeawaytoconnect,networkswillformandatransformationalchangewillsnowball.(seepage12).

C O M M U N I T I E S P R O G R A M SP R O G R A M U P D AT E : N AT I O N A L

The Search for Shining Eyes,anewbookbyartsconsultantThomasWolf,addressesKnightFoundation’sdecade-longsymphonyorchestrainitiative,theMagic of Music,whichinspiredfrankandopendiscussionsaboutthefinancialandattendancecrisesfacedbyAmericanorchestrasandexploredwaystohelpsolvethem. GeorgetownUniversityPresident

John J. DeGioiajoinstheKnight Commission on Intercollegiate Athletics.

U.S.highschoolstudentsknowmoreabouttheFirst Amendment thantheydidtwoyearsagobuttheyareincreasinglypolarizedinhowtheyfeelaboutit,accordingtoanupdateofKnight’sgroundbreakingsurvey.AndU.S.highschoolerssaytheyaregettingmostoftheirnewsfromInternetportalsandmainstreammediawebsites.

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D E C E M B E R

Knightinvests$1millionintheUnited Way of the Midlands,servingColumbia,S.C.,tohelptheorganizationattractyoungdonorsinthe25-to45-year-oldagebracketandrespondtourgentneeds.

A$1milliongrantwillsupportconstructionofthenewNational Infantry Museum and Heritage ParknearColumbus,Ga.Thechapelonthesite’sWorldWarIIStreetwillbenamedKnight ChapelinhonoroftheKnightfamily’slegacyofphilanthropyandmilitaryservice.

adoptedstrategicplanalsopromisesthatLivingCitieswillmore aggressively advocate for government policies thatcatalyzeinvestmentsincities.

The Living Cities funding partners, comprised of Knightand several of the nation’s leading foundations, share acommonvisionofthrivingAmericancitiesthatarebuiltonhealthy,regionallyconnectedneighborhoods.

LivingCitiesplayedavitalrolein2006inhelpingHurricaneKatrina-battered Biloxi, Miss., develop a comprehensiveplan for redeveloping the important, traditionally low-incomeneighborhoodsofEastBiloxi.

WIRELESS COMMUNITIES INITIATIVE

Municipalwirelesstechnologyisbecomingsowidespread,it’sbeingcalled“thefifthutility.”Donecorrectly,itprovidesconnectiontothewebandvitalinformationcitizensneedtolivetheirlives.Morethan500communitiesacrossAmericaareactivelyexploringcommunitywirelessinitiatives,andOneEconomy’sMarshallRunklecalls2007“theyeartherubbermeetstheroad”–whencommunitieslikePhiladelphiaandSanFranciscoexpecttorolloutfull-scalewirelesssystems.

Yet access across those communities isn’t universal,availableoraffordableforeveryone–yet.

KnightFoundationhasteamedwithOneEconomy,IntelandotherpartnerstohelpKnightcommunitiesunderstandtheopportunitymunicipalwirelesspresents,andtheirreadinessforit.AspartoftheKnightWirelessCommunitiesInitiative,thefoundationheldaseriesofwebinarsin2006toconnectparticipantsinKnightcommunitiesonthesubject.

Some jumped right in. In Milledgeville, Knight’s smallestcommunity, we provided a $15,000 grant to One Economytohelpcityleadersbidfor,thenlandmorethan$800,000infundingforwirelessthroughacompetitivegrantprogramoftheGeorgiaTechnologyAuthority.OtherKnightcommunities,amongthemDetroit,GrandForksandBrowardCounty,Fla.,aretakingstepstodevelopwirelesssystems.

The work ahead is ambitious and risky.Butgiventhistechnology’sabilitytoconnectallcitizenstovitalinformation,coupledwiththefoundation’sadvantageasanationalfunderwithlocalroots,whyshouldn’tweaspiretomakeuniversalaccesstowirelessarealityinallKnightcommunitieswithinfiveyears?

minimumgraduationrate.Despitebuildingpressurefrombasketball coaches, some of whom could be subject topenaltiesunlesstheirteams’graduationscoresimprove,the commission will continue to say the reforms are inthe best interests of higher education and should notbeweakened.

