2006 KF Annual Report

W H AT W E D O 2006 A N N U A L REPORT We are a national foundation with local roots. We choose, as the WHAT WE DO 2 Knight brothers chose, to focus on journalism and communities, LETTER FROM THE CHAIRMAN AND PRESIDENT 4 inspiring and Enabling them to reach their highest potential. ESSAY: THE ROLE OF LEADERSHIP IN TRANSFORMATION 6 STORIES OF TRANSFORMATION 8 And we ask, as we evaluate opportunities and grants, “Is this truly transformational?” > When Leaders Gather, the Subject is Social Change 10 > Knight News Challenge Winners Innovate With Digital Media 14 We embrace the responsibility to discover and support ideas that > Two Campuses Educate the 21st Century’s Leaders and Readers 18 can make the ideal real. > Arts and Culture Inspire the Soul, Serving as Economic Drivers 22 > Newcomers Volunteer, Bonding a Carolina Community 28 Because grant making requires a sound financial base, we preserve the Knight brothers’ gifts through prudent investment > Committed Leaders Collaborate, Leveraging Akron’s Assets 32 and careful management. PROGRAM UPDATES > Journalism 36 > Communities 40 > National 44 Transform. Lead. Go! GRANTS OVERVIEW 48 HOW TO APPLY 49 Would you like to see and hear TRUSTEES, OFFICERS, STAFF 50 our Stories of Transformation, INVESTMENTS 52 told in multimedia? And would you care to comment? ACKNOWLEDGMENTS 54 Then … Go! go.knightfoundation.org/annual

right to left: W.GERALD AUSTEN, M.D. Chairman of the Board, John S. and James L. Knight Foundation ALBERTO IBARGÜEN President and CEO, John S. and James L. Knight Foundation LETTER FROM THE CHAIRMAN AND PRESIDENT go.knightfoundation.org/letter to comment The Knights sought actively and aggressively to reflect In the early 1970s, Secretary of State Henry Kissinger is goal of universal wireless access so that residents may geography. It sounds simple, and we made it simpler, by the communities they served. In doing so, they helped said to have asked Chinese Premier Zhou Enlai for his enjoy and participate in the new age, digital town square. eliminating most rules and qualifications in the Knight build, define and even transform those communities. The assessment of the French Revolution. “Too soon to tell” News Challenge, our groundbreaking contest to create brothers believed strong communities would be good was Zhou’s reported response. This report on our activities during 2006 details our an opportunity for the wisdom of a crowd to emerge. In for their newspapers because newspapers, in effect, excitement as we seek transformational change in journal- the first year of our five-year challenge, we received 1,650 represented the whole community. Perhaps it’s also too soon to tell the impact of changes ism and communities. The stories you’ll experience here ideas from thinkers, activists, journalists and inventors that were taking place at the beginning of the 20th are found with additional pictures, sound and video on our energized by our offer to spend $5 million each year. Some Instead of fearing or resisting change, they embraced century when Jack and Jim Knight began their careers. web site, go.knightfoundation.org/annual. of the winners are detailed in this report. it. We see in them the instincts of today’s great Internet But those times of ever-faster change set the stage and social entrepreneurs. And we believe we honor their and the example for how we live today. Technology Social entrepreneurship – the application of entrepre- Of course, none of this would be possible without a solid memory, and their intent in creating Knight Foundation, progressed geometrically, and values were steadily neurial business thinking to social issues – is an asset base. A summary of our financial information is included by acting with vision and courage, and by taking risks in more relative as the world became less parochial after increasingly popular concept around the world. But it in this report. For our full audited financial statements, the areas of community advancement and journalism to World War II. isn’t a fad. It is a simple and logical way to set visionary please visit go.knightfoundation.org/financials. which they dedicated their working lives. goals, plan for sustainability and demand performance Jack and Jim Knight and accountability in social enterprises. We see it as part In 2006, three new trustees joined Knight Foundation’s In 2006, Knight Foundation continued fundamental shifts of our larger effort to identify transformational leadership board. They are Earl Powell, chairman of the private equity embraced their world in its program practice, from print to digital in journalism, and opportunities. firm Trivest Partners; E. Roe Stamps IV, founding managing and from charity to social investing in community. These partner of the private equity firm Summit Partners; and and the technology shifts, like any social enterprise, will take time to mature To that end, we funded the internationally acclaimed Paul Steiger, managing editor of The Wall Street Journal. and for results to be understood. As Zhou understood, Ashoka organization to identify and help develop a new They are exceptionally able and experienced leaders and that made possible cultural change is slow. But as Kissinger showed, when generation of social entrepreneurs in Knight communit- wonderful contributors to our board. their vision of a future the time is right and new technology becomes available, ies. We sponsored urbanist Richard Florida to work in We understand that you must seize the opportunity. Charlotte, Duluth and Tallahassee with groups of far greater than their first newspaper, the Akron Beacon “community catalysts” tasked with identifying and building transformation takes And so we did. Journal. Today, that concept is our beacon, our North “the creative class.” Star. They had the courage to take risks, the know-how to time, commitment We accelerated a shift in our journalism program from execute, and the tenacity to see their plans through. They In Akron and Detroit, we increased our commitment to traditional education and training programs to a search used advances in printing, telephony and transportation local leaders seeking alternative, entrepreneurial ways to and risk. And we take seriously the rare for new ways to do with digital technology what Jack to build what would become one of the great newspaper transition from industrial to innovation economies. And in and Jim Knight did with newspapers: share timely news companies in the world, at a time when newspapers those and other Knight communities like Milledgeville and privilege to invest this foundation’s assets to change our and information that connects people within a defined dominated media. Philadelphia, we’re working with local experts toward the world and our communities for the better. 4 5 A N N U A L R E P O R T 2 0 0 6 A N N U A L R E P O R T 2 0 0 6

David Gergen addresses the participants at the 2007 Gathering of Leaders in Mohonk, N.Y. ESSAY: 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/essay to comment We rightly salute individual leaders for their achieve- It’s impossible to imagine the creation of India without lowest levels to become leaders in their own right. Then For the individuals who must lead without a partner, the ments, and since the days of ancient Athens, societies Mohandas Gandhi’s leadership. Or the emergence of biracial you unleash the true transformative power of the whole key is to create a great team. The historian Doris Kearns have sought better ways to prepare young people to harmony in a free South Africa without Nelson Mandela. team. And that culture will survive and even flourish long Goodwin has shown us, for example, that Lincoln succeeded become leaders. In our own time, we have learned to Or the rallying of the British people to turn back the Nazi after an individual leader steps off the stage. to considerable degree because he chose such strong prize innovative and entrepreneurial leaders, whether threat without Winston Churchill. Cabinet members to help him and willingly sought their America today cries out they are building a business or starting a charter school. counsel. When Lou Gerstner went to the rescue of IBM, he Today, as in the past, the quality of leadership remains Coming closer to home, we cannot think of the creation of was wary at first of setting a vision; he put far more for transformation. Even as we the “X factor” in organizations and societies – that extra our own republic without remembering George Washington, emphasis upon assembling a strong team around him. dimension that is hard to measure but that can make all or its survival without remembering Abraham Lincoln. Nor Jack Welch was famous at General Electric for forming have accumulated massive economic and military power, the difference in whether a group succeeds in its mission. can we envision how so many hands would reach out to help one of the strongest teams ever seen. As management we have squandered much of our respect in the eyes of residents of industrial cities without Jane Addams, or how scholar Jim Collins has written, one of the first tasks of a the world. Here at home, we have drifted badly, failing to Yet it would be a mistake to see a transformational leader the civil rights movement would have succeeded without leader these days is to get the right people on the bus in renew our public schools, allowing glaring inequalities to as a singular, heroic figure atop a white horse, able to Martin Luther King Jr. the right seats – and get the wrong people off the bus. emerge in our communities, permitting the health-care win the day all by himself. As Warren Bennis wrote some system to weaken, piling up financial IOUs to our younger The lesson is clear: years ago, the old vision of the lone individual bending Even a great team may fail, however, unless the leadership citizens, and recklessly spoiling the environment. Clearly, history has given way to an understanding that leadership creates a special culture within the organization – a culture we need to transform our culture and our communities. Strong, effective, moral is most frequently exercised within a group context. that is dedicated to a vision of change. Blowing a trumpet It’s time not just for one or a hundred but for thousands will be an empty exercise unless there are listeners willing upon thousands of new leaders to step forward, pick up leadership is critical to Often, a group succeeds because there is not one but and ready to respond. Thomas Jefferson once speculated the banner and blow the trumpet of change. Millions of at least two co-leaders who guide the fortunes of the that the reason the American Revolution succeeded while Americans are now listening and are ready to act. transformations. Long before organization. Would Bill Gates have built Microsoft the French Revolution slid into tyranny was the difference without Steve Ballmer at his side? Would Ben Bradlee in the quality of the followers – in America, people had a leader steps forward, of course, social and economic have transformed The Washington Post without Katharine become accustomed to governing themselves in small forces may create an environment in which change Graham? Or think of the success of the Knight brothers, communities while in France, they had not. One group of becomes more possible; pressures for change may build as Jim managed the business side and Jack worked with followers was willing and prepared to build a democratic In the past three decades, David Gergen has served as up from the grassroots over a period of years. Ultimately, the editors. Among the leading social entrepreneurs of republic; the other was not. White House adviser to Presidents Nixon, Ford, Reagan and however, at least one individual must take a risk, pick today, few are more successful than Dave Levin and Mike Clinton. He was editor of U.S. News & World Report in the up a banner and blow a trumpet, calling others to come Feinberg in building the KIPP (Knowledge Is Power In today’s context, to achieve transformation, the role at mid-1980s. He is a public service professor of public lead- together in the pursuit of a shared vision. That individual Program) schools or Alan Khazei and Michael Brown in the top is to become a leader of leaders. The most effective ership and director of the Center for Public Leadership at is the person we call a leader, and that leadership goes building City Year. Partners in leadership can be an excellent leaders are those who push responsibility and leadership Harvard’s Kennedy School of Government. He wrote this for hand in hand with transformation. recipe for transformations. down into the organization, empowering people at the Knight Foundation. 6 7 A N N U A L R E P O R T 2 0 0 6 A N N U A L R E P O R T 2 0 0 6

