The S.S. Kresge Company was 25 years old in 1924. Sebastian S. Kresge himself was 57. To commemorate the anniversary of his growing company, on June 11 he established The Kresge Foundation in booming Detroit, where the auto industry, also 25-years old that year, had spawned rampant growth and widespread prosperity. The foundation listed its goals as promoting “philanthropic and charitable means of human progress.”
His initial donation to the foundation was valued at $1.357 million, which included the contribution of real estate and leases worth $1.557 million and the assumption of a $200,000 loan. He reasoned that contributing these assets was “more convenient” than giving cash, and directed the foundation to use the income gained “to benefit humanity. In the Articles of Incorporation and Declaration of Trust document used to legally establish the trust, Sebastian declared that the foundation “shall be a self-perpetuating body.” The document also outlined a repayment clause, requiring that 50% of the trust’s annual net income be paid to him until the original donation value was repaid. However, in 1925, Sebastian waived the payback clause and amended the legal documents by accepting $1 from the foundation as full repayment.
Sebastian named himself treasurer. He appointed lawyer Paul Voorhies as the foundation’s president and his cousin, Amos Gregory, as secretary. The trustees met for the first time in 1925—their initial disbursement was $100 to the Salvation Army of Detroit.
The foundation made a splash in 1926 when S.S. Kresge made additional contributions and publicly annouced the creation of the foundation. “I have donated to the foundation real estate, leaseholds and securities valued at approximately $2 million,” he wrote. “I am presently donating to the foundation 500,000 shares of common stock of the S.S. Kresge Company, having a present market value of approximately $22,500,000.” These initial and subsequent stock contributions would serve the foundation well: throughout much of its first half-century, ownership of S.S. Kresge Co. (and subsequently Kmart) stock helped the endowment grow exponentially.
Also that year, the foundation granted $100,000 to the building fund of the Detroit YMCA. Equal amounts were added in three successive years for a total of $400,000. The Kresge Foundation made its first capital grant in 1927, with a $225,000 gift to the Methodist Children’s Home Society to purchase land and build a new home to care for children left orphaned or neglected in the Detroit area. The foundation also pledged $50,000 a year for 10 years to endow and cover operating expenses for the organization, which had been created in part by Sebastian’s wife Anna a decade prior.
In 1929, the foundation made its first two challenge grants, disbursements that would become a model for its giving. Trustees approved a $5,000 gift to the Clarke School for the Deaf in Massachusetts, provided the school raised $2 million. Later in the year, the trustees committed $25,000 – half the construction cost – to build the S. S. Kresge Consolidated School in Kresgeville, Pennsylvania, to be advanced when the other half of the money had been raised.
During the Great Depression years and beyond, creditors pressed churches to repay their debt, while churches subsequently pushed to expand facilities for the country’s growing population. The foundation helped churches alleviate debt and extensively funded building expansions until the end of World War II.
In 1930, Sebastian and Anna’s oldest son, Stanley Kresge, was elected to the Kresge Foundation Board of Trustees as vice president. Stanley began working for the family retail business as a stock boy and was advancing through the management ranks at the time he joined the foundation.
The foundation made several notable grants in the fields of science and medicine during the late 1930s and 40s. Wayne (State) University (WSU) received its first private donation from Kresge in 1938 for $1 million to construct the Kresge Science Library.
The foundation’s first medical grant was made to the University of Michigan for $15,000 in 1941 for the study of the common cold, and in 1949 Kresge awarded the university $3 million for a medical research building. It was the foundation’s first commitment of $1 million or more.
In 1944, the foundation purchased the complete Hooker Scientific Library on behalf of WSU. The collection is an internationally known archive of more than 21,000 volumes of contemporary and early scientific periodicals. WSU, for a time, housed the collection in its Kresge Science Library; today it resides in the STEM Innovation Learning Center on campus.
With a grant of more than $600,000, the foundation also played a vital role to create the Kresge Eye Institute in 1948, fulfilling the dream of ophthalmologists A.D. Ruedemann Sr. and Parker Heath, who, after the war, saw that Michigan needed a comprehensive eye care center. The foundation continued to fund the eye institute for 20 years until it was made part of WSU in 1968; it was a rare case of the foundation supporting the establishment of a new institution.
The new millennium brought new faces, new ambition and a new strategic vision to the Kresge Foundation. Bruce Kresge was elected chairman of the board in 2000 and retired in 2003 after 37 years with the foundation.
