The following is a conversation between Rip Rapson, President & CEO of The Kresge Foundation, and Denver Frederick, the Host of The Business of Giving.
Denver: The Kresge Foundation is a private national foundation that seeks to expand opportunities in American cities through grant making and social investing in arts and culture, education, environment, health, human services, and community development. Based in metropolitan Detroit, the foundation is celebrating its centennial anniversary this year. And here to discuss that and more with us is Rip Rapson, the president and CEO of the Kresge Foundation.
Welcome back to The Business of Giving, Rip, and congratulations on your centennial.
President & CEO of The Kresge Foundation
Rip: Well, thank you, Denver. It’s an exciting time for Kresge, and so I think in some ways, a sort of a watershed year for our community as a whole.
Denver: For sure. Well, the Kresge Foundation has undergone a remarkable evolution over that hundred-year history, as might be expected. Walk us through a little bit of it and some of the pivotal moments and milestones that have shaped the foundation’s journey.
Rip: Kresge, as you mentioned, Denver, has been around for a century now, and it was begun by Sebastian Kresge in 1924 in the way that a lot of philanthropies of the time sort of started. It’s almost like pocketbook philanthropy. It was someone who had deeply, powerful and good intentions to try to make the world a better place. And so he gave where he felt his money would go the longest way.
But what ended up happening rather quickly is Kresge decided that he really wanted to concentrate on public infrastructure– buildings, museums, college campuses, hospitals, art museums, whatever it might be. And slowly, slowly over the course of the next many decades, he built up a repertoire of giving to nonprofit organizations… not just to build their buildings, but to sort of help them figure out how, over the longer term, they could build their capacity to fundraise.
And so by the ’70s and ’80s, that had morphed into an approach that is now commonplace but then was pretty revolutionary, called the Capital Challenge Grant. Kresge would essentially put its intention on a table and say, “If you’re able to raise from individual donors a certain amount and complete sort of the giving pyramid of your campaign, we’ll match it and get you across the finish line.”
So for the better part, probably of, oh gosh, 25 years, Kresge and its leadership refined that process within a hair of its life. It became a hugely precise, highly structured and enormously effective way of helping nonprofit organizations build out their donor base, expand their capacity, and in the process, build a building.
But by the time I arrived in 2006, the field of development had kind of caught up with Kresge. There were a lot of folks who would study the Kresge method of fundraising, and all of a sudden you had gifts of enormous magnitude that would just dwarf a Kresge gift. Or you would have organizations that had kind of figured out how to game the system a little bit.
They’d line up all their donors before they even came to Kresge. And then…
Denver: Yeah, I got it.
Rip: …the Capital Challenge would land. Nothing wrong with that. It was all to a good end. But I think the board of Kresge determined that it was time to pivot. How much of a pivot, in what direction, to what purpose, wasn’t clear.
But when I came to Kresge, we had long conversations about whether it might be possible to sort of think a little bit differently about the role of capital in the nonprofit environment. So we began simply by saying, “If there is a way to move beyond simply capital campaigns to different forms of capital– operating capital, planning capital, endowment capital, whatever kinds of capital– we’re good at that. So why don’t we start there?”
And then I suggested to them that if that were the case, maybe what we could do would be to think about whether some values ought to sort of infuse that giving. Under the old Capital Challenge Grant, as long as you were a nonprofit and as long as you sort of filled out your gift chart properly, you were fair game for Kresge.
There was no real sense that it needed to be innovative, or it needed to be environmentally sustainable, or that it needed to have a broader impact in the community. And so we began exploring whether there might be some of those values that could inform our giving, and then to make a really long story short, slowly, slowly, slowly, we sort of depreciated our asset.
Each year, we sort of asked: Are there things that we’ve traditionally done that we could probably shed? Are there things that we’ve traditionally done that we should hang on to? And within four or five years, lo and behold, we had a foundation that was much less focused on capital and much more focused on different fields of work, as you mentioned.
Denver: Yeah.
Rip: Higher education, health, arts, and the rest. And we built out programs and began to look like a lot of other foundations in America. And so that kind of took us out of the capital world and into the world of modern philanthropy.
Denver: And that’s a good lesson on change you just gave there too because sometimes when you come in, you want to make change too dramatically. I love the way you kept the word ‘capital’ in there, all the other types of things. And then sometimes you just do a little bit every year instead of jolt people in.
As I recall, Rip, these conversations didn’t start when you got to Kresge. They actually started in the interview process. I mean, you took this on right from the get-go.
Rip: Well, it’s funny you had mentioned that because I was happily rooted in Minneapolis. I had been at McKnight Foundation for many years, and when the search firm called, I told them that I really wasn’t interested in picking up my young family and moving them to another place.