S T O R I E S O F T R A N S F O R M AT I O N > When Leaders Gather, the Subject is Social Change 10 Meet leaders who use their networking opportunities to change the world a nd the way it communicates by focusing on social problems in new ways. go.knightfoundation.org/gather Transformation requires leadership. > Knight News Challenge Winners Innovate With Digital Media 14 Who will do in the 21st century with digital media what the Knight brothers did in the 20th century with their newspapers? go.knightfoundation.org/innovate Leaders discover the facts. They have the vision to see what’s possible. > Two Campuses Educate the 21st Century Leaders and Readers 18 They have the courage of their convictions. Two journalists-turned-educators with big ideas are demonstrating news ways to teach and appreciate quality journalism. They have or learn know-how necessary to get things done. go.knightfoundation.org/educate They are tenacious; they don’t give up. > Arts and Culture Inspire the Soul, Serving as Economic Drivers 22 When leaders apply these elements, whether in seeking systemic change Top-notch arts and cultural institutions in Knight communities lead the way or building a network, they are on the road to transformation. toward dramatic downtown transformations. go.knightfoundation.org/inspire The following stories feature people just as passionate about their work as the Knight brothers were about journalism and communities. These are stories of people who gather together and volunteer for the greater good. They are stories of leaders who innovate and inspire, > Newcomers Volunteer, Bonding a Carolina Community 26 educate and collaborate. By tapping the pool of professionals drawn to the South Carolina coast, a new program in Myrtle Beach may be onto something transformational. They are Stories of Transformation. go.knightfoundation.org/volunteer Well-told stories, Jack Knight believed, help give people “an awareness of their own condition, provide inspiration for their thoughts and rouse them to pursue their true interests.” > Committed Leaders Collaborate, Leveraging Akron’s Assets 30 Partners in the University Park Alliance have leveraged early investments into a nationally recognized revitalization built on lifelong learning and health. go.knightfoundation.org/collaborate 8 9 A N N U A L R E P O R T 2 0 0 6 A N N U A L R E P O R T 2 0 0 6

S T O R I E S O F T R A N S F O R M AT I O N left: Panelists Craig Newmark, founder of craigslist, and pollster John Zogby comment at We Media below: Miami Herald radio reporter Joshua Johnson questions a panel at We Media go.knightfoundation.org/gather for a multimedia show and comments When Leaders Gather, the Subject is Social Change It’s a simple idea. Rather than rely on one leader, “We can accomplish so much as essayist David Gergen warns against (see page 6), fill a room with smart, more if we leverage each other’s committed, entrepreneurial leaders bent on social change and see what happens. knowledge and experience ….” “The whole is greater than the parts,” says Vanessa Kirsch, president VANESSA KIRSCH and founder of New Profit Inc., a hub for social entrepreneurs. “We can President, New Profit Inc. accomplish so much more if we leverage each other’s knowledge and experience and the power of our networks, together, to really create the kind of change we want to see in this world.” That’s the notion behind Knight Foundation’s commitment to playing host, whether it’s for the crowd of social entrepreneurs huddling in Mohonk, above: N.Y., each February at the Gathering of Leaders, or February’s We Media Reporter Myles Miller of Children’s Press Line covers We Media Miami conference, a digital media mash-up of people with big ideas and the organizations that can bankroll them. below: Architect Zaha Hadid addresses Miami audience And even by hosting a luncheon conversation with visionaries like star architect Zaha Hadid in Miami, we provide a way for citizens to actively co-organizer of the conference. “And the conference we do surround- participate in the intellectual life of the city. ing We Media is meant to spur thinking and innovation to enable a better-informed society where The chain of logic: Collective action moves ideas to action, brings good ideas to scale, helps them reach a critical mass. Potential transformation. everyone is media. “We Media is a term we coined a couple years ago to describe the transformation taking place worldwide…. The shift is from media Despite Miami’s tropical setting, We Media is where the Suits meet the as an institution to media being everyone,” says Andrew Nachison, überhip. “It would do us no good to have an executive from MTV sitting next to an executive from CBS sitting next to an executive from YouTube, all speaking their executive talk,” says Nachison. “It’s much more interesting, productive and valuable to bring people who aren’t used to sitting next to each other together. > 10 11 A N N U A L R E P O R T 2 0 0 6 A N N U A L R E P O R T 2 0 0 6

go.knightfoundation.org/gather for a multimedia show and comments “The whole is greater than the parts.” VA N E SS A K I R S C H President, New Profit Inc. “For us the outcome is literally outcomes, actions that necessitate above and opposite: The Gathering of Leaders at Mohonk, N.Y. a pretty provocative, challenging experience for the participants. They actually look each other in the eye, exchange ideas, confront differences below opposite: Jean Martin, Managing Director of the and seek opportunities to take action.” Corporate Leadership Council The Mohonk gathering began several years ago because individual social entrepreneurs were frustrated by the pace of change. “The kind of leaders we work with at New Profit are passionate, tenacious, visionary people who also balance their vision with the ability to get results and accomplish real goals and have a sense about the balance between “ … we are stronger together, vision and doing,” says Kirsch. and stronger when we work together on big ideas.” Important things happen at the Gathering of Leaders, says Paula Ellis, Knight’s vice ERIC SCHWARZ President, Citizen Schools president/National and New Initiatives. “The individuals who go there are folks who are looking first for community, other people like them who are trying to change the world, focusing on solving social problems in a “I think it is really important that Knight Foundation is … engaged and gets new way.” this kind of work,” said John Rice, a Mohonk attendee. “It really speaks to their leadership and what they stand for.” “This is a chance for us to come together and remind ourselves that we are stronger together, and stronger when we work together on big ideas,” says “Social change is so difficult, it takes so much time, and we’re in Mohonk veteran Eric Schwarz, president and co-founder of Citizen Schools. this for the long haul,” says Knight President Alberto Ibargüen. “This is not a fad. This is not the current trend. At the very core, “Knight at its heart is about communities … but there are communities of these are the people who are going interests,” says Ellis. “In this case, this is a movement we really want to support and build. We think that defining intractable issues in a different to transform community.” way and bringing resources to them is really important. And these folks look like people who can do it.” 12 13 A N N U A L R E P O R T 2 0 0 6 A N N U A L R E P O R T 2 0 0 6

go.knightfoundation.org/innovate for a multimedia show and comments S T O R I E S O F T R A N S F O R M AT I O N Knight News Challenge Winners Innovate with Digital Media While cyberspace takes great above: Journalism Program Officer Gary Kebbel discusses News Challenge entries as advantage of the virtual, it Knight Trustee Jim Crutchfield listens opposite: overlooks a hard reality. MIT’s Chris Csikszentmihalyi and Arjun Bhat (student) “We don’t vote virtually, we don’t elect a virtual president, we don’t pay virtual taxes, we don’t drive on virtual roads,” says Gary Kebbel, Knight’s journalism program officer. “Our lives are organized around geography … where we live and work, in real life, with real people coming together to The News Challenge’s first-year entry pool included 1,650 applications work on community problems.” seeking up to $4 billion. They came from people as young as 8 years old, from corporations and major education institutions, from entrepreneurs And we asked: Who will do in the 21st century what the Knight brothers and mainstream media outfits. Applications for the 2007 round can be did in the 20th century with their newspapers? Who will use digital news submitted July 1 at www.newschallenge.org. and information to build community? With its New Challenge award, MIT is creating a Center for Future Civic That’s the essence of the Knight News Challenge, a five-year, $5 million- Media to test and investigate civic media in local communities. The center per-year contest open to anyone, anywhere capable of developing new ways pairs MIT’s renowned and inventive Media Lab with the Comparative to use news and information to connect people to real geographic places. Media Studies Program, which identifies the cultural and social potential of media change. The building blocks are geography, digital media and open source. Or as Eric Newton, Knight’s vice president/Journalism Program, puts it: “Nerds, “This is a school that’s filled with geeks of different sorts,” says the Media news and neighborhoods.” above: Jay Rosen (center) is one of several bloggers Lab’s Chris Csikszentmihalyi. “It’s a remarkable place in terms of finding who will refine his News Challenge idea online alternative roles of technology The initial winners are a distinct and daring group of organizations over the next year and individuals with big ideas. They represent an arc from MIT to MTV that you wouldn’t see anywhere … from an innovation incubator being built by seven female journalism educators to a network of bloggers generating a global conversation, with else in the world.” > contributions from Ghana, Fiji and Tajikistan. 14 15 A N N U A L R E P O R T 2 0 0 6 A N N U A L R E P O R T 2 0 0 6

They’re digital natives. “They get it” … “They live online.” D I A N E LY N C H Ithaca College A great many of the ideas judged by a panel of digital media pros addressed the contest’s central opportunity. In December 2005, Geoff Dougherty founded Chi-Town Daily News, an online newspaper written by and for Chicagoans. The Daily News uses citizen journalism, hyperlocal news and multimedia. “I was noticing that there was a real gap in local coverage and there were a lot of neighborhoods and issues going uncovered,” he said. Many took the opportunity to get young citizens engaged in community and democracy. MTV will deploy mobile youth journalists – MYJos – across the 50 states with digital opposite top: devices to cover the 2008 presidential election. The best of the mobile Diane Lynch of Ithaca College debates with students reports will be repurposed on an MTV program. opposite: Chi-Town Daily News Cameraman Geoff Dougherty “Every young person, no matter what issue matters to them, can now have shots a podcast featuring Andrew Seidler (left) and Mike Maguire a platform to get other young people to become educated about those issues, to connect and collectively now take action,” says Ian Rowe, MTV’s top: MTV’s Ian Rowe comments during a panel discussion vice president of strategic partnerships and public affairs. below: Adrian Holovaty One winning idea, spearheaded by Diane Lynch at Ithaca College, lifts a page from the web development playbook by forming a learning community among journalism educators and students at seven U.S. campuses. The Innovation Incubator Project partners will collaborate to create models of participatory community news production, making them widely available through a partnership with the Online News Association (ONA). Lynch calls the project “a contemporary petri dish.” College students have a huge advantage, she says. “They’re digital natives. They get it. They live online. They understand community, they understand social networking. We don’t have to explain it to them.” First-year winner Adrian Holovaty, at age 26 a veteran of creating such interactive web applications as the award-winning ChicagoCrime.org, lauds the spirit of the News Challenge. “I think it is a great contest because it is an encouragement of innovation in the journalism industry … go.knightfoundation.org/innovate for a multimedia show and comments an industry that sorely needs it.” 16 17 A N N U A L R E P O R T 2 0 0 6 A N N U A L R E P O R T 2 0 0 6