In October, the commission plans a summit with collegefaculty, incorporating the results of a survey of faculty atti-tudesandopinionsaboutacademicintegrityincollegesports.

IMMIGRATION INITIATIVE

CitiesandtownsallacrossAmericacontinuetoexperiencethe largest immigrant boom since the last century.Newcomersarecomingfromanevenwiderrangeofnationsandsettlinginnontraditionalimmigrantgatewaycities.

One such place is Fort Wayne, Ind., whose southeastneighborhoods are now home to one of the largestSudanese populations outside of Africa, including manyrefugeesfromtheconflictinDarfur.Effectivelyintegratingthese“NewHoosiers”andeasing theirexperience in theAmericanMidwestisbothachallengeandanopportunity.KnightFoundationcontinuestosupportanationalinitiativeto help immigrants who seek an active role in Knightcommunities like Fort Wayne legally pursue citizenship,eventuallybecomingvotersandvolunteers,homeowners

andbusinesspeople.Helping in thatwork inFortWayneare two recipients of grants from Knight’s AmericanDreamFund:TheAfricanImmigrantsSocialandEconomicDevelopment Agency, which has been providing a civiceducationprogram;andCatholicCharitiesoftheDioceseofFortWayne,whichhasexpandeditsimmigrationprogramtoservemorelow-incomeclients.TheAmericanDreamFundishavinganimpactthrough-outtheKnightcommunities.InBiloxi,Miss.,grassrootsorganizations received $170,000 to help VietnameseimmigrantcommunitiesparticipateinrebuildingeffortsafterHurricaneKatrina.

LIVING CITIESChange is constant and Living Cities, one of the nation’senduringphilanthropiccollaborations,nowsome15yearsold,isrevampingitsapproachtourbanrevitalizationbecauseofbroadshiftsinthecommunitydevelopmentfield.Buildingonitscoreknow-howofbundlinggovernment,privateandphilanthropic investments to provide housing in high-riskareas, the funders’ collaborative will expand its focus toinclude health, education, work-force and environmentissues–allcriticaltocommunitywell-being.Todosoitwillformnewallianceswithfundersandserviceproviders.Itwillexplorenewfinancial investment toolsand look tospreadtheknowledgeitisaccumulatingmoreeffectively.Thenewly

C O M M U N I T I E S P R O G R A M SP R O G R A M U P D AT E : N AT I O N A L

Charlotte,N.C.’s,Campaign for Cultural Facilitiesreceivesa$5milliongranttosupporttheoperatingendowmentfornewculturalfacilitiesincludinga1,200-seattheatertobenamedfortheKnightbrothers.

MilestonesD E C E M B E R

go.knightfoundation.org/communities2006tocomment

Thefoundationendstheyearwithassetsof $2.25 billion.

Knight and Channel One,aproviderofnewsandinformationtomorethansevenmillionmiddleandhighschoolers,announceanationalcampaigntohelpU.S.teensunderstandandappreciatethefreedomsguaranteedthembytheFirstAmendment.

H O W T O A P P LY

Are you a visionary leader? Do you have a transformational idea?

We’ve emphasized the role of leadership in this annualreport because we believe every transformational grantidea must benefit from the visionary leadership of anarticulateandcharismatic individualorteam.Thephotoessays,theprogramnarrativesandthemultimediastoriesonourwebsiteallillustratethatpoint.

Like those leaders, we passionately believe things canbe better. Knight Foundation’s twin missions are toseed and inspire great journalism everywhere, and tobuild strong communities in the cities and towns whereourfounderspublishnewspapers.

Asanationalfoundationwithlocalroots,weseekopportunitiesthat can transform both communities and journalism,andhelpthemreachtheirhighestpotential.Webelievenothing big happens without a big idea. nNothing newwithout a new idea. In every project we fund, the ideacomesfirst.

