The Kresge Foundation began exploring what it refers to as “social investments” in 2007. At that time, the foundation was seeking out ways in which it could leverage its assets to accelerate change outside of its traditional grantmaking. Out of this exploration came Kresge’s Social Investment Practice program.
Unlike other impact investing foundations that make direct investments in social enterprises, Kresge is quick to point out that it rarely, if ever, follows the same line of practice. Instead, the foundation prefers to make its impact investments, which come in the form of grants, equity, loan deposits, and guarantees, in partner organizations such as community development finance institutions. These partners then provide direct funding to other organizations seeking funds that align with Kresge’s funding interests.
Not only is making direct investments unusual for Kresge, but investing in new technology is a bit out of the norm, as well. The foundation tends to direct its impact investments toward “advancing social good,” with a particular focus on housing, health care and education in order to revitalize and grow low-income communities. That said, these occasions may be rare, but not completely unheard of for the foundation. Case in point: Kresge recently put up an undisclosed amount of Series A funding to Fluxx, a tech firm that says it aims to lead the philanthropic sector into a new era in modern technology.
The $10.2 million funding round—which was led by Silicon Valley VC firm, Felicis Ventures—will allow Fluxx to accelerate the further development of its software platform and allow for its quick deployment down the road.
Fluxx’s software platform was built in response to the growing desire for philanthropic and corporate donors to streamline their grantmaking in such a way that it would become increasingly effective, transparent, and targeted. The software enables organizations “to visualize, track and analyze the progress of their funds.” The software also allows organizations to see exactly how grantees are spending their money. All of this information is available to Fluxx users any time, day or night, and from any device.
The Kresge Foundation recently began using Fluxx software, and is clearly a convert. However, the company has a wide customer base that contains a number of the country’s largest philanthropic organizations including the Packard, MacArthur, and Knight foundations.