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/educate for a multimedia show and comments Two Campuses Educate the 21st Century’s Leaders and Readers The digital revolution is not for the top: Deepa Fernandes conducts an interview during her on-campus radio show faint of heart. At Columbia University’s prestigious Graduate opposite: Columbia journalism students Aja Harris and School of Journalism, Dean Nicholas Lemann bridges the practice and Christine Brouwer (with camera) covering an teaching of journalism, on campus and in the field. The New Yorker on-campus protest writer is leading a high-profile effort to develop a series of real-world, multimedia case studies to teach the next generation of journalism’s editors and producers how to lead in a time of change. “How do you teach a student how to be an editor of a big-city daily?” “What we hope to be able to he asks. “How do you teach how to cover national security or ethical do is to give journalists much problems that come up in news stories?” more confidence … .” The cases are emerging from some of the timeliest and most complex D E A N NICHOLAS LEMANN stories in today’s headlines. They’re set in the newsrooms of, for example, Graduate School of Journalism, The Times-Picayune in New Orleans during Hurricane Katrina, or The Columbia University Washington Post. “What we hope to be able to do is “It is a much more powerful learning tool than if you brought in [Post Executive Editor] Len Downie and he said, ‘let me tell you how I do my job,’” to give journalists much more says Lemann. “You’re inside something that happened in the real world of confidence, so they can look at a complicated subject, learn journalism that you cannot get to as a journalism student on the streets of New York.” some of the substance themselves, and learn how to communicate it The Ivy League school is also one of the leaders of the Carnegie-Knight clearly,” says Lemann. Initiative, an effort to bring the best of the academy into partnership with journalism educators. And Columbia students participate in the News “On one hand, we need to tell stories rapidly through the media; at the 21 project, demonstrating that young journalists can produce top-notch same time people want what they’ve always wanted, and that’s meaning,” specialized journalism for news outlets like the Associated Press, ABC, says Eric Newton, Knight’s vice president/Journalism Program. “Citizens “Frontline” and The New York Times. want context. Nick is producing journalists who can do it at Columbia.” 18 19 A N N U A L R E P O R T 2 0 0 6 A N N U A L R E P O R T 2 0 0 6

“Quality journalism can’t survive without consumers who can recognize, appreciate and support it.” H OW I E S C H N E I D E R Professor Stony Brook University go.knightfoundation.org/educate for a multimedia show and comments Sixty miles east of the city on Long Island, Howie Schneider, former editor- “I don’t think you can make in-chief of Newsday, is leading the way as Stony Brook University adds an educated decision unless to its journalism education mission another big experiment: educating a you know what the issues are. ” new generation of news consumers. A DA M P E C K Schneider says quality journalism can’t survive without consumers who News Literacy Student can recognize, appreciate and support it. The course, ultimately reaching Stony Brook University 10,000 Stony Brook undergrads, helps students develop what Schneider calls a new core competency for citizens in the 21st century. “Is Jon Stewart a journalist? Is Oprah Winfrey a journalist? What makes a journalist?” opposite: Stony Brook News Literacy student asks Steven Roberts presenting his views Schneider. “What makes journalism different from other kinds of information, and how do you know when you see it?” The students have seized the opportunity. “I don’t think you can make an educated decision unless you know what the issues are,” says News Literacy student Adam Peck. “If we can get an educated consumer population that can recognize the value of serious journalism, quality journalism and understand how that’s different than junk journalism, whether they’re doctors or lawyers or teachers I think News Literacy will be a crucial skill,” says Schneider. “This is a time for people who can cross the divide from the 20th century of mass media,” says Newton. “It’s a time for great optimism about the real values of journalism, the values of fairness and accuracy and truth telling. That’s what we really care about. It’s about being able to intellectually separate those from all the nostalgia, and being able to take all those great values, that great core and help move it into the new century.” 20 21 A N N U A L R E P O R T 2 0 0 6 A N N U A L R E P O R T 2 0 0 6

S T O R I E S O F T R A N S F O R M AT I O N opposite bottom: The Merce Cunningham Dance Company bottom: The Cleveland Orchestra performs at the Knight Concert Hall Arts and Culture Inspire the Soul, Serving as Economic Drivers Communities aren’t just The development of Miami’s twin-hall Performing Arts concrete and steel, asphalt Center has spurred a massive and glass. reinvestment in the city’s downtown, featuring at least 22 major construction They can just as easily be ethereal: an aria, a pas de deux, an epiphany in projects including 13,000 new a gallery. For a foundation whose mission is to build community, the arts residential units. Local wags provide a most effective glue. say the new state bird is the Art makes tangible things that are intangible. It explains things difficult construction crane. to explain. Experience tells us top-notch cultural facilities and arts organizations can help communities see themselves as part of something bigger. New arts and cultural institutions in several of Knight Foundation’s 26 communities provide not only inspiration for the soul, but are proving to be economic catalysts in community revitalization. Sitting squarely in the middle of downtown Miami’s dramatic construction boom are the twin halls of Miami’s new Carnival Center for the Performing Arts, including the 2,200-seat John S. and James L. Knight Concert Hall. go.knightfoundation.org/inspire for a multimedia show and comments Since its opening in October 2006, the center has brought to Miami world- class performers: the Cleveland Orchestra in its initial Miami residency, the Merce Cunningham Dance Company, Itzhak Perlman, Chita Rivera and Broadway’s Wicked. The center intends to serve and inspire Miami’s diverse population. “Three-quarters of us who live here were born someplace else,” says Knight President Alberto Ibargüen. “Half of us were born in another country. So you look for ways as a foundation whose purpose is to build community, to bring people together. What we decided to do is to invest heavily in situations like the performing arts center.” 22 23 A N N U A L R E P O R T 2 0 0 6 A N N U A L R E P O R T 2 0 0 6

Arts and Culture Inspire the Soul, Serving as Economic Drivers The center “puts Miami on the world map in terms of culture, in terms of entertainment and in terms of service to its community.” MICHAEL H A R DY Carnival Center CEO 24 25 A N N U A L R E P O R T 2 0 0 6 A N N U A L R E P O R T 2 0 0 6

“The community in general will benefit, the image of the city will benefit, and Northeast Ohio will benefit.” M I TC H E L L K A H A N Director, Akron Art Museum In Akron, the shimmering new John S. and James L. Knight Building rises next to the 1899 brick Akron Art Museum. The addition, designed by internationally renowned Viennese architects Coop Himmelb(l)au, opens in July. “It is an extraordinary, extravagant and innovative piece that has already gained world attention,” says museum director Mitchell Kahan. “And it is a beacon, literally, in the city because it lights up at night.” The addition’s galleries triple the amount of space for art, adding an important new destination to Akron’s downtown revival. The expansion has generated new collaborations with artistic and social service agencies, making the museum a community anchor. Programming seven days a week will encourage visitors to stay longer. “The community in general will benefit, the image of the city will benefit, and Northeast Ohio will benefit,” says Kahan. “There’s one other area that will benefit, and that’s the future of architecture, because this is a very important design that will, for years to come, draw architectural accolades opposite: Exterior views of the new Akron Art Museum from around the world.” above: Charlotte, N.C.’s, already impressive downtown is undergoing another Artist rendering of The Knight Theater, Charlotte, N.C. transformation, with construction cranes on every corner. A cultural arts campus, including a new, 1,200-seat Knight Theater, is rising adjacent to bottom: Interior of The Knight Chapel, Columbus, Ga., at a new Wachovia Bank tower. A $5 million grant supports the theater and the National Infantry Museum and Heritage Park the operating endowment for the new cultural facilities. In Columbus, Ga., local leaders are building on a culture of success and achievement by supporting a new cultural/tourist attraction at nearby Fort Benning by go.knightfoundation.org/inspire for a multimedia show and comments developing the new National Infantry Museum and Heritage Park. The Knight Chapel on the site’s World War II Street honors the Knight family’s legacy of philanthropy and military service. “Being associated with greatness, being associated with the highest level of achievement in the arts … is something that reflects well on Knight,” says Ibargüen, from a vantage overlooking the Miami horizon. “And I think it is in keeping with the aspirations of this community.” 26 27 A N N U A L R E P O R T 2 0 0 6 A N N U A L R E P O R T 2 0 0 6

S T O R I E S O F T R A N S F O R M AT I O N Newcomers Volunteer, Bonding a Carolina Community “ The more you’re involved in your community, the stronger the civic fabric becomes.” “… nonprofit agencies are out That’s Knight Foundation’s Susan Patterson talking about a big experiment developing along South Carolina’s Grand Strand, where there making a difference.” a potential gold mine of civic engagement exists in the sizable pool of retired professionals, seasonal visitors and second-home owners drawn VA L ERIE HARRINGTON by golf, sun and sand. Director, StepUp! This cluster of visitors and retirees swells Horry County’s population from 250,000 to 1.4 million during the peak season. Local leaders of this once rural – and poor – South Carolina county believe that by more effectively tapping this reservoir of talent for the greater good, transformation can go.knightfoundation.org/volunteer for a multimedia show and comments take place. “Horry County is really several different worlds,” says Patterson, Knight’s opposite top: program director for Myrtle Beach. Snowbirds and volunteers Rejeanne and Art Allarie stroll Myrtle Beach Connecting those worlds – natives, longtime residents, part-time snowbirds, opposite bottom (left to right): retirees and service-oriented college students – is the long-term goal Students Claudia Barrientos and Dayana Rodrigues work with XXXXXXXX of a Knight-funded effort in Myrtle Beach called StepUp! just getting under way. above and left: The Meese Family (Leigh, David and 3-year-old Allan) volunteer to help out Myrtle Beach resident Says Patterson: “The place we thought we would start is volunteerism.” > Rosemarie Knight 28 29 A N N U A L R E P O R T 2 0 0 6 A N N U A L R E P O R T 2 0 0 6

