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Case study in using MRIs to further higher education goals

Education, Social Investment Practice

MRI in AdmitHub aims to scale and optimize how colleges deliver student advising supports

Kresge has used social investments in the form of program-related investments, guarantees, equity and mission-related investments (MRIs) to further its mission since 2008. Of all of those, we talk the least about MRIs, although Kresge has a $50 million commitment to using this tool. That’s because traditionally philanthropic investment teams – the investors inside a foundation who manage the endowment and make MRIs — like to keep details about investments close to the vest. And that’s what MRIs are: individual investments from the corpus that expect to generate market-rate returns while also furthering the organization’s social mission.

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But for Kresge’s Education Program and our Investments colleagues, the for-profit firm AdmitHub is one investment that we want to share loudly. Why? Because the Education Program’s goal is to get more students with low-incomes and students of color to and through college, and AdmitHub can transform student support efforts at colleges nationwide while, ideally, enhancing investor returns.

In 2016, AdmitHub launched a digital platform to help colleges optimize communication with students via texts from a chatbot. Today, AdmitHub’s chatbot is powered by artificial intelligence and can respond instantly to students’ questions about more than 6,000 topics.

We’ve witnessed the impact of this technology firsthand. And early implementation has been promising.

Originally piloted by long-time Kresge grantee Georgia State University (GSU) in 2016, AdmitHub significantly improved would-be freshman’s matriculation rates by 3.3 percentage points. The chatbot helped engage students in two-way conversations via their preferred ways of communicating and delivered timely assistance needed to succeed in their postsecondary plans. GSU has since been lauded for its strides in eliminating completion inequities between Black students, Latino students and their white peers.

Here in our hometown of Detroit, Wayne State University also uses AdmitHub. As part of its participation in the Association of Public and Land-grant Universities’ Collaborating for Opportunity Grants initiative, Wayne State has used AdmitHub to attract Pell-eligible and first-generation college students, a key goal of the institution, and increase enrollment.

These universities increasingly view AdmitHub as an important addition to their student success arsenal.  The chatbot minimizes staff time needed for more basic questions, enabling admissions, financial aid, and academic advisors to redeploy their time to student issues that only experienced counselors can solve. By optimizing staff time, the technology is helping colleges serve more students while saving money.

Nonprofit partners— including former Kresge grantee College Advising Corps and current grantee Reach Higher— have also embraced the tool to virtually supplement college advising for high school students in the context of coronavirus-related school and nonprofit office closures.

This makes AdmitHub a key complement to the Education Program’s significant investments in high-quality advising as an important college access and success strategy.

Given the Education team’s support, and AdmitHub’s success at scaling and growing its business, Kresge’s Social Investment Practice Managing Director Aaron Seybert suggested we explore an MRI. While his role at Kresge is to move capital to nonprofits and other entities that traditional markets overlook, this was a case where AdmitHub had a balance sheet that suggested market-rate returns are possible.

From the first call with AdmitHub, which included co-founder Andrew Magliozzi, Kresge’s investment team was impressed. “It was clear that Andrew and his team not only have developed a product that saves colleges money and improves outcomes for students,” Kresge’s Managing Director of Investments John Barker said, “but they also have the skill and ambition to solve even more problems with its innovative technology.”

After a period of rigorous due diligence, the team decided to make a direct equity investment in Admit Hub’s latest round of financing.

To better understand how student supports generally and chatbots, in particular, can improve student success, we are also funding a rigorous evaluation to help us understand AdmitHub’s effectiveness in improving college persistence and success at California State University at Northridge.

By leveraging the foundation’s endowment assets to bring sector-changing tools to scale, we’re helping more colleges – meet their missions to help more students cross the degree-completion finish line.

Bill Moses is the managing director of the Kresge Foundation’s Education Program. To sign up for the Education Program’s bimonthly newsletter Every Degree Matters, visit https://kresge.org/subscribe.

Kresge staff is working remotely, and our offices are closed until further notice.  See our promise to partners during COVID-19.
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