This year marks a momentous milestone for The Kresge Foundation: our Centennial — a century dedicated to fostering opportunities and advancing equity across the United States and the world. This letter from Kresge President & CEO Rip Rapson is featured in our special centennial edition of our annual report.

One hundred years ago, Sebastian Kresge created a foundation in his name with the mission to promote human progress. Since then, Kresge’s board members, staff and presidents have collaborated to give shape and direction to that charge.

When one’s founding documents allow such sweeping discretion, it’s tempting to cast your net broadly — to sidestep the need to choose among countless worthy causes. Tempting, but ill-advised. Spreading philanthropic resources too thin causes us to flow, amoeba-like, from one urgency to another. We need a point of view to focus our efforts.

The challenge is accordingly how we decide where, how and to what we direct our resources — not just our endowment, but our attention, our credibility and the dedication, learning and creativity of our people.

Over the 18 years in which I’ve had the privilege of serving as president of the foundation, we’ve come to an understanding of how to meet that challenge: being additive rather than redundant … being expansive without losing focus … calibrating between reasonable risk and aspirational audacity … using the full suite of tools of a private philanthropy.

As we see it, Kresge as a philanthropy plays six fundamental roles — engaging tasks that we do well and calling on tools that we use with skill — which we blend, stack, and combine with the freedom that few of our counterparts in other sectors enjoy.

Let me say a bit more about why these roles are important in the first place, and then suggest how they have informed our work at Kresge.

The Unique Attributes of Private Philanthropy

Our grant and investment dollars align with, animate and give credibility to everything the foundation does. But they alone are insufficient to the full realization of our purpose, particularly when viewed in the context of the vast dollars available to the public and private sectors.

If we are to contribute to social progress, therefore, we must move into lanes difficult, if not impossible, for the private and public sectors to occupy — something made possible by our enormous privilege of being able to hold long-term perspective, take risk calibrated to the magnitude of the challenge, draw on a deep and diverse toolbox, and anchor our efforts in equity and justice.

Stated somewhat differently:

• We can be a source of patient, discretionary capital, balancing the imperative of responsive and transactional support with the desirability of addressing systemic drivers of unjust and inequitable social and economic systems.
• We can serve as society’s social venture capital.
• We can fashion a unique alchemy by interweaving grant dollars with creative financial tools, intellectual contributions and partnerships.
• We can create powerful and enduring relationships that translate into the kind of trust essential to pursuing community change.

Six Roles From the Detroit Experience

These qualities have translated into six roles that have enabled Kresge to adapt to the extraordinary cycles of uncertainty and disruption that have washed over Detroit — and other communities — over the last two decades: the ravages of the Great Recession and the housing foreclosure crisis of 2008-‘09 … the existential threat posed by the largest municipal bankruptcy in American history … the wholesale reinvention of neighborhood revitalization tools in the bankruptcy’s aftermath … the dizzying dislocations in public health, small business viability, and daily life occasioned by COVID … the searing energies of racial justice and reconciliation following the George Floyd murder.

They have proven to be levers capable of cracking open and shifting systems, recasting the interplay of government, the private sector, and civil society.

First, table-setting. We could use our perceived fairness to convene community members around the kind of gnarly, long-term issues that the public and private sectors wouldn’t, or couldn’t, address, cutting a channel for philanthropy to help overcome stubbornly resistant civic inertias.

Second, capacity-building. We could fund the mechanisms by which citizens become well organized where they live, augmenting local decision-making and investment capacities in ways that inject local voice into processes that are too often hard-wired to marginalize them.

Third, risk mitigation. We could peel away the first layer of risk in critical transactions outside the comfort fence-line of public and private sector actors, either by serving as a “first-mover” or by assuming the top level of financial loss.

Fourth, value guarantor. We could underwrite public goods that signal to private markets that these are places and activities capable of anchoring a community’s sustained long-term health and stability.

Fifth, ground-truthing. We could offer our knowledge of the local circumstance to those not familiar with the city — other philanthropy, the federal government, or others to help them determine how they might best invest their time, talent and resources.

And sixth, civic stewardship. We could invest in building, strengthening and sustaining the fragile civic and cultural ties that help bind a city together — whether through arts and culture, human services supports, community organizing or otherwise.

The roles became far more than theory — far more than a neat and tidy rubric capable of housing the wide spectrum of Kresge activities during a tumultuous period of Detroit’s history. They instead redefined what we sought to accomplish wherever we worked — and how.

Our experience, moreover, underscores that these roles activate with greatest potency when deployed in combination. The resulting arrangements suggest a form of reverse engineering: clarifying what we want to accomplish, then working backward to assemble the right players equipped with the right tools … applied in the right proportions … in the right sequence … at the right pace.

Only then do we forge a truly effective, equitable and accountable civic problem-smashing machinery. A machinery not limited to just city hall or state government. Or to just corporations, no matter how enlightened. Or to just philanthropy. And not even to just community residents. Instead, all parts of civil society working in a mutually reinforcing way to advance the common good.