go.knightfoundation.org/volunteer for a multimedia show and comments left: Anna Merryman helps plant a tree bottom: Kevin Kern assists in the clean-up of the local state park opposite center: Cynthia Dyer and Rick Rickenbaker of the Waccamaw Riverkeeper opposite center: Cynthia Dyer and Hamp Shuping “Do these folks with a lot of experience, expertise and creativity in their own way continue to participate, or do they just retire to the golf course?” asks Patterson. “Our thinking is that the more you’re involved in your community, the stronger the civic fabric becomes. Increasing engagement could and likely will transform the community.” Knight funding to Coastal Carolina University helped launch StepUp! “… so much potential a coordinated effort to connect volunteers to organizations that for impact…” provide services. CHRISTINE ELLIS “We, the people who live here 24/7, know how fantastic this community Waccamaw Riverkeeper is and how many nonprofit agencies are out there making a difference,” says StepUp! director Valerie Harrington. “My favorite part of this job is connecting people to those agencies.” StepUp! targets four categories of potential volunteers: young people 18 and under, newcomers, snowbirds and residents 50 and older. The program’s television and radio public service ads have generated a dramatic increase in calls from newcomers. “Especially when a new person joins our team, they say, ‘I never realized there was so much trash, but so much potential for impact associated “Our earlier surveys indicated that it was taking five to seven years with our growth and urbanization,’ ” says Ellis. “These efforts are good for newcomers to feel connected to community,” says Harrington. education and promotion for our mission.” “Now we’re hearing from “Now we’re hearing from newcomers Art Allerie, a retired engineer from Ottawa, Ontario, has returned to Myrtle who say ‘tell me more‘tell me newcomers who say about how I Beach each year since 1999 with his wife, Rejeanne. He began volunteering can volunteer.’” I can volunteer.’” more about how by serving meals to needy families at the holidays. “You feel better that you did something for somebody,” he says. The area’s nonprofit organizations see the benefit to their work and mission. “Even if I’m not back home, I’m returning something to the local community. Christine Ellis of Waccamaw Riverkeeper headed a recent cleanup effort. It makes me feel good.” 30 31 A N N U A L R E P O R T 2 0 0 6 A N N U A L R E P O R T 2 0 0 6

S T O R I E S O F T R A N S F O R M AT I O N left (left to right): University of Akron President, Dr. Luis Proenza, Summa Health Systems’ Chief Operating Officer Tom Strauss, Akron Mayor Don Plusquellic, University Park Alliance Executive Director Ken Stapleton, and Knight Foundations’ Akron Program Officer Vivian Neal go.knightfoundation.org/collaborate for a multimedia show and comments Committed Leaders Collaborate, Leveraging Akron’s Assets “It wasn’t a place that people took “… I think we have the makings to completely reinvent the image pride in,” says University of Akron President Luis Proenza. of that entire part of our city.” DON PLUSQUELLIC He’s talking about University Park, a downtown Akron neighborhood of Mayor, City of Akron 11,500 mostly low-income residents and blighted housing for some of the school’s 24,000 students. But like other urban centers in decline at the beginning of the new century, Akron had anchor institutions like the university and its h “… it is transformational – it is ospital, Summa Health Systems. And there was another, largely unaligned an opportunity to have a true resource in town. impact on their community.” “You … have some very, very strategic thinkers, bold leaders, people who DR. LUIS PROENZA aren’t afraid to take risks,” says Ken Stapleton, executive director of the President, University of Akron University Park Alliance, which began in 2000 with a bold idea to bring those leaders together to take charge of the community’s revitalization with seed funding from Knight Foundation. Through the alliance, Proenza joined forces with other leaders – Akron’s 20-year mayor, Don Plusquellic; Thomas Strauss, head of Summa; the local With almost $3 million from Knight, the alliance’s initial collective chamber of commerce, the school board, the housing authority. A grassroots- efforts leveraged public-private investments of some $150 million up plan took shape to involve the community in the redevelopment of the in campus improvements, new infrastructure and neighborhood 40-square-block neighborhood around the twin themes of lifelong health redevelopment. Now, in a new round with investments including and lifelong learning. $10 million from Knight, the allies envision continued revitalization of the neighborhood to attract and keep talent and provide housing for “What we didn’t see was this beautiful flowering plant that was a population intent on leading growing and prospering, sending out young people that were educated, healthy, educated lives. and we weren’t really maximizing our ability to attract top young people because of the condition of the housing,” said Plusquellic. 32 33 A N N U A L R E P O R T 2 0 0 6 A N N U A L R E P O R T 2 0 0 6

“… bold leaders, people who aren’t afraid to take risks.” KEN STAPLETON Executive Director, University Park Alliance Public and private sector investments are approaching $500 million, above: Ken Stapleton visits longtime Akron resident bringing new green space, expansion of university facilities, 500 affordable, Ethyl Chambers mixed-income housing units for university and hospital employees, new opposite: businesses including spaces for artists to live and work, all attracting up to Fans cheer the University of Akron 1,000 new jobs. basketball team opposite bottom: Says Proenza: “We are impressed that developers have come to us and Polymer research conducted at University of Akron expressed an excitement that says we’d rather be involved in this kind of is important to the city’s future activity than any other.’ They’re excited because it is transformational – it below: is an opportunity to have a true impact on their community.” Neighborhood residents take advantage of the new University of Akron Student Recreation and Wellness Center New partnerships are developing. The university started a tutoring program at nearby Leggett Elementary with more than 200 college students showing up each semester to help out. And the university’s new Student Recreation and Wellness Center is open to neighborhood residents. a vision and a strong Mayor Plusquellic: “With commitment to leadership, which I think this partnership, with the support of Knight Foundation has done, and the money the city has committed … I think we have the makings to completely reinvent the image of that entire part of our city.” go.knightfoundation.org/collaborate for a multimedia show and comments “One day I’ll see my grandchildren walk in to the University of Akron. I will be in one of those mixed housing town homes, walking to the stadium, walking to retail and still having lifelong learning activities,” said Vivian Celeste Neal, Knight’s Akron program director. “I’ll be able to do all my lap swimming, exercising, all right there, then if I want to take a course, I’m on the college campus. It’s a way for everybody to win.” 34 35 A N N U A L R E P O R T 2 0 0 6 A N N U A L R E P O R T 2 0 0 6

P R O G R A M U P D AT E : J O U R N A L I S M When the Knight “The capacity to search won’t satisfy humanity’s quest for M A J O R G R A N T S F R O M 2 0 0 6 A N D E A R LY 2 0 0 7 > Teams of top newspaper editors and their web site knowledge if the content available isn’t informed by the gurus gathered at the inaugural leadership seminar of brothers owned rigor of inquiry that resides at the core of journalism’s the Knight New Media Center, hosted at the University of > The Knight News Challenge is awarding $12 million to standards and ethics.” community news experiments worldwide. Recipients Southern California. The editors, from cities like Atlanta, newspapers, in the words of Jack include MIT, one of the nation’s top technology schools, Austin, Boston, Des Moines and Miami, used the time Almost everything about journalism is changing, which will develop a new generation of news devices; and and advice from technologists, trainers and new product Knight, they worked to “bestir the people into an awareness from who provides the news to what form it takes, from MTV, a top American television network that will use specialists to make concrete plans for reinventing their of their own condition, provide inspiration for their thoughts how it is delivered to the new activist role of the people hand-held devices to cover and distribute news about the newsrooms to be 24/7 operations, creating things like and rouse them to pursue their true interests.” formerly known as the audience. But one element can’t 2008 presidential campaign. In addition, one of the “web-first publication” and “continuous news desks.” change: the fair, accurate, contextual search for the truth. country’s top young newspaper programmers will use his Today, a stunning array of hand-held devices is turning life million-dollar prize to develop “mash-ups” in a dozen > We Media Miami brought 300 online journalists, into a guided tour. But the question remains: Who are the Knight Foundation’s grants help teach the journalists of American cities allowing citizens to find all the public entrepreneurs, communications thinkers, social philoso- guides? Who digs for the facts and sticks to the facts that today and tomorrow how to transform newsrooms to do in information that’s online about themselves, sorted by phers and interested individuals to the University of rouse us to pursue our true interests? the 21st century what Jack and Jim Knight’s newspapers address. (see page 14). Miami for a discussion of how “connected societies” can did in the 20th. We help press freedom and freedom of and should function (see page 10). There, we announced Those would be journalists, says Knight Foundation Trustee information grow worldwide by demonstrating the value that the foundation’s network of endowed chairs, already > News University, our online journalism training project Paul Steiger, The Wall Street Journal’s managing editor. of good journalism as the oxygen of democracy. And we the nation’s largest, had reached 22, with the creation at the Poynter Institute, now has 40,000 journalists and help create new forms of news in the public interest, the students enrolled for its more than 50 classes, making it of the Knight Center for International Media at the “Even with the incredible search abilities that exist on the news all citizens need to be good citizens. the largest project ever to teach and train journalists online. University of Miami, home to two Knight Chairs in web today, it is difficult to find a reliable and comprehensive “Thank God for NewsU,” said a journalist from Kenya. “This Journalism, one focusing on visual media, the other on analysis of a complicated issue,” Steiger writes in an edition is the best training our bureau has ever had.” cross-cultural communication. (Earlier in the year, we of the Nieman Reports entitled “Goodbye Guttenberg.” announced the creation of the Knight Chair in Scholastic Journalism at Kent State.) Knight Chairs, already teaching > In 2006, a new grant added a new web site – the Knight thousands of students, are beginning to dramatically Citizen News Network – a place where citizen journalists increase their professional outreach through their own are carrying on a “conversation” about the values and dynamic web sites. > ethics of journalism. KCNN (www.kcnn.org) is produced by J-Lab, which is part of the new Knight Institute for the Future of Journalism at the University of Maryland. Milestones 2006 JANUARY FEBRUARY Community journalism practitioners gather in Anniston, Ala., for a national News in a New America, Backed by a poll that shows Americans believe The Reporters Committee for Freedom summit coinciding with the launch of author Sally Lehrman’s thought- academics should be college athletes’ top priority, the of the Press receives a $2.5 million the new Knight Community Journalism provoking analysis of the diversity Knight Commission on Intercollegiate Athletics hosts challenge grant. The Reporters Fellows Program. The University of of American news coverage and its first Summit on the Collegiate Athlete Experience in Committee provides legal defense and Alabama masters program uses the newsrooms, debuts. Washington, D.C. Below, Scottie Reynolds, now a freshman advocacy services to journalists working resources of The Anniston Star as a guard for the Villanova men’s basketball team (left) in the United States. teaching newspaper. and former Notre Dame MVP Ruth Riley of the WNBA’s Detroit Shock spoke at the summit. The Immigration Funders Network, a group The Knight Grand Jury Prizes are of national funders interested in the impact of Up to 3,000 children in the Twin Cities announced to honor the top filmmakers immigration on children and families, gathers in hope to benefit through improved dental in the Miami International Film Festival, Miami. Above, Ismael Ahmed, executive director health from a $1.1 million grant to with cash awards honoring top work in of the Arab Community Center for Economic and Greater Twin Cities United Way through dramatic features and documentary films. Social Services (ACCESS), a Knight grantee in Bright Smiles and the Partnership for Dearborn, Mich., speaks at the gathering. Improving Children’s Oral Health. 36 37 A N N U A L R E P O R T 2 0 0 6 A N N U A L R E P O R T 2 0 0 6

