The Kresge Foundation’s overall goal for its Social Investment Practice program is to find ways outside of the foundation’s traditional grantmaking by which it can leverage its assets to accelerate change in its main areas of funding interest.
This approach isn’t so unusual these days. However, one way in which Kresge is a bit divergent in this space is that it rarely makes direct investments. Instead, the foundation opts to make grants, equity, loan deposits, and guarantees to partner organizations such as community development institutions like the Local Initiative Support Corporation (LISC).
Back in 2012, Kresge, along with LISC and Morgan Stanley launched the Healthy Futures Fund (HFF) which supports the development of Federally Qualified Health Centers (FQHCs) and affordable housing efforts that incorporate healthcare programs in low-income areas. HFF also uses tax credits to expand access to affordable healthcare and housing in high-poverty areas. When the partners established the fund they did so with $100 million in joint backing via equity, loans, and grants.
That initial $100 million has already been fully invested. So, the partners got together again to launch a second round of funding for another $100 million. This time, Kresge’s financing reached close to $3.5 million.
According to David Fukuzawa, managing director of the Kresge’s Health Team, “This round of funding will allow LISC to build new partnerships between health centers and other types of organizations working to improve the social determinants of health in low-income communities.”
Kresge is backing the Healthy Futures Fund with a $2.5 million loan guarantee and a $916,000 grant that will be paid out over the course of two years. The grant was awarded out of Kresge’s Health program, which focuses on improving overall community health. The foundation’s loan guarantee was provided via its Social Investment Practice program, which supports social enterprises working in its areas of grantmaking focus including Arts & Culture, Community Development, Detroit, Education, Environment, Health, and Human Services.
The Kresge Foundation recently announced a $350 million Social Investment Practice funding pool, which the foundation plans to invest by the year 2020. The program will continue to use loans, deposits, equity, and guarantees as its main vehicles of financial backing.