Consider, for example, the power of setting the table for community residents to participate in the reimagination of an early childhood development system … then strengthening community capacity by providing the kind of technical assistance and networks of exchange necessary for long-term, sustained professional growth of early childhood providers … and then investing in childcare facilities that serve as neighborhood anchors. The cumulative effect is to create the preconditions for both expanded access to high-quality care for thousands of Detroit’s youngest residents and long-term economic stability for childcare providers. And that is exactly what has materialized through the decade-long commitment Kresge and others have made to the Hope Starts Here initiative.

Or consider the catalytic effect of providing the risk capital that absorbs the first layer of exposure in an otherwise elusive housing strategy … thereby inviting external investors to see the financial feasibility of undertakings they would otherwise cordon … and, in turn, beginning to build the muscle of community-based lending capacity. The net result: starting in motion a flywheel of more balanced, equitable investment in an essential building block of community health and vitality.

At the risk of grandiosity, the roles are like colors on a painter’s palette or notes in a musical composition. One is good, but it’s the blending and layering that create something truly special.

Beyond Detroit

Representatives from other communities had taken notice of our experiences in Detroit and were curious to know whether and to what extent what we had learned might be translatable to their circumstance. We started testing the idea of supplementing our discipline-based grantmaking — which had always been national in scope — with an elevated focus on a few other cities.

We returned to the challenge I noted earlier of not outstripping our capacities by becoming too diffuse. We assessed where we were already making grants … where there were reliable local partners able to ground us … where the challenges of race, poverty and economic opportunity bore resemblance to Detroit … where the scope of public systems was not so large as to marginalize our engagement … and any number of other factors.

At the end of the day, though, it was an accretive process, not prescriptive. Over the next decade, it led us to land in Memphis, New Orleans and Fresno. In each, the six roles played out differently, but continued to imbue our way of working with a valuable form of constancy.

New Orleans

Kresge joined with other funders to aid the city of New Orleans in the immediate aftermath of the unthinkable horrors of Hurricane Katrina in 2005. By 2020, though, many of the others had withdrawn, leaving Kresge one of three national community development funders still committed to the city.

New Orleans has a syncopated rhythm that is unlike any other place in the country. Moving beyond the French Quarter and tourist venues, the city is an asset-rich tapestry of diverse neighborhoods with distinct characteristics, passionate residents and dedicated community partners.

That reality invited us to pivot from emergency support to investments across the spectrum of the city’s community development needs. We found an invaluable ground-wire in the Greater New Orleans Foundation’s extensive and thoughtful programming in such diverse issues as water management, workforce development, economic opportunity and nonprofit capacity building.

The community foundation’s expertise and connections enabled us to explore how our engagement could weave across the disciplines in which we brought independent expertise:

• Pursuing commercial corridor redevelopment in Tremé/Iberville, Central City, the Claiborne Corridor, and Broad Avenue through a blend of arts and culture activities, small business funding, and public health strategies;
• Supporting revitalization of the Lower Ninth Ward through community planning, mixed-income housing investments, early childhood development strategies, and flooding mitigation and adaptation projects;
• Building the development capacity of community-based organizations led by people of color through support for a new community development finance institution, pooled dollars for community development organizations, and a small business development fund;
• Developing next-generation climate adaptation strategies through social investments in the installation of solar units and weatherization services to provide energy resilience to low-income households and places of worship during power grid failures.

Memphis

Over the last decade, Memphis has gone from a location Kresge knew in passing — where we saw similarities to Detroit and invested episodically — to a city we know well and to which we have intensified our commitment by building out each of our six roles.

We supported local efforts to promote broad-based civic engagement and table-setting through the Memphis 3.0 Comprehensive Plan, a racial justice consortium of some 50 community organizations, and the convening of higher education leaders.

We contributed to deeper and broader civic capacity by strengthening networks of human services organizations, encouraging local philanthropy to support the community development sector, and creating a small grants initiative for community-driven, neighborhood-level projects to promote physical change.

We exported our experience with Detroit’s Woodward Corridor Fund by first providing grants to the Memphis Medical District Collaborative, a partnership among major healthcare institutions, city government and neighborhood associations, and then extending a $6 million loan guarantee to help secure $30 million in commitments from private banks to create the Memphis Medical District Fund. The fund has telescoped what would otherwise have been a 15-20-year arc of housing and commercial development into five to seven years.

The success of this de-risking effort led to our launching a blended loan-grant fund — again, modeled after similar efforts in Detroit — designed to serve businesses owned by people of color who sought space in the district. We also worked with a housing nonprofit to create a source of loans for affordable homes for working families in the medical field. And we supported efforts to persuade the district’s eight healthcare and educational institutions to buy from local businesses and hire local residents.