J O U R N A L IO G R A MOU P D ATS : J O U R N A L I S M PR SM PR GRAM E These current, and > A high school campaign to teach the First Amendment > The Carnegie-Knight Initiative for the Future of Journalism > Sunshine Week 2007 was an extraordinary success. An launched in early 2007 with new partner Channel One, Education, including leading deans like Columbia’s Nick estimated 50 million Americans were reached with stories varied, programs which reaches some 7 million secondary school students. Lemann (see page 18), oversaw the first year of its News of how citizens use freedom of information laws to get what The “1 Voice” campaign features lesson plans and PSAs that 21 project, where top students from key journalism schools they need to know from their government. More than 2,000 foreshadow our add to the network’s normal coverage of First Amendment demonstrated that they could do investigative stories on news stories, cartoons, columns and editorials, more than issues. This project has resulted in a substantial increase work ahead. There are many others, a complex subject (Homeland Security and Liberty) that 2,000 blog entries, more than 1,000 television and radio – from 50 to 70 percent – of students reporting they are would be good enough to be picked up by the nation’s public service announcements appeared. This campaign, receiving First Amendment teaching in at least one class. too many to detail here – but you can find them on our web leading news organizations – from Forbes to CNN to The coordinated by the American Society of Newspaper Editors, Students themselves did the PSAs. site (www.knightfdn.org). Like America’s newspapers, we New York Times and the Associated Press. And at the involved dozens of groups, from the Radio and Television are learning how to operate complementary print and same time, the students also delivered those same stories News Directors Association to the League of Women > On the college level, a major new grant to the Stony online editions. In our increasing web presence, we will directly to the public on the anniversary of the 9/11 terrorist Voters. Sunshine Week was endowed in 2006 with a $3.4 Brook campus of the New York state university system seek, as the Journal’s Steiger does, to provide what attacks through innovative web sites. million challenge grant to create a Knight First Amendment will make possible the nation’s first collegewide class journalists do best: “Compelling narratives, investigations, Fund. Sunshine Week is important because more than in News Literacy (see page 20). Some 10,000 students explanations, trend-spotters, context, exclusive interviews 600 laws nationwide have been approved since the 9/11 > Knight Foundation concluded a four-year Newsroom will take the course over the next four years. The hope is … ‘scoops of fact’ and ‘scoops of ideas.’” attacks to restrict public information. This year, a national Training Initiative, reaching some 50,000 journalists and that this course will make these students wiser, smarter survey showed that 70 percent of the public believes its helping encourage a third of the nation’s newsrooms to consumers of news – and that the impact will result in the In the coming year, for example, the Knight News Challenge government has become too secretive. In addition, the first increase their training budgets. Our Tomorrow’s Workforce course spreading to other universities nationwide. winners and our leading grantees and Knight alumni will Knight Open Government Survey revealed that 80 percent project at Northwestern University co-published and bring their facts and ideas into online conversations aimed of federal government agencies were not obeying the 10- launched News Improved, a book explaining the lessons at exploring how great journalism can survive and thrive in year-old electronic Freedom of Information Act. of that initiative: Newsrooms can adapt if they embark on this century. We hope to see you there. programs of strategic training. go.knightfoundation.org/journalism2006 to comment Milestones APRIL MARCH Grassroots organizations get $170,000 J-Lab announces 10 news experiments in the from the American Dream Fund to help New Voices campaign, which recognizes the need immigrant communities participate in The Western Knight Center at to serve communities with hyperlocal information rebuilding efforts in Biloxi, Miss., after the University of Southern California and cutting-edge technology. Hurricane Katrina. and the University of California-Berkeley becomes the Knight New Media Center to help America’s journalists adapt to rapid News University celebrates its first anniversary. change, and to advance news values in By year’s end, nearly 40,000 users had registered the digital age. at the site, making it the leading online learning destination of journalists worldwide. As Sunshine Week 2006 opens, a new Middle school student poll says more than six in 10 Americans Dasylleka Brown spent an Knight Ridder, the company founded by believe that “public access to government April 2006 weekend planting Jack and Jim Knight, is sold to McClatchy Co. In a speech before the American Society records is critical to the functioning of a garden at Alcorn Middle Their private foundation remains committed of Newspaper Editors in Seattle, Harvard good government.” Ben Sargent of the School in Columbia, S.C. to supporting journalism and free speech, Malcolm Moran is named the University’s Knight Visiting Lecturer Austin American-Statesman joined scores She and her classmates and to building strong communities in the Knight Chair in Sports Journalism John Carroll says the newspaper industry of his editorial cartoonist colleagues in planted the garden to benefit cities and towns where the Knight brothers and Society at the College of should seek out new ownership models, and producing Sunshine Week commentaries. the Eau Claire neighborhood. operated newspapers. Communications at Pennsylvania calls on editors to be bold and help restore State University. newspapers’ value and meaning. 38 39 A N N U A L R E P O R T 2 0 0 6 A N N U A L R E P O R T 2 0 0 6

C O M M UP R O I E SA P RU P D AT ES C O M M U N I T I E S NIT GR M OGRAM : The 26 places we philanthropic interests play out as an opportunity for each contributed $2 million to the overall $35 million needed TOWA R D S T R O N G E R R E G I O N A L E CO N O M I E S locale to identify trends and big ideas that could lead to for the second phase. call the Knight transformational change. Two key Knight communities – Akron and Detroit – have An example of one of the Fund’s grantees is BioEnterprise, a concluded that regional economic development is their communities couldn’t Knight Foundation’s broad funding interests seek to business, recruitment and acceleration initiative designed best strategy for growing beyond their manufacturing be more different. improve the vitality of community life through grants and to foster the growth of the region’s bioscience companies. past. The foundation is participating in large regional investments addressing children and families, education, BioEnterprise has 11 client companies in Summit County initiatives in Northeast Ohio and Southeast Michigan led Our workdays begin with an Atlantic sunrise on Myrtle civic engagement, housing and community development, employing 320 people. The firms have added 90 new jobs by philanthropic collaboratives. Beach’s Grand Strand and end as the sun slips into the economic development, and arts and culture. in the past year and have attracted more than $15 million Pacific off Long Beach. The prairie tableaus of Aberdeen in investment financing. Both are born out of a rock-hard realization that deep and Grand Forks are far removed from the teeming In our current efforts and in the work ahead, the foundation’s change is needed. As Detroit Mayor Kwame Kilpatrick downtown sidewalks of Detroit and Miami. The view from grant dollars and other resources are helping leaders Other regions across the nation look to the Fund’s playbook says, “Detroit will either transform or die.” a Philadelphia office tower can be just as impressive as develop powerful ideas to deal with real issues. Knight for inspiration, including Southeast Michigan. There, Knight’s Boulder’s Rocky Mountain vista. Foundation’s community-based program directors are the commitment of $10 million joins other funders includ- The defining characteristic of both is aiming to change the first point of contact for conversations about those ideas nature of each regional economy over time, moving from ing The Ford, Kellogg, Skillman, and Hudson-Webber These cities and towns are a random collection except (visit www.knightfdn.org, and read more in How to Apply traditional manufacturing to knowledge-based innovation. foundations and the Community Foundation of Southeast when clustered serendipitously as the 26 places where on page 49). Michigan in the New Economy Initiative, a potentially $100 Jack and Jim Knight, 20th century newspaper owners, Since 2004, The Fund for our Economic Future has focused million commitment to speed the seven-county region’s demonstrated their passion for community. Searching for potentially transformational ideas takes on Akron, Cleveland and 16 counties of Northeast Ohio. transformation to a knowledge-based, entrepreneurial, leadership, bold partners willing to buy in and accept In the first phase, backed by $30 million from 85 of the creative economy. The initiative will follow an economic In their business approach, the Knight brothers respected risks, and time to let ideas develop until they arrive at region’s entities including Knight, the Fund has engaged growth strategy developed by Detroit Renaissance, the the uniqueness of each community. Each has a distinct a tipping point. A sampling of projects and initiatives more than 20,000 citizens in defining economic priorities; leading regional CEO organization. The collaborators will narrative, a story inextricably tied to people and geography, under way in Knight communities through 2006 and early successfully developed and tested a model including a fund efforts to move from a culture of entitlement to one to history and economy, to culture and leadership. Through 2007 demonstrates the power of collective action for the dashboard of economic indicators; and made grants of $18 of lifelong learning and entrepreneurship. > the foundation’s Communities Program, the founders’ greater good: million to fuel jobs, training and collaboration. Knight has Milestones MAY JUNE R. Gerald Turner and Clifton R. Wharton Jr. are named co-chairmen of the Knight Commission on Intercollegiate Athletics. Knight Foundation reaches $1 billion in total grants since its inception in 1950. Julie Tarr, who has served as program director for Philadelphia and State College, is named New trustees at Knight: South Florida-based evaluation director of the foundation. financiers Earl W. Powell, chairman and CEO of Trivest Partners L.P.; E. Roe Stamps IV, Knight partners with Living Cities and the founding managing partner of Summit Partners Mississippi Development Authority to help in Boston; and Paul Steiger, vice president of rebuild the Hurricane Katrina-battered Dow Jones & Co. and managing editor of The East Biloxi, the city’s oldest and most Knight program staff and executives Wall Street Journal. culturally diverse neighborhood. A $250,000 visit Cambridge, Mass., to take part The Online Journalism Awards add grant funds an East Biloxi action plan and in a series of workshops organized the Knight Award for Public Service, revitalization strategy. by New Profit Inc., focusing on A $1.25 million grant to the Columbia a $5,000 award recognizing the use of digital social entrepreneurship. University Graduate School of Journalism techniques and public information to produce establishes the Knight Case Studies compelling journalistic coverage and engage Initiative to promote journalism leadership. a geographic community. 40 41 A N N U A L R E P O R T 2 0 0 6 A N N U A L R E P O R T 2 0 0 6