Every day, we ask ourselves and our partners, “Is this truly transformational?”

Weseekleaderswhoaskthesamequestion,identifythebest opportunities, acknowledge risk, and turn the bigideasintoaction.

We think the ideal transformational grant:

> Hasthepotentialtocreatesystemicchange,affectinganunderlyingsystemorstructurebyaddressingrootcauses.Systemschangeoften requires innovationanddiscovery,andalwaysaspirestoenduring,sustainablechange.

> Enjoysorwilllikelyenjoybroadsupport,manifestedthroughthecollaborationofmultiplecommunitystakeholders,andwillmagnifyawarenessofanissue.

> Iseitheratthescaleoftheproblemitattemptstoaddressorisscalable,replicable,orpartofaphasedapproach.

Successful transformational ideas:

> Will have visionary leadership, will be carried out by acapableteamworkingthroughastrongnetworkofsupport,will build on a feasible execution plan and will use anapproach,whetherinnovativeorbestpractice,appropriatetothecontext.

> Willpresentanappropriatelevelofrisk.

Everysuccessfulprojectorinitiativewe’velaunchedinthe

pasthashadanabundanceofthoseelements.Ifyoubelieveyourgrantopportunityfits,wewanttohearfromyou.

Thefirststepistocontacttheappropriateprogramdirectorfor your community or your programmatic interests injournalism. A simple way to find out more about ourprogramsistovisitourwebsite’sLetterofInquirysectionforaself-guidedtour:

2006 Grants approvedBy the John S. and James L. Knight Foundation

P R O G R A M N U M B E R O F G R A N T S A M O U N T

COMMUNITIES PROGRAM CivicEngagement/PositiveHumanRelations 11 $3,242,000 CommunityFoundationsInitiatives 2 900,000 EconomicDevelopment 11 2,782,000 Education 3 359,500 HousingandCommunityDevelopment 11 15,308,000 VitalityofCulturalLife 12 15,710,000 Well-beingofChildrenandFamilies 12 5,700,600 OtherCommunityPriorities 3 720,000

Subtotal: 65 grants $ 44,722,100 JOURNALISM PROGRAM Electronic/NewMedia/NewsinthePublicInterest 15 $6,080,000 JournalismTrainingandEducation 10 7,788,000 NewsandNewsroomDiversity 4 850,000 PressFreedomandFreedomofInformation 11 7,153,750

Subtotal: 40 grants $ 21,871,750

NATIONAL AND NEW INITIATIVES CivicEngagementandPositiveHumanRelations 7 $5,720,000 Well-beingofChildrenandFamilies 2 265,000

Subtotal: 9 grants $ 5,985,000

OTHER CivicEngagement 1 $15,000 CommunityPriorities 19 575,075 Journalism 1 5,000 Education 1 5,000 VitalityofCulturalLife 1 140,869 Well-beingofChildrenandFamilies 1 9,500 Trustees-RecommendedGrants 53 470,000

Subtotal: 77 grants $ 1,220,444

GRAND TOTAL 191 grants $73,799,294

Listed below are $73,799,294 in new grants approved during 2006 by the John S. and James L. Knight Foundation. Some of these grants, as well as those approved in past years, are disbursed over a period of

several years. The net effect of these past and future commitments is that during 2006, the foundation actually disbursed $104,310,919. For a complete list of 2006 grants, go to www.knightfdn.org.

