Knight creates new fund

By Mary Bitti

When Paula Ellis was publisher of Knight Ridder’s newspaper in Myrtle Beach, S.C., she led an effort to match the needs in the highly-transient community to the skills of retired CEOs and businessmen.

The result was a clearinghouse and training center called StepUp!, which was launched in 2005.

That project is an early example of the type of systemic change the Miami-based John S. and James L. Knight Foundation wants to spark in the 26 communities it supports across the U.S.

To do that, the foundation in March created the Transformation Fund, designed to move the Knight Foundation into the arena of social investing.

And in September, after 26 years with Knight Ridder newspapers, Ellis signed on as vice president of national and new initiatives at the Knight Foundation and will oversee the Transformation Fund.

The launch of the fund occurred just as the century-old publisher that spawned the foundation was sold to newspaper-publishing giant McClatchy Company, based in Sacramento, Calif.

Still, it’s business as usual at the foundation, says Ellis.

In fact, with 50 employees and assets of $2.1 billion, the foundation has enjoyed a particularly strong year, she says, and expects to pay out between $101 million and $104 million in 2006, and $107 million next year.

Of that, $20 million has been earmarked for Ellis’ Transformation Fund for 2007.


In keeping with the foundation’s dual missions to inspire great journalism and build strong, healthy communities in the cities and towns where the founding Knight brothers ran papers, the fund will look for big ideas to effect big change.

“We are taking on systems; this goes well beyond delivering specific services,” says Ellis. “When you look at the intractable problems and challenges in our communities, at some point you have to look up and say, how can we deal with this differently?”

The goal is to take a community from being “marginal to livable,” she says.

For example, the fund has just approved a $10 million grant to support the University Parks Alliance Economic Development Plan in Akron, Ohio, an initiative that aims to revitalize the downtown district.

“We create an asset map of a community and look at how we can leverage those assets, and collaborate with others to have maximum impact,” says Ellis.

The foundation has three distinct programs, Journalism Initiatives, Community Partners and the National Venture Fund, and program directors from each area can apply to the transformation fund for additional resources.

But each project must demonstrate the five basic qualities of transformation, which Ellis says are discovery of new opportunities for change; the vision to see what’s possible; the courage to push for change; the know-how to get it done; and the tenacity that gets results.


While promoting excellence in journalism and national community development initiatives remain priorities, Ellis is exploring new directions for the fund.

On the journalism front, for example, the foundation has committed $5 million a year to invest in individuals, groups or companies with transformational ideas about journalism.

It already has launched New Voices, a program that seeds innovative community news ventures across the U.S.

Ellis also is exploring the area of social entrepreneurship both as a means of governing the fund and transforming communities.

“I have a dream world of establishing an enterprise funding bank within our own organization where program directors compete for the funds and the best ideas win out,” she says.

And she has proposed a grant to the board that would fund introducing Ashoka fellows, who are leading social entrepreneurs, in each of the foundation’s communities.

But the fund is still young and Ellis is busy exploring the landscape and the possibilities, she says.

“I take a bio-organs approach to change, which is that organisms adapt,” says Ellis. “You make a change in a system and you experiment and reflect and then you change again. That’s how transformational change happens, and that’s what we’re doing.”

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