C O M M UP R O I E SA P RU P D AT ES C O M M U N I T I E S NIT GR M OGRAM : OPPORTUNITY FOR CHILDREN AND FAMILIES THE POWER OF ARTS AND CULTURE – AND TOURISM supporting the renovation of a museum honoring its most H O U S I N G A N D CO M M U N I T Y D E V E LO P M E N T famous son. When completed with help from a $500,000 Wichita, Ka., is the Air Capital of the World, where 70 percent In addition to Miami’s Knight Concert Hall and the stunning Knight grant, the Ben Franklin Underground Museum St. Paul Mayor Chris Coleman has urged his residents of the nation’s general aviation aircraft are produced. The addition to the Akron Art Museum (see page 18), two other intends to be on par with the best biographical museums to think big, to join in becoming “the most livable city in state’s largest city takes pride in its Midwestern work ethic, can-do Knight communities recognize that the arts help in the world. America.” Many residents appreciate living in this big city its quality of life, its affordability and its easy commutes. drive the economy. with a small-town feel, yet are mindful that all residents regardless of income or status should enjoy and share in But a projected shortage of skilled workers and engineers Charlotte, N.C.’s, already impressive downtown is undergoing its generally high quality of life. C I V I C E N GAG E M E N T threatens the technical base that is the foundation of another construction boom. A cultural arts campus is Wichita’s manufacturing economy and one-fifth of the city’s rising adjacent to a new Wachovia Bank tower, including Since 2003, Knight Foundation has been a key partner in Miami, Florida’s community narrative is diversity. Three- jobs. Ensuring that today’s young people have the skills a 1,200-seat Knight Theater. A $5 million grant supports Payne-Lake Community Partners, a comprehensive and quarters of us who live in Knight Foundation’s home they need to be successful in Wichita’s economy is a theater and the operating endowment for the new cultural integrated approach to housing and community development community were born someplace else; half of us were challenge and an opportunity for Knight Foundation. facilities. In Columbus, Ga., local leaders are building on targeting the city’s diverse East Side as well as Lake Street born in another country. a culture of success and achievement by supporting a in Minneapolis. The public/private partnership is knitting Community leaders have committed to scaling up promising new cultural/tourist attraction at nearby Fort Benning by together small business development, workforce development We’ve begun to identify and support ways to grow a new approaches to early childhood education and closing developing the new National Infantry Museum and Heritage and affordable housing to build mixed-income, multicultural generation of multicultural leaders, especially in the the achievement gap. Knight has joined in funding The Park. The Knight Chapel on the site’s World War II Street communities that work. A key lesson coming out of this nonprofit sector, to serve Miami’s diverse populations Opportunity Project, a potential model for a statewide honors the Knight family’s legacy of philanthropy and work is the importance of engaging the community and in the future. Knight has provided recent support of $1 universal pre-kindergarten program that teaches social embracing the diverse cultures that live and conduct million for the Miami Fellows, an outstanding leadership military service. and emotional learning skills to 80 percent of the city’s business along the corridor. development program that has assembled four classes of big idea or 3- and 4-year-olds attending public and private early young professionals. The program exposes them over two And is Philadelphia the Next Great American City? Philly learning centers. If you think you can contribute a years to top local leaders and community issues, helping is a walkable, manageable big city with great colleges them prepare for leadership in the business, public and and a thriving downtown. Leaders there are engaged identify an opportunity like these in the next stage of our private sectors. Knight’s grant will help the program in a long-range plan to transform the city into an work in the 26 Knight communities, find out how in “How to become self-sustaining. internationally competitive tourist destination by better Apply,” on page 49. using Philadelphia’s rich historic and cultural assets. Knight is joining the effort to grow heritage tourism by go.knightfoundation.org/communities2006 to comment Milestones J U LY AUGUST SEPTEMBER Four grassroots organizations receive $200,000 Global Voices Online wins the $10,000 grand in an effort to help immigrant integration efforts prize in the Knight-Batten Innovations Awards. In Lexington, Ky., three girls consult during in Georgia and Akron, Ohio. The web site connects bloggers from 130 a competition for the Countywide Academic countries to readers around the world Challenge Superintendent’s Cup, organized At the National Press Club in by Knight grantees One Community, One Washington, D.C., the foundation Voice and the Fayette County Public Schools. launches the Knight News Challenge, Top-notch investigative journalism appears in a contest open to anyone, anywhere The New York Times, on Frontline and elsewhere, Knight trustees and staff travel to Detroit for using digital technology to connect produced by a cadre of News 21 fellows – graduate a board meeting and site visits to the city’s people in the real world. Up to $25 students from respected universities working on a riverfront and downtown neighborhoods and million will fund the experiments over project aiming to transform the way the nation’s top for conversations with local leaders. the next five years. journalism schools teach the craft. Miami’s new state-of-the-art Building on its nationally recognized Paula Lynn Ellis is named performing arts center unveils scholastic journalism program, Kent State to a new position of Vice a new name for one of its two main University becomes home to a new Knight President/National and venues: the 2,200-seat John S. and Chair in Scholastic Journalism with the New Initiatives. James L. Knight Concert Hall. help of a $2 million grant. 42 43 A N N U A L R E P O R T 2 0 0 6 A N N U A L R E P O R T 2 0 0 6

C O M M UP R O I E SA P RU P D AT ES N AT I O N A L NIT GR M OGRAM : What sets social fostering economic growth. The working titles for a couple The network is growing, and joining it are supporters approach to our grant making. Over the next three years, of the Tallahassee initiative suggest a distinctively creative interested in building capital markets to finance social Ashoka will select 15 promising social entrepreneurs from entrepreneurs apart approach: Greenovation and Jump Start Plan X. enterprises; experts in talent development, and a wide the Knight communities as Fellows, providing them with range of policy wonks and politicians who see the power living stipends, professional support and access to a from others? these citizen activists are unleashing. global network of peers. K N I G H T CO M M I SS I O N O N The New Profit leaders’ gathering comes to Miami in I N T E R CO L L E G I AT E AT H L E T I C S Such social entrepreneurs are a breed apart. They put St. Paul’s Steven Clift coined a term way back in 1994 – 2008. Building on that, Ashoka will partner next year with social benefit ahead of gain. The New York Times calls “e-democracy” – a way of using the Internet to generate New Profit and Echoing Green, another leading social The Knight Commission on Intercollegiate Athletics continues them “Do-Gooders with Spreadsheets.” Trabian Shorters, citizen participation in the electoral process. A thriving entrepreneur organization, to produce a high-profile Miami to wield influence nearly two decades since its founding, Ashoka’s U.S. co-director, says they “combine the risk democracy, he says and believes, depends on local conference on social innovation. driving a reform agenda for college sports that emphasizes and passion of a business entrepreneur with a passionate interaction, but today’s lifestyles threaten the concept of academic values in an arena where commercialization often social mission to create systemic change.” They “want to civic space. Through E-democracy.org, Clift offers 2,750 overshadows the underlying goals of higher education. solve a problem once, not over and over again.” regulars an online network of town hall opportunities. C R E AT I V E CO M M U N I T I E S I N I T I AT I V E The pressures are enormous, and yet through the And as we continue to seek and develop truly transformative The combination of Clift’s businesslike zeal and passionate commission’s persistent work, the NCAA has implemented Social entrepreneurs are also a key part of what noted ideas in Knight Foundation’s national programs and social mission pursued over a dozen years caught a “one-plus-three” approach to governing college sports, and controversial urbanist Richard Florida has dubbed new initiatives, we know this: To succeed, we’ll need to the attention of Ashoka, the oldest and largest global in which college presidents work to ensure academic “the creative class.” Driving community prosperity and recognize and reward innovative and system-changing enterprise supporting social entrepreneurs. Since 1981, integrity, financial integrity and independent certification. increased quality of life, Florida posits, are a new class of approaches constantly, wherever we find them. more than 1,800 leading social entrepreneurs have been And 2007 is the year that long-needed minimum standards workers drawn to “four T’s” – talent, technology, tolerance and elected as Ashoka Fellows. Clift, a first-year winner of the take effect for progress toward graduation for participants territory assets. And communities that will grow, he says, are Each February, you can find an impassioned crowd of Knight News Challenge, was inducted into the ranks of in the major sports along with penalties for failing to meet those taking greatest advantage of their creative, energetic seasoned social entrepreneurs mingling and learning with Ashoka Fellows in November 2006. “This is a very big the standards. new residents. Florida’s ideas are put to the test in the new newcomers in the Catskills at New Profit Inc.’s Gathering of deal,” his web site says. Knight Creative Communities Initiative, now under way Leaders. The 2007 get-together brought 143 participants to To prove the enduring need for an independent voice, in Tallahassee, Fla.; Charlotte, N.C.; and Duluth, Minn./ the Mohonk Mountain House for the third year in a row, in Ashoka’s ability to select and cultivate promising social half of the field of 16 teams participating on the biggest Superior, Wis. In each community, the initiative is combining the belief that by giving people committed to social change entrepreneurs makes them a timely partner as Knight stage for college basketball – the 2007 NCAA men’s research, training and dialogue to develop a community a way to connect, networks will form and a transformational Foundation seeks to incorporate a social entrepreneurial basketball tournament – failed to achieve the required vision and an accompanying set of initiatives aimed at change will snowball. (see page 12). Milestones DECEMBER OCTOBER The University of Maryland announces it will Stony Brook University and Knight name its new state-of-the-art journalism building announce a News Literacy program John S. and James L. Knight Hall, the future home designed to teach students how to judge Arts United of Greater Fort Wayne of the Merrill College of Journalism and a number the reliability and credibility of news. receives $750,000 over three years to of Knight-funded programs. The $1.7 million, first-of-its-kind program help diverse nonprofit groups develop, is aimed at teaching 10,000 students over produce and present arts and cultural four years. activities for the “New Hoosiers” – the immigrant communities of southeast Fort Wayne. The Search for Shining Eyes, a new book by arts U.S. high school students know more about the Knight makes multimillion-dollar investments in two consultant Thomas Wolf, addresses Knight Foundation’s First Amendment than they did two years ago high-profile projects in its historic home community of decade-long symphony orchestra initiative, the Magic of but they are increasingly polarized in how they Akron: $10 million for the University of Akron and the Music, which inspired frank and open discussions about feel about it, according to an update of Knight’s city’s University Park Alliance community development the financial and attendance crises faced by American groundbreaking survey. And U.S. high schoolers say project; and additional funding that names the new, orchestras and explored ways to help solve them. Georgetown University President they are getting most of their news from Internet state-of-the art addition to the Akron Art Museum in John J. DeGioia joins the Knight Commission portals and mainstream media web sites. honor of the Knight brothers. on Intercollegiate Athletics. 44 45 A N N U A L R E P O R T 2 0 0 6 A N N U A L R E P O R T 2 0 0 6

