As part of our centennial, we’re sharing stories of our last 100 years throughout 2024.  To learn more about Kresge’s history, visit Kresge.org/100. 

A providential call from a search firm resulted in Rip Rapson leading one of the country’s oldest and largest philanthropies.

In 2005, Rip Rapson – a longtime civic leader in Minneapolis who had served as that city’s deputy mayor – received a call from a national search firm tasked with finding The Kresge Foundation’s new CEO, asking if he would be willing to talk about the job. He demurred, noting that he and his family’s roots were deeply planted in Minneapolis.

The consultant then switched tacks and asked if he would be willing to meet with the Kresge search committee to talk about the model of philanthropy he had pursued at the McKnight Foundation. He replied that he would be delighted to do that.

In Rapson’s words: “The search firm told me that the foundation had a long and storied history of making capital challenge grants, but was interested in using the president search to explore whether they might refine or reimagine their approach. Although I couldn’t presume to know what they had in mind, it seemed well worth the time to share what we had done at McKnight and how that might or might not apply to a possible change in course at Kresge.”

Discussion focuses on two key questions

The meeting involved a half-dozen Kresge trustees, led by the search committee’s co-chairs: Elaine Rosen, who would become board chair in 2007, and Lee Bollinger, then president of Columbia University. The conversation turned on two questions.

First, whether Rapson could imagine a different approach to grantmaking from that Kresge had pursued for the previous decades.

He replied that it might be useful to take a step back and ask what qualities were unique to a private philanthropy like Kresge. He suggested four:

1. The ability to take a long-term, holistic, integrated view of challenges – to identify relationships among things often seen as unconnected.
2. The prerogative of taking risks where the public or private sector won’t – to serve as society’s venture capital.
3. The capacity to use multiple tools – to convene people, commission research, make grants, loans, or equity investments, or support networks of organizations working in common purpose.
4. The opportunity to invest in people, places and ideas that are passed over or otherwise marginalized.

Rapson noted that although this was a very different way of working from that Kresge had traditionally pursued, it might provide a point of departure for the Board’s deliberations about possible modifications in the foundation’s direction.

The second question was whether and how Kresge could work more effectively to make Detroit a healthier, more vibrant, sustainable place.

He responded by underscoring the undeniable value of Kresge’s investment in the Riverfront, Campus Martius Park, and key institutions like the YMCA and the downtown library. He added, though, that he didn’t believe that capital challenge grants alone would be enough to help a distressed and disinvested city get back on its feet. If the trustees wanted to have a more transformational impact, he suggested, they would have to explore in a serious way how to apply the four principles he has just described.

Four principles

At that point, the trustee questions became more animated, asking how a philanthropy with relatively limited resources could even begin to think so expansively. Rapson returned to the four principles.

He proposed that the foundation would have to:

1. Become a source of long-term patient capital, sighting against a more distant horizon line in measuring its impact.
2. Embrace risk-taking at an order of magnitude commensurate with the scale, complexity, and severity of the challenges the city faced.
3. Diversify its toolbox to include strategies tailored to the needs of the community, not driven by the more formulaic approaches demanded in capital challenge grantmaking
4. Introduce a focus on people in greatest need.

“I wasn’t about to tell them what to do. That would have been beyond presumptuous,” Rapson remembered. “But it did strike me that the entire reason they had asked me to speak with them was to hear an alternative perspective. And that I certainly provided.”

Rapson left the meeting uncertain whether that perspective would be helpful, annoying, or somewhere in-between. But he left believing that the search committee was a deeply serious group of people committed to looking long and hard at what changes in direction might be possible, and advisable, for the foundation. And, finally, he left with no thoughts that Kresge might be in his future.

The next day changed that latter thought, however. The consultant called him to say that the trustees were energized by the discussion and wanted him to consider becoming a candidate. “I was deeply flattered, and surprised,” Rapson recalled. “I couldn’t, though, imagine doing that. I just wasn’t mentally or emotionally prepared to consider making such a momentous life change by moving my wife and two small children to a city so different from Minneapolis and one in which we had no history or connections.”

His wife, Gail, surprised him by urging a different perspective. She said that the opportunity was just too important and compelling not to consider; he should continue with the interview process to see where it led. He did, and two interviews later the Board offered him the job. By now utterly convinced of the timeliness and importance of the opportunity to both help Kresge reimagine its ways of working and contribute to the revitalization of an iconic American city, Rapson accepted. He started in June of 2006.

Steering a new course

Before starting, Rapson travelled the country to ask sector leaders their advice about how Kresge might steer a new course. The process reinforced his impressions that changing such a venerable institution would need to be done gradually, with the deepest regard for a legacy of helping thousands of nonprofits expand their fundraising capacity through capital campaigns.

It was one thing to canvass other foundation leaders; it was entirely another to take the temperature of the existing Kresge staff. Rapson observed, “I asked each of our two-dozen staff to share impressions of where Kresge’s work had been most effective, where changes might be useful, and how to move forward without disrespecting the foundation’s past. The thoughtfulness and insight of what I got back was extraordinary. Combined with my experiences at McKnight, the observations from outside the building, and the ongoing input of our Board, these interviews became the bedrock on which we began to build a new model of philanthropy.”

