Types of Funding
Our funding contains a spectrum of grantmaking and investing tools. Selection of the appropriate tools is made by program officers in consultation with applicants.
We award a variety of grants and, through our Social Investment Practice, make program-related investments.
Operating support grants provide nonprofit organizations with unrestricted funds to use as they deem appropriate to become more sustainable over time, including staffing, new technology, or business-practice development, among other purposes.
Project support grants provide restricted funds for specific activities associated with an organization's programming, such as program implementation, applied research, a pilot project, or any other explicitly designated purpose. Project support grants generally take the following forms:
- Program implementation grants, our most frequent form of support, fund specific initiatives that advance an organization's mission.
- Growth capital grants support specific efforts associated with expanding, retooling, transitioning or increasing the scale of an organization’s operations so that it may develop a more sustainable operating model.
- Planning grants constitute seed money and are usually used for business planning, market analysis, or other aspects of launching or spinning off a new program or nonprofit organization.
- Facilities-capital grants fund the acquisition and construction of facilities, including land, new construction and existing property renovation and major equipment purchases. Historically these grants were awarded as a challenge to organizations engaged in capital campaigns to raise private funds for facility projects.
Program-related investments are made in support of programmatic goals. PRIs made in the form of loans must be repaid to the foundation. Currently, we make PRIs in two program areas – Health and Environment. PRIs can take many forms, including:
- Direct loans to organizations, typically at interest rates that are lower than those offered in the commercial market.
- Equity investments, which represent an ownership stake in a for-profit entity.
- Guarantees, which provide credit support to an organization obtaining funding from a bank or agency.
- Linked deposits, which are deposits in FDIC-insured institutions that are working in community lending in a geographic or programmatic area of importance to Kresge.
(Learn more about our Social Investment Practice.)
For decades, the challenge grant was our signature funding method. It was an effective way for us to help nonprofit organizations meet their fundraising goals for new facility construction or renovation. The challenge grant was designed to spur charitable giving by donors to our grantees' capital campaigns.
The evolution of full-time advancement and fundraising specialists coupled with a desire to meet society’s most pressing needs led our Board of Trustees to chart a new direction in 2007. Today, we operate as a strategic philanthropy.
We remain proud of the libraries and academic buildings, the community centers and medical facilities the challenge grants helped build. And we look for opportunities to take the lessons of the challenge grant and apply them in different ways. We periodically award an operating or project support grant and – in consultation with the grantseeker – include a challenge component as an incentive to increase donor contributions for a range of fundraising goals.
Because of our long experience, we make reference material about the challenge grant available for others who might find it useful. It is a resource for others. This funding is not available from Kresge.