Kresge Foundation steps up social investment plans
The Kresge Foundation’s Board of Trustees is stepping up its social investment plans with a commitment to invest $350 million, or 10 percent of its endowment, by 2020.
The investments will be funded through returns on its $3.5 billion endowment over the next five years, Kresge officials said.
As the Troy-based foundation expands its use of social investments, it will continue to align them with its six program areas — arts and culture, education, environment, health, human services and community development in Detroit — and make nearly $140 million in grants each year, foundation spokesperson Krista Jahnke said.
Kresge Foundation Trustee Maria Otero said the board’s decision signals a significant inflection point for the foundation.
“While we have used these financial tools for several years, this commitment embeds that practice into the fiber of how we work for social change,” she said. “These investments, particularly those made in conjunction with grants, will accelerate the work of our program teams and stretch much further than their total, bringing about better opportunities, faster for underserved people across America.”
Kresge’s commitment comes with its goal to attract an additional $1 billion from other investors to accelerate impact on issues facing the cities and low-income people the private, national foundation serves.
Kresge Foundation president Rip Rapson said the language of philanthropy is shifting toward a more integrated model.
“Where all types of social funding work in an integrated way toward the same end — that’s the new way of The Kresge Foundation,” Rapson said. “We, as a foundation, cannot solve complex social programs through traditional grantmaking alone. By defining this funding pool, we are extending our hand to for-profit and nonprofit partners alike and are asking them to join us on the front lines to use more innovative approaches to this work.”
Kresge recently used a variety of funding tools to bring in other partners in the Strong Families Fund. The $70-million fund pairs affordable housing with on-site social services in the nation’s largest pilot of pay-for-performance. Kresge’s committed $6 million through its social investment team and paired it with $1.25 million in grant funding from its human services team.
This attracted more than $60 million to the project from numerous other partners, including KeyBank, Goldman Sachs, and the Robert Wood Johnson Foundation.