annualreport2016.kresge.orgThe Kresge Foundation 2016 Annual Report

Group Created with Sketch. 2016 Annual Report 2016 Annual Report Letters Financial Report Our Impact Route 1: Capital Access and Deployment Making available and ensuring the effective use of non-grant capital, often at below-market terms, for sustainable social outcomes. Route 2: Field Building Connecting fragmented players in an area of work to create an organized industry around an issue or challenge. The goal is for the field to operate more effectively and efficiently, to surface best practices and to improve outcomes. Route 3: Interdisciplinary Combining two or more programmatic disciplines or fields within one grant or investment to support social change. Route 4: Investing in Innovation Investing in organizations that offer innovative solutions, often with the goal to scale up regionally or nationally. Route 5: Learning Networks Bringing together a group of individuals who share a common concern, practice or interest to impart ideas, create new knowledge and advance innovative ways of collaborating to bring about systems-level change. Route 6: Local Problem-Solving Providing training and other operational and management assistance to grantees. The goal is to enhance the effectiveness of organizations and their individual leaders to better solve local problems and challenges in their own communities. Route 7: Policy Change Funding research, backing education campaigns and supporting organizations involved in grassroots organizing and outreach to support policies that create opportunity for low-income people. Route 8: Public-Private Partnerships Building collaborations among the public, private, nonprofit and philanthropic sectors to address complex, multifaceted challenges in America’s cities. Instead of working in parallel, we actively shed predefined roles and look for opportunities to work together for a common good. InterCHANGE Many routes, singular purpose: Expanding opportunities in America's cities Elaine D. Rosen Chair, Board of Trustees Letter from the Board Chair While the Upcoming Challenges are Great, We are Greater Read full letter Letter from the Board Chair While the Upcoming Challenges are Great, We are Greater By Elaine D. Rosen Chair, Board of Trustees I recently and quite by accident came upon a note I had sent to our foundation staff at the end of 2016. Following a successful fourth-quarter board meeting, I wrote, in part: Please do remember that while the upcoming challenges are great, we are greater. Our work is strong and our talent ... well ... that simply blows the mind. In the year ahead, we will navigate several new realities carefully and wisely – led by Sebastian Kresge’s mission and our values as an institution. The discovery of the note took my breath away. When I wrote it, the uncertainties of December had not yet given full view to the pace and extent of a new governing and policy-making environment. What centers me while considering the impact of changes since then is remembering that philanthropy by its nature is steady – and steadfast. Since 1924, The Kresge Foundation has been carrying out our founder Sebastian Spering Kresge’s mandate to promote human progress through grant making. And since 2006, we have developed a strategic philanthropy that engages an array of tools to expand opportunities in America’s cities. During these 93 years, our government leaders and prevailing ideologies have come and gone. The political climate has bended and shifted. The economy has experienced peaks and troughs – and after those troubling troughs, always a healthy rebound. Through it all, The Kresge Foundation has remained focused and a force for change to promote the greater good. That focus is more important than ever when government actions create chaos and new policies seem to threaten the most vulnerable among us. In response, we are taking stock, adjusting our course, playing with the hand we are dealt. For those reasons, the Kresge Board of Trustees authorized for 2017 an increase in the foundation’s capacity to engage with issues and movements precipitated by the new political and policy environment by making selected one-time grants as well as long-term investments. But we will not be shaken from that for which we stand. We will lead with our values, driven by the credo of our founder to leave the world a better place than we found it. We will persevere. Certainly, we all realize that philanthropy is incapable of fully replacing government supports – the 2014 U.S. federal budget was nearly four times the assets of all U.S. philanthropies combined. That said, we have the will and wherewithal to respond when ill-advised government cutbacks result in human fallout. We will stand for equity and justice. The implications of rolling back social programs and supports are profound, especially toward people in cities who do not seek a handout, but rather, a hand up. We will concentrate our work in cities. More than 80 percent of the U.S. population lives in and around cities where strong, bold, visionary leadership on the ground is yielding positive outcomes from coast to coast. We will defend science: Fifty years of data show that climate change is as real as the urgency to address it. We will stand for facts and truth. Period. We will continue to believe in the strength and resolve of American talent and the power of citizen-leaders in communities urban, rural and in-between. We will remain nimble, prepared to act as circumstances require, our minds focused, our tools at the ready. In Appreciation On behalf of all our trustees, I note with regret that two people I so dearly admire will depart the Kresge board in 2017 after serving their 16-year terms. It is hard to consider our board without their presence. Irene Hirano Inouye, who preceded me as board chair, has been a personal mentor and role model to most of us on the Kresge board. Among Irene’s countless talents and contributions, her knowledge has brought Kresge to the forefront of good governance and her grace and leadership have raised our board discourse to a superior level. I got to know Lee Bollinger while successfully co-leading the search for our new president in 2006 (successful in that it resulted in Rip Rapson’s appointment). Lee is an inspirational thought leader who has helped open my eyes to the breadth of the foundation’s philanthropic potential. We are indebted to Irene and Lee. They will be missed beyond measure. Share this letter! Rip Rapson President and CEO Letter from the President At the InterCHANGE of Imaginative and Bold Read full letter Message from the President At the InterCHANGE of Imaginative and Bold By Rip Rapson President and CEO In 2016, we marked a decade of continual reorientation at The Kresge Foundation. Over the course of some 80 years since its founding in 1924, Kresge perfected the art and science of challenge grants, a tool to help nonprofit organizations expand their base of individual donors as the final piece of campaigns to construct libraries and college science buildings, art centers and hospitals. The Kresge brand became iconic. Indeed, we contributed in the most tangible ways to the completion of thousands of building projects of unquestionable importance – in our hometown of Detroit, across America and around the world. But our toolbox was, ultimately, limited to a single instrument, and the increasingly complex and nuanced world of capital fundraising had begun to relegate Kresge’s contributions to the margins. Our trustees appropriately began to ask if it wasn’t time to reassess our aspirations and adjust our methods. Going for a Ride That appetite for a refreshed perspective is captured in a story Elaine Rosen, our board chair, tells about her conversation in 2006 with fellow board member Lee Bollinger. The two were co-chairing the search process for a new Kresge president, which had begun to crystallize the possibilities of a different institutional aspiration. “What would it look...