Note: To apply for the News Challenge, and read our FAQ, visit NewsChallenge.org.

Since announcing the first topic for the 2012 Knight News Challenge last week, we’ve received a lot of questions about whether winners will have to release their code as open source.  The short answer is no, but there’s a bit more to it than that. Here’s an explanation of where we’re coming from, and where the challenge is headed on this issue. In the first three years of the contest, all challenge projects were required to develop their projects using open source software. Since the Knight News Challenge is a giant research and development project aiming to accelerate media innovation, using open source makes sense. However, in response to requests from the community, we have worked to find additional funding mechanisms that allow for less strict or no open source requirements. This does not mean that we dropped the open source requirement, but rather that we created new opportunities that allow us to uncover ideas, and innovators, that we don’t have or know. The new funding mechanisms below allow Knight to fund businesses, individuals and nonprofits. Each one has different open source requirements. We started using some of them in years four and five of the contest.

1.    Grant to nonprofits

2.   Grants to for-profits

3.   Program Related Investments (PRIs)

4.   Knight Enterprise Fund

In general terms, if you win the contest, you’ll still own the copyright on your intellectual property, including your software. But in most of the four types of funding, you will need to share the software you developed under a GNU General Public License and any documents, manuals or instructions under Creative Commons licensing. Grants to nonprofits have an open source requirement. Any software developed with grant funds has to be open source. If a grant is made to a business, both the initial and future releases of the code need to be open source. The business receiving a grant agrees to bind itself to the open source license it owns as if it were a licensee. Program Related Investments, or PRIs from Knight Foundation, which are no-interest, five year-loans, are generally structured as Convertible Notes instead of a traditional grant. If a PRI is made, only the initial release must be open source, and future versions can be licensed in different ways. At the end of the funding period, the company can pay back the funds it received or Knight can take a stake in the company. Knight News Challenge for-profit winners include companies building a product from scratch (such as NowSpots real-time ads), creating or rebuilding an open-source version of existing software (Front Porch Forum‘s local community platform) and continuing existing open-source work (Stamen Design and DevelopmentSeed). The Knight Enterprise Fund provides early-stage venture funding for media innovation. The fund invests in companies whose mission aligns with Knight’s mission of informing and engaging communities. These investments are structured to help companies fill out early investment rounds with experienced angel and venture capital funders. Software produced through these investments is proprietary. Companies in the portfolio of the Knight Enterprise Fund include SnagFilms and Book Brewer. As always, and especially in this first round of the revamped Knight News Challenge, applicants can develop ways of linking up or leveraging third-party platforms such as Twitter. Knight Foundation grantee NewsCloud, for example, uses Facebook. Feel free to send specific questions about this via twitter using #newschallenge, @knightfdn, @jsb and @jczamora or email us at: [email protected].

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By Jose Zamora, journalism program associate at Knight Foundation