And the search consultant was smart enough to say, “Well, no, no, don’t worry about that.” Just come and give them advice. And so I came and gave them some advice, both about how they might think a little bit differently about their grant making, but also about how they might work in place in Detroit, the way McKnight had worked in Minneapolis and St. Paul.
And one thing led to another, and the search committee was an enormously interesting group of people. And the more we talked, the more it seemed like we were prepared to do something a little bit different. And…
Denver: Very cool.
Rip: …it became a proposition that was irresistible at the end.
Denver: Yeah. Well, probably the right guy at the right time is how so many of these things happen.
Well, let’s talk about Detroit. That has been the centerpiece of your urban revitalization efforts. And I recall we had a wonderful conversation about it a number of years ago. But what were the guiding principles and key strategies employed in supporting the city’s renaissance that have proven to be applicable to other places?
Rip: That’s such an interesting question, Denver, because in some ways, the maelstrom that was Detroit in 2008 and 2009 demanded a very traditional form of responsive philanthropy. Someone just needed to step up and just help the city kind of maintain its equilibrium during a time when the autos were in bankruptcy, and the foreclosure crisis was ravaging the neighborhoods of the city, and the economic downturn was affecting everybody in America.
And then as I think many people remember, we were in the middle of a political corruption crisis. And so there was just this sort of deeply disturbing set of circumstances that required us just to try to be helpful in some way. But when the dislocation is that pervasive and deep, it required us to, in fact, think about what a foundation with limited resources could do that would actually make a difference.
And so we actually were forced out of a purely responsive mode because every organization in town could have used a grant at that point. But that really wasn’t the purpose. The purpose was to try to figure out whether we could create enough stability in the community to sort of hold on until the private and the public sectors resumed their rightful role.
And so we evolved nine bodies of work that drew on existing energy, existing capital, existing leadership. And that fell into categories as diverse as land use or transit or arts and culture or commercial corridor revitalization, and tried to figure out what was in our toolbox that would permit us to help create that kind of stability… Almost a scaffolding that would hold until things turned around.
And that, in turn, I think required us to think less in terms of just moving grant money into community. That just wasn’t enough. You couldn’t spend enough in Detroit to stabilize it if you were, you know, the Gates Foundation or the US government, frankly. I mean, it was just a really tough time.
Denver: Yeah.
Rip: And so, what we ended up finding was that there were a suite of roles that philanthropy played, some of which involved money, but some of which didn’t involve money that were really critical to creating the kind of equilibrium that was necessary.
And in 2013, when the bankruptcy was in full swing, Judge Rhodes, the bankruptcy judge, asked me to come testify about how we had essentially constructed that scaffolding, and what would give him confidence that that scaffolding would hold into the future.
And I said to him that it was, in many ways, those roles that would endure. It wasn’t the specific investments that we had made in transit or neighborhood revitalization or arts and culture. It was how we had approached the challenges of the work because it was going to be a constant adaptation to a constant changing of circumstance.
And so when I laid out those six, he kind of smiled and he said, “It wasn’t exactly the answer I was expecting.” And I said, “Well, again, our commitment to the court and to the city of Detroit is to continue to play those roles even as the circumstances and as the issues change.” And that seemed to get his attention.
And I actually did a conceptual drawing that they allowed into evidence, although the creditors who were fighting us tooth and nail couldn’t, for the life of them, figure out what this goofy drawing was doing in evidence in a bankruptcy trial. But it tried to lay out these six roles for Judge Rhodes.
Denver: Well, that’s another claim to fame that I didn’t know– one of those drawings was admitted as evidence. That just puts it in a whole different category. Well, since then, you’ve been on the leading edge of the role that philanthropy can play in community change.
And you talked a moment ago about some of those six roles they can play. So let me ask you at least about a couple of them starting with table setting. What exactly is that? And I know a wonderful example you’ve cited in the past has been the work you’ve done in early childhood development. Talk a little bit about table setting in that example.
Rip: As I think is probably appropriate to each one of these roles, there’s sort of a shorthand, and then there’s a sort of the more nuanced explanation. Table setting is, at root, the ability to have community conversations that are just too difficult for the other sectors to have.
So if you’re in Detroit and you’re besieged by pervasive blight and abandonment, it’s very hard for city government to talk in real terms about what the implications are, neighborhood by neighborhood, or systemwide.
So, Mayor Bing, in the early 2010, 2011 period said: I really need to figure out a way to get our community to talk in very realistic terms about just how bad blight is, the extent to which we need to demolish some of these homes, the extent to which we might even need to restructure neighborhoods.
And the minute he began talking about that publicly, there was just this enormously ferocious backlash. “Are you telling us we can’t stay in our homes? What do you mean?” It was just very difficult. And so, to table set meant that you needed to have an entity, like Kresge, that didn’t hold an election certificate or wasn’t reporting back to its shareholders.