C O M M U N I T I E S P R O G R A M SG R A N T S O V E R V I E W

go.knightfoundation.org/2006grantstocomment

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go.knightfoundation.org/applytocomment

PRESIDENT’S OFFICE

Alberto Ibargüen President

Liset Huff Executive Assistant to the President

PROGRAMS

National and New Programs

Paula Lynn EllisVice President/National and New Initiatives

Julie E. Tarr Director of Evaluation and Program Director for State College

Damian ThormanNational Program Officer

Bronwyn MillsProgram Assistant

Communities Program

Michael MaidenbergVice President/Communities Program

Meredith HectorAssistant to the Vice President/Communities Program

Jo LaverdeExecutive Assistant/Communities Program

Matt BergheiserProgram Director for Philadelphia

Beverly BlakeProgram Director for Georgia

Anne CorristonProgram Director for Aberdeen, Grand Forks and Wichita

Lorenzo LebrijaProgram Director for Miami

Adele LyonsProgram Director for Biloxi

Vivian Celeste Neal Program Director for Akron and Fort Wayne

J. Michael PateProgram Director for Tallahassee

Susan Patterson Program Director for Charlotte, Columbia and Myrtle Beach

Brenda G. PriceProgram Director for Detroit and Gary

Polly M. Talen Program Director for Duluth and St. Paul

Laura WilliamsProgram Director for Lexington

Stefanie PosteraroProgram Assistant

Journalism Program

Eric Newton Vice President/Journalism Program

Gary KebbelJournalism Program Officer

Denise TomJournalism Program Specialist

Sara RosadoExecutive Assistant/Journalism

Hannah BaeJournalism Intern

GRANT ADMINISTRATION

Julie B.A. BrooksGrants Manager

Sandra Gross Grants Assistant

Marcia BrodProgram Assistant

ADMINISTRATION

Belinda Turner Lawrence Vice President/Chief Administrative Officer

Tom Pitmon Workforce Performance and Development Manager

Susan L. Gomez Manager of Administrative Services

Elika Lopez Human Resources Executive Assistant

Reba N. Sawyer Receptionist

Melissa SmithAdministration Assistant

Olga RodriguezArchives, Records and Library Assistant

INFORMATION TECHNOLOGY

Jorge MartinezDirector of Information Systems

Albert Santaballa Programming/Analyst

Paul PavonTechnical Support Specialist

FINANCE

Juan J. MartinezVice President/CFO and Treasurer

William NicholsInvestment Officer

Elena StetsenkoController

Lia MartinezAccounting Manager

Kevin ChristianAccounting Assistant

Beverly JemmottAccounting/Investment Assistant

COMMUNICATIONS

Larry Meyer Vice President/Communications and Secretary

Marc FestDirector of Communications

Robertson AdamsCommunications Associate – Webmaster

Jose Zamora Communications Assistant

W. Gerald Austen, M.D.Chairman

Alberto IbargüenPresident and CEO

Robert W. BriggsVice Chairman

W. Gerald Austen, M.D.Honorary Trustee and Surgeon-in-Chief, EmeritusMassachusettsGeneralHospital

Robert W. BriggsExecutive DirectorTheGARFoundation

Alberto IbargüenPresident and CEOJohnS.andJamesL.KnightFoundation

Cesar L. AlvarezPresident and Chief Executive OfficerGreenbergTraurig

Mary Sue ColemanPresidentUniversityofMichigan–AnnArbor

Marjorie Knight CraneTrusteeanddaughterofJamesL.KnightCharlotte,N.C

James N. CrutchfieldDirector of Student Media and Professor of JournalismArizonaStateUniversity

Paul S. GroganPresidentTheBostonFoundation

Rolfe NeillFormer PublisherTheCharlotteObserver

Mariam C. NolandPresidentCommunityFoundationofSoutheasternMichigan

Beverly Knight OlsonTrusteeanddaughterofJamesL.KnightMacon,Ga.

Earl W. PowellChairmanTrivestPartnersL.P.

Paul SteigerManaging EditorWallStreetJournal

Paula Lynn EllisVice President/National and New Initiatives

Belinda Turner LawrenceVice President/Chief Administrative Officer

Michael MaidenbergVice President/Communities Program

S TA F F (asofMay1,2007)

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John W. Rogers Jr.Chairman and CEOArielCapitalManagementLLC

E. Roe Stamps IVFounding Managing PartnerSummitPartners

C O M M U N I T I E S P R O G R A M ST R U S T E E S

C O M M U N I T I E S P R O G R A M SO F F I C E R S

Juan J. MartinezVice President/CFO and Treasurer

Larry MeyerVice President /Communications and Secretary

Eric Newton Vice President/Journalism Program

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I N V E S T M E N T R E P O R T

Knight Foundation’s portfolio performed well in 2006, bothinabsolutetermsandinrelationtoitsinvestmentgoals.