C O M M UP R O I E SA P RU P D AT ES N AT I O N A L NIT GR M OGRAM : and businesspeople. Helping in that work in Fort Wayne Yet access across those communities isn’t universal, minimum graduation rate. Despite building pressure from adopted strategic plan also promises that Living Cities will are two recipients of grants from Knight’s American available or affordable for everyone – yet. basketball coaches, some of whom could be subject to more aggressively advocate for government policies that Dream Fund: The African Immigrants Social and Economic penalties unless their teams’ graduation scores improve, catalyze investments in cities. Development Agency, which has been providing a civic Knight Foundation has teamed with One Economy, Intel and the commission will continue to say the reforms are in education program; and Catholic Charities of the Diocese other partners to help Knight communities understand the the best interests of higher education and should not The Living Cities funding partners, comprised of Knight of Fort Wayne, which has expanded its immigration program opportunity municipal wireless presents, and their readiness be weakened. and several of the nation’s leading foundations, share a to serve more low-income clients. for it. As part of the Knight Wireless Communities Initiative, common vision of thriving American cities that are built on the foundation held a series of webinars in 2006 to connect healthy, regionally connected neighborhoods. In October, the commission plans a summit with college participants in Knight communities on the subject. faculty, incorporating the results of a survey of faculty atti- The American Dream Fund is having an impact through- tudes and opinions about academic integrity in college sports. Living Cities played a vital role in 2006 in helping Hurricane out the Knight communities. In Biloxi, Miss., grassroots Some jumped right in. In Milledgeville, Knight’s smallest Katrina-battered Biloxi, Miss., develop a comprehensive organizations received $170,000 to help Vietnamese community, we provided a $15,000 grant to One Economy plan for redeveloping the important, traditionally low- immigrant communities participate in rebuilding efforts to help city leaders bid for, then land more than $800,000 in income neighborhoods of East Biloxi. after Hurricane Katrina. I M M I G R AT ION INITIATIVE funding for wireless through a competitive grant program of the Georgia Technology Authority. Other Knight communities, Cities and towns all across America continue to experience among them Detroit, Grand Forks and Broward County, Fla., the largest immigrant boom since the last century. LIVING CITIES W I R E L E SS CO M M U N I T I E S I N I T I AT I V E are taking steps to develop wireless systems. Newcomers are coming from an even wider range of nations and settling in nontraditional immigrant gateway cities. Change is constant and Living Cities, one of the nation’s Municipal wireless technology is becoming so widespread, The work ahead is enduring philanthropic collaborations, now some 15 years it’s being called “the fifth utility.” Done correctly, it provides One such place is Fort Wayne, Ind., whose southeast old, is revamping its approach to urban revitalization because connection to the web and vital information citizens need to ambitious and risky. neighborhoods are now home to one of the largest of broad shifts in the community development field. Building live their lives. More than 500 communities across America Sudanese populations outside of Africa, including many on its core know-how of bundling government, private and are actively exploring community wireless initiatives, and One refugees from the conflict in Darfur. Effectively integrating philanthropic investments to provide housing in high-risk Economy’s Marshall Runkle calls 2007 “the year the rubber But given this technology’s ability to connect all citizens to these “New Hoosiers” and easing their experience in the areas, the funders’ collaborative will expand its focus to meets the road” – when communities like Philadelphia and vital information, coupled with the foundation’s advantage American Midwest is both a challenge and an opportunity. include health, education, work-force and environment San Francisco expect to roll out full-scale wireless systems. as a national funder with local roots, why shouldn’t we aspire Knight Foundation continues to support a national initiative issues – all critical to community well-being. To do so it will to make universal access to wireless a reality in all Knight to help immigrants who seek an active role in Knight form new alliances with funders and service providers. It will communities within five years? communities like Fort Wayne legally pursue citizenship, explore new financial investment tools and look to spread Milestones eventually becoming voters and volunteers, home owners the knowledge it is accumulating more effectively. The newly go.knightfoundation.org/communities2006 to comment DECEMBER DECEMBER Knight invests $1 million in the United Way of the Midlands, serving Columbia, S.C., to help the organization attract young donors in A $1 million grant will support construction the 25- to 45-year-old age bracket of the new National Infantry Museum and and respond to urgent needs. Heritage Park near Columbus, Ga. The chapel on the site’s World War II Street will be named Knight Chapel in honor of the Knight family’s legacy of philanthropy and military service. Knight and Channel One, a provider of news and information to more than seven million middle and high schoolers, Charlotte, N.C.’s, Campaign for Cultural announce a national campaign to help Facilities receives a $5 million grant to support U.S. teens understand and appreciate the operating endowment for new cultural The foundation ends the year with the freedoms guaranteed them by the facilities including a 1,200-seat theater to be assets of $2.25 billion. First Amendment. named for the Knight brothers. 46 47 A N N U A L R E P O R T 2 0 0 6 A N N U A L R E P O R T 2 0 0 6

C O M M UG R T I ET S PO V EG R A E W NIAN S RO RVI MS H O W T O A P P LY Are you a visionary leader? Listed below are $73,799,294 in new grants approved several years. The net effect of these past and future during 2006 by the John S. and James L. Knight commitments is that during 2006, the foundation Foundation. Some of these grants, as well as those actually disbursed $104,310,919. For a complete list of Do you have a transformational idea? approved in past years, are disbursed over a period of 2006 grants, go to www.knightfdn.org. 2006 Grants approved By the John S. and James L. Knight Foundation We’ve emphasized the role of leadership in this annual We think the ideal transformational grant: PROGRAM NUMBER OF GRANTS AMOUNT report because we believe every transformational grant > Has the potential to create systemic change, affecting an idea must benefit from the visionary leadership of an underlying system or structure by addressing root causes. COMMUNITIES PROGRAM articulate and charismatic individual or team. The photo Systems change often requires innovation and discovery, Civic Engagement/Positive Human Relations 11 $ 3,242,000 essays, the program narratives and the multimedia stories and always aspires to enduring, sustainable change. Community Foundations Initiatives 2 900,000 on our web site all illustrate that point. Economic Development 11 2,782,000 > Enjoys or will likely enjoy broad support, manifested through Education 3 359,500 the collaboration of multiple community stakeholders, and Like those leaders, we passionately believe things can Housing and Community Development 11 15,308,000 will magnify awareness of an issue. be better. Knight Foundation’s twin missions are to Vitality of Cultural Life 12 15,710,000 seed and inspire great journalism everywhere, and to > Is either at the scale of the problem it attempts to address Well-being of Children and Families 12 5,700,600 build strong communities in the cities and towns where or is scalable, replicable, or part of a phased approach. Other Community Priorities 3 720,000 our founders publish newspapers. Subtotal: 65 grants $ 44,722,100 Successful transformational ideas: As a national foundation with local roots, we seek opportunities JOURNALISM PROGRAM that can transform both communities and journalism, > Will have visionary leadership, will be carried out by a Electronic/New Media/News in the Public Interest 15 $ 6,080,000 and help them reach their highest potential. We believe capable team working through a strong network of support, Journalism Training and Education 10 7,788,000 nothing big happens without a big idea. nNothing new will build on a feasible execution plan and will use an News and Newsroom Diversity 4 850,000 without a new idea. In every project we fund, the idea approach, whether innovative or best practice, appropriate Press Freedom and Freedom of Information 11 7,153,750 comes first. to the context. Subtotal: 40 grants $ 21,871,750 > Will present an appropriate level of risk. Every day, we ask ourselves and our partners, “Is this truly transformational?” NATIONAL AND NEW INITIATIVES Every successful project or initiative we’ve launched in the Civic Engagement and Positive Human Relations 7 $ 5,720,000 past has had an abundance of those elements. If you believe We seek leaders who ask the same question, identify the Well-being of Children and Families 2 265,000 your grant opportunity fits, we want to hear from you. best opportunities, acknowledge risk, and turn the big Subtotal: 9 grants $ 5,985,000 ideas into action. The first step is to contact the appropriate program director OTHER for your community or your programmatic interests in Civic Engagement 1 $ 15,000 journalism. A simple way to find out more about our Community Priorities 19 575,075 programs is to visit our web site’s Letter of Inquiry section Journalism 1 5,000 for a self-guided tour: Education 1 5,000 Vitality of Cultural Life 1 140,869 Well-being of Children and Families 1 9,500 Trustees-Recommended Grants 53 470,000 Subtotal: 77 grants $ 1,220,444 GRAND TOTAL 191 grants $73,799,294 go.knightfoundation.org/2006grants to comment go.knightfoundation.org/apply to comment 48 49 A N N U A L R E P O R T 2 0 0 6 A N N U A L R E P O R T 2 0 0 6

