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Oct. 3, 2009, 6:08 p.m.

Knight Foundation rethinks its stance on for-profit deals

Everyblock won a $1,100,000 grant from the Knight Foundation in 2007 to build its innovative platform for aggregating local news and information. Two years later, soon after the Knight grant had expired, founder Adrian Holovaty announced that MSNBC had acquired EveryBlock.

The sale raised questions about nonprofit funding of for-profit ventures. After all, Knight had essentially seeded EveryBlock’s development, while Holovaty profited from its sale. Soon after the deal was announced, Gary Kebbel, Knight’s journalism program officer, said the foundation was gratified by EveryBlock’s move to MSNBC. “We always hope that innovations Knight Foundation funds are supported by the marketplace,” he wrote.

But in a session just now at the Online News Association’s conference in San Francisco, Kebbel said that Knight is rethinking how to deal with projects funded by the foundation that are later sold. “It’s a safe bet that grant agreements are going to change in the future,” he told a large crowd gathered to hear about the Knight News Challenge. (He also described EveryBlock’s sale to MSNBC as a “multi-million-dollar deal.”)

When a Knight-funded project is acquired in the future, Kebbel said, the founders may be required to relinquish some of that money: “It might be a certain percentage, it might be a certain dollar figure, it might be the amount of the grant…What we’re thinking about is creating another nonprofit that would receive that money, and that money would be either for the future development of open-source software…or it might be for community news.”

So for-profit acquisitions would still be allowed — even encouraged — but not in the same way that EveryBlock found its way into the hands of MSNBC.

POSTED     Oct. 3, 2009, 6:08 p.m.
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