The Knight Foundation portfolio returned 13.71 percent(netofinvestmentmanagementfees)lastyear,itsfourthconsecutiveyearofdouble-digitgrowth.Atyearend,theportfolio’s market value was more than $2.26 billion,a new high, having grown by $191 million, net of $104million in grants and administrative expenses of $11.7million.Inaddition,thefoundation’sbeneficialinterestincharitableremainder trusts increasedby$9.5million to$80.8million,bringing totalendingassets tomore than$2.34billion,alsoanewhigh(Table1).

INVESTMENT RETURNS

Thegenerallystrongperformanceofglobalequitymarketsin2006inresponsetorobusteconomicgrowthhadmuchto do with the portfolio’s performance. Indices for U.S.equities returned approximately 16 percent, Europeanequities, 34 percent, Japanese equities, 6 percent, andemergingmarketequities,33percent. U.S. investment-gradebondsreturned4.3percent.

Inthisenvironment,KnightFoundationobviouslybenefitedfrom itspolicyofallocatingahighpercentageofassetstoequityandequity-likeinvestments.With2006inflationat 2.6 percent, the portfolio substantially exceeded thefoundation’srealreturnobjectiveof5.5percent.Becausethat increasesthepurchasingpoweroftheassetsaftergrantsandexpenses,thefoundationhastheopportunityfor higher grant spending in the future. However, theactualportfolioreturns,whilestillsubjecttoadjustmentforfourthquarternonmarketablereturns,laggedthatofthePolicyPortfolioby50basispoints,duemainly toanoverweighttoJapaneseequities(Table2).

ASSET ALLOCATION ANDASSET CLASS PERFORMANCE

The foundation’s asset allocation targets (see pie chart)illustrate Knight Foundation’s strategy of diversifyingthe portfolio into five broad investment categories. Thebenefitofparticipatinginsuchawiderangeofinvestmentopportunitieswasevidentin2006,asperformancediffereddramatically across these categories. The Global EquityPortfolioprovidedthehighestreturn,21percent,boostedby a 39 percent return from emerging markets, whiletheHedgeFundprogram,fromwhichKnightFoundationseeks lessvolatileabsolutereturns,generatedastrong14percentreturn.Theserobustperformancesmorethanoffsetreturnsof6percentand5percentfromtheFixedIncomeandInflationHedgingportfolios,respectively.

IN SUMMARY

Takingintoaccountthestrongperformanceoftheportfolioandthegeneralmarketconditions,ouroverallinvestmentobjectives remain the same. After four years of above-average returns, fueledby risingglobalequitymarkets,noinvestmentcategoryappearstooffercompellingvaluetoday.Asaconsequence,weexpectdouble-digitreturnswillbehardertoachieveinthecomingyears.Thus,KnightFoundation’s objectives are to remain highly diversified,and to focus on manager selection and disciplinedrebalancing,asthesearelikelytobethekeyelementsofsuccessfulportfoliomanagementin2007.

1 The final number will be somewhat higher because this return assumes no fourth-quarter return from the nonmarketable portfolio, since data on private investment partnerships is available only with a one quarter lag.