C O M M UT R U I E S E S O G R A M S NITSTE PR S TA F F (as of May 1, 2007) PRESIDENT’S OFFICE I N FO R M AT I O N T E C H N O LO G Y Polly M. Talen Program Director for Duluth and St. Paul Alberto Ibargüen Jorge Martinez President Laura Williams Director of Information Systems Program Director for Lexington Liset Huff Albert Santaballa Executive Assistant to the President Stefanie Posteraro Programming/Analyst Program Assistant Paul Pavon PROGRAMS Technical Support Specialist Journalism Program Cesar L. Alvarez W. Gerald Austen, M.D. Robert W. Briggs Mary Sue Coleman Marjorie Knight Crane Trustee and daughter of President and Honorary Trustee and Executive Director President National and New Programs The GAR Foundation University of Michigan – Ann Arbor James L. Knight Chief Executive Officer Surgeon-in-Chief, Emeritus FINANCE Eric Newton Greenberg Traurig Massachusetts General Hospital Charlotte, N.C Vice President/Journalism Program Paula Lynn Ellis Juan J. Martinez Vice President/National and New Initiatives Gary Kebbel Vice President/CFO and Treasurer Journalism Program Officer Julie E. Tarr William Nichols Director of Evaluation and Denise Tom Program Director for State College Investment Officer Journalism Program Specialist Damian Thorman Elena Stetsenko Sara Rosado National Program Officer Controller Executive Assistant/Journalism Bronwyn Mills Lia Martinez Hannah Bae Program Assistant Accounting Manager Journalism Intern James N. Crutchfield Paul S. Grogan Alberto Ibargüen Rolfe Neill Mariam C. Noland Kevin Christian Director of Student Media and President President and CEO Former Publisher President Communities Program Accounting Assistant The Boston Foundation John S. and James L. Knight The Charlotte Observer Community Foundation of Professor of Journalism G R A N T A D M I N I S T R AT I O N Arizona State University Foundation Southeastern Michigan Beverly Jemmott Michael Maidenberg Accounting/Investment Assistant Julie B.A. Brooks Vice President/Communities Program Grants Manager Meredith Hector C O M M U N I C AT I O N S Sandra Gross Assistant to the Vice President/Communities Program Grants Assistant Jo Laverde Larry Meyer Marcia Brod Executive Assistant/Communities Program Vice President/Communications Program Assistant and Secretary Matt Bergheiser Marc Fest Program Director for Philadelphia A D M I N I S T R AT I O N Director of Communications Beverly Blake Beverly Knight Olson Earl W. Powell John W. Rogers Jr. E. Roe Stamps IV Paul Steiger Robertson Adams Program Director for Georgia Belinda Turner Lawrence Trustee and daughter of Chairman Chairman and CEO Founding Managing Partner Managing Editor Communications Associate – Webmaster Vice President/Chief Administrative Officer James L. Knight Trivest Partners L.P. Ariel Capital Management LLC Summit Partners Wall Street Journal Anne Corriston Macon, Ga. Jose Zamora Program Director for Aberdeen, Grand Forks and Wichita Tom Pitmon Communications Assistant Workforce Performance and Development Manager Lorenzo Lebrija Program Director for Miami Susan L. Gomez C O M M U N IF IIC E RP R O G R A M S OF T ES S Manager of Administrative Services Adele Lyons Program Director for Biloxi Elika Lopez Human Resources Executive Assistant Vivian Celeste Neal Juan J. Martinez W. Gerald Austen, M.D. Paula Lynn Ellis Program Director for Akron and Fort Wayne Reba N. Sawyer Vice President/CFO and Treasurer Chairman Vice President/National and Receptionist New Initiatives J. Michael Pate Larry Meyer Alberto Ibargüen Program Director for Tallahassee Melissa Smith Vice President /Communications and Secretary Belinda Turner Lawrence President and CEO Administration Assistant Vice President/Chief Administrative Officer Susan Patterson Eric Newton Robert W. Briggs Program Director for Charlotte, Columbia and Myrtle Beach Olga Rodriguez Vice President/Journalism Program Michael Maidenberg Vice Chairman Archives, Records and Library Assistant Vice President/Communities Program Brenda G. Price Program Director for Detroit and Gary 50 51 A N N U A L R E P O R T 2 0 0 6 A N N U A L R E P O R T 2 0 0 6

INVESTMENT REPORT Knight Foundation’s ASSET ALLOCATION AND ASSET CLASS PERFORMANCE TA B L E 1 portfolio performed The foundation’s asset allocation targets (see pie chart) 2006 2005) well in 2006, both in absolute terms illustrate Knight Foundation’s strategy of diversifying C H A N G E I N A SS E T VA LU E S (dollars in millions) the portfolio into five broad investment categories. The Investment Activity, Net $ 307.0) $ 235.8) and in relation to its investment goals. benefit of participating in such a wide range of investment Grants Paid (104.3) (92.6) opportunities was evident in 2006, as performance differed General and Administrative Expenses (11.7) (10.6) The Knight Foundation portfolio returned 13.71 percent dramatically across these categories. The Global Equity Taxes Paid, Net (2.5) (2.3) (net of investment management fees) last year, its fourth Portfolio provided the highest return, 21 percent, boosted Contributions Received 0.5) 1 .4) consecutive year of double-digit growth. At year end, the by a 39 percent return from emerging markets, while Charitable Trusts 9.5) (9.8) portfolio’s market value was more than $2.26 billion, the Hedge Fund program, from which Knight Foundation Other 1.2) 0.5) a new high, having grown by $191 million, net of $104 seeks less volatile absolute returns, generated a strong TOTA L C H A N G E $ 199.7) $ 122.4) million in grants and administrative expenses of $11.7 14 percent return. These robust performances more than million. In addition, the foundation’s beneficial interest in offset returns of 6 percent and 5 percent from the Fixed Memo: charitable remainder trusts increased by $9.5 million to Income and Inflation Hedging portfolios, respectively. Beginning Assets $2,142.9) $2,020.5) $80.8 million, bringing total ending assets to more than Ending Assets $2,342.6) $2,142.9) $2.34 billion, also a new high (Table 1). IN SUMMARY TA B L E 2 I N V E S T M E NT RETURNS Taking into account the strong performance of the portfolio and the general market conditions, our overall investment The generally strong performance of global equity markets objectives remain the same. After four years of above- S U M M A R Y O F I N V E S T M E N T P E R FO R M A N C E AVERAGE ANNUAL RETURNS in 2006 in response to robust economic growth had much average returns, fueled by rising global equity markets, Period Ended Dec. 31 2006 5 Years 10 Years to do with the portfolio’s performance. Indices for U.S. no investment category appears to offer compelling value KF Portfolio 13.7% 9.8% 13.0% equities returned approximately 16 percent, European today. As a consequence, we expect double-digit returns Portfolio Benchmarks: equities, 34 percent, Japanese equities, 6 percent, and will be harder to achieve in the coming years. Thus, Knight Policy Portfolio 14.2% 9.1% 8.5% emerging market equities, 33 percent. U.S. investment- Foundation’s objectives are to remain highly diversified, Cambridge Associates (CA) Endowment Median 14.6% 9.5% 9.6% grade bonds returned 4.3 percent. and to focus on manager selection and disciplined rebalancing, as these are likely to be the key elements of In this environment, Knight Foundation obviously benefited successful portfolio management in 2007. A S S E T A L L O C AT I O N TA R G E T S from its policy of allocating a high percentage of assets to equity and equity-like investments. With 2006 inflation at 2.6 percent, the portfolio substantially exceeded the foundation’s real return objective of 5.5 percent. Because Private Equity Inflation Hedging that increases the purchasing power of the assets after 18% 20% grants and expenses, the foundation has the opportunity for higher grant spending in the future. However, the actual portfolio returns, while still subject to adjustment for fourth quarter nonmarketable returns, lagged that of Hedge Funds 1 The final number will be somewhat higher because this return assumes no the Policy Portfolio by 50 basis points, due mainly to an 20% fourth-quarter return from the nonmarketable portfolio, since data on private overweight to Japanese equities (Table 2). investment partnerships is available only with a one quarter lag. Fixed Income & Cash Global Equity go.knightfoundation.org/financials for the Independent Auditor’s Report and Complete 2006 Financial Statements 12% 30% 52 53 A N N U A L R E P O R T 2 0 0 6 A N N U A L R E P O R T 2 0 0 6

ACKNOWLEDGMENTS IFC – Knight Foundation Archives, 2 – Mark Wilson for Knight Foun- dation, 4 – Mark Wilson for Knight Foundation, 25 – Source of Knight Theater image/Charlotte?, 25 – Source of Knight Chapel image from Columbus, 34 (Kebbel) Robertson Adams for Knight Foundation, 34 -- Film Festival (??), 35 – Lisa Helfert for Knight Foundation (Knight Commission), 36 -- Anniston ?? Who from Anniston Star?, 37 -- Al Franquiz for Miami.com (Knight Ridder/Herald building), 37 – Source of Malcolm Moran photo?, 38 – Turner and Wharton photos?, 38- 39 (Student planting at Alcorn Middle) Photo courtesy of Jeffery Watkins, 39 – Powell, Stamps and Steiger photos by Mark Wilson for Knight Foundation, 40-41 (Three girls Lexington academic competition?) Photo for Knight Foundation by Joseph Rey Au, 40 – Source of Knight Concert Hall façade?, 40 – Source of Knight daughters/Alber- to photo?, 40 – Source of News 21 pix?, 41 – Source of Paula Lynn El- lis photo?, 41 – Kunkel/Mote/Ibarguen at Knight Hall (Lisa Helfert?, 42 – Source of Jack DeGoia?, 43 – Source of Knight addition at Akron Art Museum?, 43 – What’s the Image showing High School Journal- 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 ism?, 45 – Juan/Eric/Mike?, 48 – Mark Wilson for Knight Foundation Alex Fledderjohn and Sarahmaria Gomez of [Tu] Multimedia, Chicago, Ill., photographed, reported the stories of transformation EDITOR and created the online multimedia presentations for this annual Larry Meyer report. CONTRIBUTORS Alex, born in Guatemala, graduated from Ohio University with a W. Gerald Austen, M.D.; Alberto Ibargüen; Michael Maidenberg; Be- master’s degree in photojournalism. He is Tu’s photographer/pro- linda Turner Lawrence; Paula Lynn Ellis; Eric Newton; Gary Kebbel; ducer and author of Antigua. Sarahmaria, a native of Santa Fe, N.M., Denise Tom; Susan Patterson; Polly Talen; Vivian Celeste Neal; Anne and journalism graduate of Northwestern University, is reporter/pro- Corriston; Julie B.A. Brooks; Sandra Gross; Marc Fest; Robertson ducer. Please visit their website at http://tumultimedia.org. Adams; Jose Zamora; Barbara Koning; William Nichols; Elena Stet- senko; Jason Albrecht; Kevin Stephenson, and Caroline Wingate. Alex Fledderjohn took all photographs except as noted. DESIGN Vortex Communications, Coral Gables, Fla. IFC – Knight Foundation Archives, 2 – Mark Wilson for Knight Foun PRINTING Southeastern Printing, Stuart, Fla. 54 A N N U A L R E P O R T 2 0 0 6

2006 KF Annual Report

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2006 KF Annual Report Document Transcript