Guided by long-time Memphis leader Carol Coletta, we furnished early and high-leverage support to the Memphis River Parks Partnership for the redevelopment of the city’s riverfront and the formation of a civic commons district comprising a library, park and art museum, all sending powerful signals about the long-term investability of the central business district.

We encouraged external funder collaboratives — ArtPlace America, LISC, ioby and the Strong Prosperous and Resilient Communities Challenge, among others — to invest in Memphis. We also funded the Memphis & Shelby County Division of Planning and Development to improve Memphis’s ability to draw down competitive funds from the Infrastructure Investment and Jobs Act.

We invested expansively in the city’s arts and cultural ecology, emphasizing activities that promote community development and civic engagement, including the Memphis Innovation Corridor project, the Memphis Music Magnet and the Historic Clayborn Temple.

Our work in Memphis suggests the high dividends that can be paid from the translation of ideas and approaches from Detroit. But it equally underscores the need for immersion in local context and trusted local relationships over the long-term – the precondition for being able to utilize the full toolbox of grant dollars, intellectual capital, lending expertise and connections to a national funding network and best-in-class technical assistance providers.

Fresno

Fresno is growing — indeed, it is the largest California city gaining population. Although 50% of the city’s residents are Latine, its population also comprises large and diverse Arab, Asian and Black communities. Dominated by the agricultural economy of the vast Central Valley, the city has the state’s lowest rate of economic mobility, with a poverty rate twice the nation’s average. As the city’s land mass has increased through annexation, poverty has concentrated in the central city and the southwest quadrant of the city. Municipal leadership — in both the public and private sectors — has seen underrepresentation of Black and Brown communities.

Each of these dynamics would appear to make Fresno a very different city from Detroit, limiting our ability to see connections between the two. Since our first engagement with the city a decade ago, however, it has become clear that the two communities share a suite of core challenges. Both are battling poverty and limited generational social and economic mobility. Both share histories of Black Americans migrating from the South, white flight and disinvestment in the downtown core. Both cities are seeking to address the enduring social and economic scars caused by highway development erasing the cities’ previously vibrant, predominately Black communities. And more.

As with New Orleans and Memphis, our earliest connections to Fresno came through grants targeting arts and culture, education and environmental causes. The intensification of those connections came in 2018 when we selected Fresno as a site for the American Cities Program-designed Shared Prosperity Partnership — comprising Kresge, the Brookings Metro program and The Urban Institute. We teamed with the Central Valley Community Foundation, newly led by the former Mayor Ashley Swearengin, to convene community leaders from a broad swath of sectors and political ideologies to identify steps the community could take to expand opportunities for low-income residents to participate fully in the region’s economic growth.

That convening was, in Swearengin’s estimation, pivotal to the creation of the DRIVE initiative 12 months later, a $4.2 billion, 10-year, 14-part investment plan to advance inclusive economic development, strengthen human development systems (including health care and education), improve public infrastructure and promote equitable neighborhood development. That framework, in turn, contributed to a steady flow of state resources into Fresno, including a $250 million commitment to fund infrastructure and affordable housing downtown. Fresno was also selected to be a stop on the state’s high-speed rail line linking Southern California and the Bay Area.

Kresge’s subsequent role has spanned cross-sector planning and collaboration (including a close working relationship with municipal government), community and economic development investments (including a loan to the Fresno Housing Authority), collaboration with other funders (most particularly the Irvine Foundation and the California Endowment), and support for the expansion of the community foundation’s operations and programming.

Our disciplinary teams have also elevated the prioritization of Fresno within their national portfolios, including postsecondary attainment through our Education team, preventative health through our Health team, resilient power to health centers through our Environment and Social Investment teams, expanded cultural investments through our Arts and Culture teams and a guaranteed basic income pilot program through our Human Services team.

The Six Roles Across the Four Cities

When we set tables, we give form to systems that didn’t exist before. When we derisk transactions, guarantee value or guide outside dollars to ground, we show that money can move outside customary and often rigid channels, prompting capital to flow with a different valence to low-income families and low-wealth communities. When we build capacity and give people affected by dysfunctional systems more robust tools to change them, we create new civic nodes and new connective tissue. Through all of these, we are deconstructing the underlying norms and values that guide “how things get done” in cities.

Kresge continues to learn, city by city. It is a process that is nuanced. That is contextual. That is multifaceted. But it has affirmed that there is a meaningful and compelling role for philanthropy to play in helping set the long-term trajectory of American cities. That role is not to stand outside the fence-line of civic decisionmaking. It is not to wait for the perfect moment. It is instead to embrace our uniqueness while recognizing our limitations … to work in an integrative, crossdisciplinary way without becoming paralyzed by complexity … to recognize the imperative of patiently chipping away at the intractable without sacrificing a sense of urgency.

It is in this spirit that The Kresge Foundation’s centennial both impels us to reflect on the path we’ve traveled and invites us to interrogate how best to move forward.