IP Funder Spotlights offer quick rundowns of the grantmakers that are on our radar, including a few key details on how they operate and what they’re up to right now. Today, I am taking a look at the environment program at the Kresge Foundation, the Troy, Michigan-based institution that funds in cities across the country.
What this program’s all about
The Kresge Foundation’s environment program is focused on three things: climate change, cities and equity. It aims to help cities reduce and adapt to climate change while making sure low-income communities and people of color are included in decisions and benefit from such work. Stepping back, the program’s goal is to expand opportunity in America’s cities.
One of Kresge’s aims is to ensure its climate change funding “multi-solves”—i.e., simultaneously helps to improve quality of life, economic well-being and equity. For example, last year, it issued an $8.4 million round of grants to both improve health and fight climate change in low-income communities.
To go along with its three focus areas, the program has three strategies. One is leadership development: building the capacity of urban leaders to support equitable climate approaches. Another is information: supporting leaders’ access to the evidence and tools they need to take equity-centered climate action. The third is changing systems: transforming urban infrastructure, particularly energy and water systems.
Why you should care
Of the nation’s major climate and environmental grantmakers, Kresge is also one of the most staunchly dedicated to equity, whether through its funding, endowment investments or commitments in the sector. If that’s your nonprofit’s focus, or if you’re at an urban, community-based organization that would like to launch a program with that focus, the foundation could be your dream match.
Where the money comes from
Sebastian Spering Kresge was born in Pennsylvania in 1867 into a family of farmers who came to the United States from Switzerland. He was able to work his way through college by teaching and clerking at a grocery store before going into business selling hardware and other goods. Later, he started a five-and-ten-cent store in Detroit that he would ultimately grow into the international retail chain Kmart Corporation. In 1924, when he was 57, he established the Kresge Foundation, to which he gave more than $60 million during his lifetime. The foundation had $4.2 billion in assets as of 2020.
Where the money goes
Out of $110 million granted in 2020, Kresge’s environment program accounted for $18 million. (Data for 2021 was not ready by press time.) There’s a sweet spot when it comes to how much Kresge gives: Nearly all of the program’s recent grants were six-figures, and more than half were for exactly $600,000, according to its grants database. Grants went to organizations in metropolises like Atlanta, Los Angeles and New York, as well as in smaller cities like Fresno, California, Springfield, Massachusetts, and Port Washington, Wisconsin.
Many recipients were community-based groups, often working at the intersection of health and the environment, but recipients also include national groups and intermediaries. Some have an organizational focus on climate, but many do not. Kresge also likes backing networks and coalitions. Case in point: One of the program’s top 2021 grantees was the Urban Sustainability Directors Network, an organization for local government professionals, which received two awards of $750,000, based on the database.
Kresge doesn’t just give out its mandated 5% and call it a year. Through 12 “social investment” commitments dating back to 2013, the foundation has leveraged its endowment to provide investment capital, loan dollars or loan guarantees that total $47 million, according to the foundation. These include green banks, such as Inclusive Prosperity Capital, and socially driven for-profit companies, such as PosiGen and Greenprint Partners.
Who calls the shots
Kresge’s 14-member board of directors has a wide variety of overlapping experience across education, government and philanthropy, as well as finance and health. Members from the academic world include the president of Drexel University, a dean of public policy and professor of law at the University of Michigan, and an adjunct Harvard lecturer.
Board members with public service experience include a former director of the White House’s Domestic Policy Council, a former U.S. undersecretary of state, a past assistant secretary of the U.S. Treasury, and the former speaker of the Michigan House of Representatives. Philanthropy professionals include current or past leaders at the Draper Richards Kaplan Foundation, Michigan Health Endowment Fund and Kipp Foundation.
Many members are represented more than once across these sectors, as is foundation president Rip Rapson. He has served in government (as deputy mayor of Minneapolis), academia (he spent six years at the University of Minnesota’s design center), and, of course, in philanthropy (he’s been with Kresge since 2006, and earlier, the McKnight Foundation).
There are also at least three directors each with ties to finance or to health, including the board’s lone family representative, physician Cynthia Kresge. The foundation lists its board members on its website, but does not publicly share board demographics like race/ethnicity, gender, etc.
Is diversity and inclusion tracked and shared?
Kresge tracks the gender and racial/ethnic background demographics of its staff down to the program level. Half of the environment program’s six full-time team members are white, and the other half are people of color. All are female. (The foundation also tracks staff who work with other departments, who have a similar makeup, though with gender diversity.) Kresge calculates that 70% of the program’s leadership are people of color. Staff are listed online, but these demographics are not publicly shared.
The foundation’s efforts to track diversity and inclusion also extend outside of its own ranks. Kresge was the first top-40 climate funder to commit to the Climate Funders Justice Pledge, which asks foundations to commit 30% of their climate funding to BIPOC-led environmental justice groups. It has committed 33% of its climate funding to such groups in recent years. Kresge also funds Green 2.0, which tracks diversity at NGOs and foundations, and until 2020, it publicly shared its internal demographics with the organization. (Green 2.0 switched to an anonymous format for foundations last year). And it’s one of roughly 50 foundations that have signed the Disability Inclusion Pledge.
Open door or barbed wire?
The environment program keeps the main door closed, but there is a side entrance of sorts. In other words, while the program does not accept unsolicited grant proposals, instead relying on invitations, the foundation does maintain a list of open funding calls. A recent one—not from the environment program—asked for resident-supported neighborhood projects by Detroit-area nonprofits. For those grantseekers lucky enough to receive an invitation to apply, the foundation also maintains a highly detailed How to Apply page, with guidance on the process, specific programs and an extensive FAQ.
Sunlight or secrecy?
In line with peers, Kresge has a grants database with filters for year, program, focus and location. It goes back to 2009. But why have only one public database when you could have three? Kresge has another for its social investments, with all the filters you could want, and a third to track its own funding initiatives, indexed by program, something I’ve never seen before. (I’d say those are worth some bonus points.) Similarly, it posts its audited financial statements and tax filings dating to 2015. It even has a reader’s guide to the tax filings. (More bonus points!)
What do we hope is next?
Kresge is somewhat known for its social investments. And from what I’ve seen, those individual moves are carefully chosen and weighed for impact. That said, the foundation’s website indicates that its commitment to mission-aligned investments is set at $350 million—or just 8.3% of its endowment. (Kresge did not reply to a question about whether that has changed.) With the world on fire, why hold so much back? It could also join the growing number of peers who are divesting from fossil fuels.