TA B L E 1

2006 2005)CHANGE IN ASSET VALUES (dollars in millions)Investment Activity, Net $ 307.0) $ 235.8) Grants Paid (104.3) (92.6) General and Administrative Expenses (11.7) (10.6) Taxes Paid, Net (2.5) (2.3) Contributions Received 0.5) 1 .4)Charitable Trusts 9.5) (9.8)Other 1.2) 0.5)TOTAL CHANGE $ 199.7) $ 122.4)

Memo: Beginning Assets $2,142.9) $2,020.5)Ending Assets $2,342.6) $2,142.9)

TA B L E 2

SUMMARY OF INVESTMENT PERFORMANCE AVERAGE ANNUAL RETURNSPeriod Ended Dec. 31 2006 5 Years 10 YearsKF Portfolio 13.7% 9.8% 13.0%Portfolio Benchmarks:Policy Portfolio 14.2% 9.1% 8.5%Cambridge Associates (CA) Endowment Median 14.6% 9.5% 9.6%

A S S E T A L L O C AT I O N TA R G E T S

Global Equity30%

Inflation Hedging20%

Private Equity18%

Hedge Funds20%

Fixed Income & Cash12%go.knightfoundation.org/financialsfortheIndependentAuditor’sReportandComplete2006FinancialStatements

54A N N U A L R E P O R T 2 0 0 6

A C K N O W L E D G M E N T S

A B O U T T H E M U LT I M E D I A P R E S E N TAT I O N

Alex FledderjohnandSarahmaria Gomezof[Tu]Multimedia,Chicago,Ill.,photographed,reportedthestoriesoftransformationandcreatedtheonlinemultimediapresentationsforthisannualreport.

Alex,borninGuatemala,graduatedfromOhioUniversitywithamaster’sdegreeinphotojournalism.HeisTu’sphotographer/pro-ducerandauthorofAntigua.Sarahmaria,anativeofSantaFe,N.M.,andjournalismgraduateofNorthwesternUniversity,isreporter/pro-ducer.Pleasevisittheirwebsiteathttp://tumultimedia.org.

AlexFledderjohntookallphotographsexceptasnoted.

IFC–KnightFoundationArchives,2–MarkWilsonforKnightFoun

IFC–KnightFoundationArchives,2–MarkWilsonforKnightFoun-dation,4–MarkWilsonforKnightFoundation,25–SourceofKnightTheaterimage/Charlotte?,25–SourceofKnightChapelimagefromColumbus,34(Kebbel)RobertsonAdamsforKnightFoundation,34--FilmFestival(??),35–LisaHelfertforKnightFoundation(KnightCommission),36--Anniston??WhofromAnnistonStar?,37--AlFranquizforMiami.com(KnightRidder/Heraldbuilding),37–SourceofMalcolmMoranphoto?,38–TurnerandWhartonphotos?,38-39(StudentplantingatAlcornMiddle)PhotocourtesyofJefferyWatkins,39–Powell,StampsandSteigerphotosbyMarkWilsonforKnightFoundation,40-41(ThreegirlsLexingtonacademiccompeti-tion?)PhotoforKnightFoundationbyJosephReyAu,40–SourceofKnightConcertHallfaçade?,40–SourceofKnightdaughters/Alber-tophoto?,40–SourceofNews21pix?,41–SourceofPaulaLynnEl-lisphoto?,41–Kunkel/Mote/IbarguenatKnightHall(LisaHelfert?,42–SourceofJackDeGoia?,43–SourceofKnightadditionatAkronArtMuseum?,43–What’stheImageshowingHighSchoolJournal-ism?,45–Juan/Eric/Mike?,48–MarkWilsonforKnightFoundation

E D I T O RLarryMeyer

C O N T R I B U T O R SW.GeraldAusten,M.D.;AlbertoIbargüen;MichaelMaidenberg;Be-lindaTurnerLawrence;PaulaLynnEllis;EricNewton;GaryKebbel;DeniseTom;SusanPatterson;PollyTalen;VivianCelesteNeal;AnneCorriston;JulieB.A.Brooks;SandraGross;MarcFest;RobertsonAdams;JoseZamora;BarbaraKoning;WilliamNichols;ElenaStet-senko;JasonAlbrecht;KevinStephenson,andCarolineWingate.

D E S I G NVortexCommunications,CoralGables,Fla.

P R I N T I N GSoutheasternPrinting,Stuart,Fla.