It was a process that Rapson dubbed “depreciating the asset” — deciding step by step those aspects of the foundation’s work that continued to carry high value and should be retained and those that could gradually be set aside. What emerged over the next three years was a vision that transitioned Kresge from a capital challenge granting institution into a strategic philanthropy focused on investing grant capital across six program areas.

The new North Star sought, in Rapson’s words, “to improve the economic, social, cultural and environmental conditions of low-income and underserved communities.” Elaine Rosen, the Board chair wrote in in Kresge’s 2010 – 2011 annual report, “Our course is steady; our approach is purposefully flexible. This enables us to be responsive to the inevitable twists and turns of life.”

That flexibility was called fully into service in 2008 and 2009 when the Great Recession combined with the mortgage foreclosure crisis, and both were compounded by the wave of bankruptcies in the automobile industry and the political implosion caused when Detroit Mayor Kwame Kilpatrick was caught up in scandal and sent to prison.

Rapson would note that “with the automobile industry in a bunker, municipal leadership in the penitentiary, and the nonprofit community hanging on by a thread, philanthropy in Detroit had no choice but to step up and play roles to which it was unaccustomed.” But doing that would test the resolve and ability of Kresge to take the kind of risk and mobilize the kind of resources that Rapson had described in his interviews some three years earlier.

“I realized that there was a great deal of positive activity going on in the city, activity that was led by different organizations, that was supported by real investments, and that could collectively help stabilize the community until the public and private sectors returned to the field in ways that we have come to expect,” Rapson noted. To help map that out, Rapson created one of his now-well-known conceptual drawings to visualize what that holding structure could be.

The result was Re-imagining Detroit 2020, which spanned nine policy areas:

• Green economy
• Entrepreneurial development
• Healthcare
• Land use
• Corridor revitalization
• Regional transit
• Stable, vibrant neighborhoods
• Education
• Arts and culture

Rapson wrote in Kresge’s 2010-‘11 annual report:

“Re-imagining Detroit provided a scaffolding for various actors to build out workplans . . . to bridge to a time in which the public and private sectors resumed their rightful roles. It required that the foundations working in Detroit discard their deeply ingrained predisposition to sit at the margins without stirring up a fuss, hoping that their good intentions and charitable impulses would help the community slide through tough times. They would instead have to step inside a zone of discomfort and aggressively contribute to shaping a very different civic trajectory.”

The increased definition of the foundation’s work in Detroit was accompanied by the emergence of six grantmaking disciplines – arts and culture, environment, health, higher education, human services, and national community development – with the attendant expansion in staff and build-out of a full spectrum of operational departments, including human resources, finance, investments, grants management, and communications.

A staff member who preceded Rip’s arrival and went on to lead the Detroit program, Laura Trudeau, observed,

“When Rip arrived, he asked whether there was a way in which we could engage more meaningfully in the critical issues of our time. At that point, we formed field-specific teams and started to investigate what those issues were in each of those fields. Once we identified where we wanted to focus,  we sought out the kind of domain expertise necessary to be effective. In the Detroit program, my program area, we expanded our ambition beyond capital grants to invest in improving neighborhoods, developing regional transit, and finding new approaches to attack the city’s longstanding challenges of economic disinvestment.”

The importance of cities

By 2012, the new approaches — in Detroit and across the disciplinary areas —had solidified sufficiently for the Board to adopt formally urban opportunity as its guiding investment framework. As Rapson explained:

“We believe that cities of the 21st century, even more than in centuries past, will be America’s great incubators of genius, creativity, possibility – and also hardship. Metropolitan areas are home to nearly 82 percent of the U.S. population. The heart of these areas, cities, offers the density of people, activities, skills, and ideas that serendipitously or intentionally circulate and ricochet, recombine and catalyze, creating the preconditions for innovation. Their complex networks and diverse subcultures are conducive to dismantling stale and unproductive approaches to persistent problems – or, equally, to introducing new or imaginatively recycled ones.”

The Kresge Foundation’s evolution from capital challenge grantmaker to a strategic funder was nearly complete. It now had a finely honed mission – and the resources, tools, and experienced staff to pursue it. All these elements proved instrumental when Detroit faced down yet another cataclysmic event: the largest municipal bankruptcy in American history.

Rapson admits that the twists and turns of his Kresge career would most definitely surprise his 2006 self:

“When I first interviewed with the Kresge Foundation, I never dreamed that we would be where we are now, almost 20 years later. I had certainly hoped that we could explore ways to make our grantmaking more flexible and test expansive ways of building the capacity of nonprofit organizations to address community challenges. I never dreamed that we would diversify our tools as we have, that we would work in multiple places as we have, that we would have contributed to the revitalization of one of the great cities of the world as we have. And I certainly never imagined that we could build, as we have, a philanthropic way of working that is distinctive in American philanthropy.”