Rip Rapson, President of the McKnight Foundation in Minneapolis, was named Kresge’s president & CEO in 2006. Under Rapson’s leadership, Kresge has made more than 8,000 grants exceeding $2.9 billion; and 152 social investment commitments exceeding $510 million.
In 2007, the foundation made a major change to its grantmaking process. Trustees decided to take Kresge’s nearly $4 billion assets “out for a ride” by “radically” expanding beyond capital challenge grants. Kresge began to offer grants based upon new “value criteria” that included creating opportunity for low-income people; contributing to an institution’s transformation; involving thoughtful risk-taking and encouraging collaboration. The development heralded the arrival of a new philosophy of “strategic philanthropy,” emphasizing targeted giving in six priority areas: arts and culture, community development/Detroit, environment, education, health and human services. The foundation also opened eligibility for education grants to community colleges.
To focus its growing investments in Detroit, Kresge adopted a five-part strategic framework: revitalizing downtown; recalibrating the regional economy; stabilizing neighborhoods; enhancing the environment; and promoting a robust arts and culture ecosystem.
The Kresge Foundation entered the second decade of the 21st Century deepening its commitment to Detroit – and began working more intentionally in Memphis and New Orleans.
When Detroit became the largest U.S. city to file for bankruptcy protection in 2013, Kresge contributed $100 million to the collective effort to ensure the city met its pension obligations and preserved the priceless collection of the Detroit Institute of Arts. Known as the “Grand Bargain,” the fund grew to more than $300 million and, according to numerous experts, played a key role in allowing Detroit to exit bankruptcy proceedings swiftly and successfully.
In 2015, Kresge trustees approved a commitment to deploy $350 million in social investments (investments that aim to achieve both a social purpose and a financial return) by 2020, with the goal of attracting an additional $1 billion from other investors.
Also in 2015, Kresge Innovative Projects: Detroit launched a $5 million initiative to fund Detroit-based nonprofits in transformative projects across the city.
The foundation launched Kresge Early Years for Success – KEYS – in 2016. Its goal was to strengthen the city’s early childhood education and development systems to ensure all Detroit children grow up ready to learn in kindergarten and beyond. The same year, trustees voted to pivot the foundation’s Detroit Program strategy – which had heavily invested in the city’s urban core – to focus on the city’s neighborhoods.
Also in 2016, the foundation began to help Marygrove College through financial issues and chart a path forward for the campus and surrounding neighborhood on the northwest side of Detroit. Two years later, trustees approved a $50 million commitment to evolve the project into a cradle-to-career campus that will eventually host 1,000 children in an educational setting. In 2019, the freshman class entered Marygrove High School.
The second decade of the 21st Century opened with the Covid-19 pandemic beginning in March 2020. Kresge committed $17 million in grants and $2 million in social investments to support partners in response to the virus. The foundation also extended additional flexibility, expediting grants and amendment decisions and suspending reporting to ease the burden on grantees.
As the nation reacted to the murder of George Floyd in Minneapolis in 2020, the foundation made a $30 million grant commitment to nearly 60 local and national organizations working to advance racial justice, a “pivotal institutional milestone” as Kresge doubled down on its commitment to racial justice organizations across the nation and especially in the cities of Detroit; Fresno, California; Memphis; and New Orleans.
In 2020, Kresge awarded 742 grants – the most ever in a single year and its endowment surpassed $4 billion in value.
Kresge’s project at the former Marygrove College in Detroit took further shape. In 2021, the $18-million state-of-the-art early childhood center opened, and grades K-2 began in the Immaculata Building. The first group of high school seniors graduated from The School at Marygrove. The class consisted of 95 students, 87 of whom started as freshmen. Through 2023, Kresge’s total investment in the campus has exceeded $75 million.
Kresge surpassed $500 million in social investment commitments since first entering this space in 2008. Through program-related investments, loans, equity investments, strategic deposits and unfunded guarantees Kresge has reduced risk for other investors working toward common social outcomes. The commitments have leveraged more than $1 billion from other investors, allowing the foundation to use its endowment in new and impactful ways.
In 2022, Cecilia Muñoz assumed the role of chairwoman of Kresge’s board. She is the tenth leader – and fifth woman and only Latina — to hold the position during the foundation’s 100-year history.
The foundation is now focused on deepening its place-based community development work in Detroit – and cities around the country particularly in Kresge’s focus cities of New Orleans, Memphis and Fresno.