Denver: Right.
Rip: Simply gather the right people around the table to begin talking about what options the community might have, and then take the follow-on steps to perhaps invest in a new planning process or a new community engagement process, or a new way of coming at some of these issues.
And as you suggested, early childhood is another good example. Just early childhood is, in some ways, one of those questions that Detroit has never been able to get its hands around. It’s not really K-12 education. It’s not really maternal healthcare. It’s something in between where you’re trying to get kids ready to enter the schoolhouse door, ready to learn. And so Kellogg Foundation, the Kresge Foundation table set.
We sort of got a number of people together to try to scope out the problem– folks from community, folks from the professional community, folks from the public sector, and began trying to describe what a system of comprehensive, effective early childhood might be.
And that was one, unlike the blight and abandonment, which we ultimately handed over to the city because they needed to hold the complexities of demolition and renovation and all that. That was one that we continued to hold and continue to hold to this stage just because there is sort of no other logical entity to sort of hold those issues, to invest in those issues, to gather people around those issues.
So table setting is just trying to find those issues that are really third rail issues in a community that philanthropy can step forward and embrace, and presumably bring to a different point of conclusion.
Denver: Yeah, it sounds as if such an important part of that too is building relationships because very often when we come together, we are all looking for that common agenda and goal and where we’re going. And it’s like, No, just take your time and get to know each other. You know what I mean? And trust one another. There’ll be plenty of time for that, and that’s what table setting can really do.
Rip: It’s so interesting, Denver, after the bankruptcy, there was a lot of interest in how philanthropy had played a role in Detroit, both before the bankruptcy, during the bankruptcy, and then coming out of bankruptcy. And so I get a lot of calls, particularly from community foundations in Florida and Texas and California, all over the place. There was a genuine curiosity.
And when I would run through these roles, and we can talk about the others if you like, but when I would talk about something like table setting, they would say,” Oh, well, we don’t have a Kresge in Orlando; we can’t do that.” I said, “Well, how about your community foundation? Or how about your business partnership?”
Or how about someone who has enough distance from sort of the day-to-day pressures on a public official, or the day-to-day pressures on a private sector organization to build those kinds of relationships? And I said, “So, even if you don’t have a Kresge, you certainly have organizations that are trusted in the community… might be the League of Women Voters who could impartially begin those kinds of conversations.”
And I think as one scrolls through these other roles of helping build capacity, or taking investment risk, or serving as an impetus to build out more appropriate public infrastructure, whatever the roles are, there is someone in a community who is uniquely well-suited by virtue of these relationships to take it on.
Denver: Yeah, be the convener. That’s such an important role that we underappreciate.
Well, let’s talk about risk. And I mean, another one of these roles would be to peel away the risk and maybe let the private sector know that: Hey, you know, the water’s fine. Come on in.
Rip: Easier said than done.
Denver: Yes.
Rip: In some ways, philanthropy is society’s social venture capital. And when we make a grant, in some ways we’re not taking any risk whatsoever. If the grant doesn’t work, we weren’t expecting repayment anyway. But if your point of focus is to try to encourage the markets to enter a territory that they’ve either completely ignored, or at least pushed to the margins, that’s a different kind of risk taking.
And so in Detroit, for example, our central corridor, the Woodward Avenue corridor runs all the way from the river, all the way up to the city limits at eight miles. And it is, without question, the most important commercial corridor in the city. And from 2007 to 2011, there was no investment along that corridor. Just none. And yet, that’s where our arts organization sits. It’s where our educational institution sits. It’s where our healthcare institutions sit.
And so we, at Kresge, with the help of others, decided to make a series of investments that simply didn’t pencil for the private sector, in housing, in commercial activity, even in a couple of cases in light industrial activity, just to create some demonstration that if you stack your capital properly, and you push the risk for a private investor down low enough, you can actually make these transactions work.
And we started with something called the Woodward Corridor Investment Fund, where we simply put in place some guarantees to some lenders. Those lenders then put their capital in the mix, and then there were sort of more traditional lenders underneath them. And by the time the projects got up and going, we realized that it wasn’t quite as risky as it appeared.
And so over the next many, many years, it was as if we had started a flywheel, and all of a sudden, the markets were more and more willing to invest for any number of reasons. We had also run light rail up the corridor that helped sort of signal that it was not as risky. We had underwritten some nonprofit activity along the avenue that also suggested there was a quality of life going on the avenue.
So through a constellation of investments, you can kind of signal a very different market reality. And in fact now, however many years later, 10 years later, we’ve had billions and billions and billions of dollars invested along the Woodward Avenue corridor. I would never presuppose to say that that was because of Kresge, but it certainly helped set in motion a set of activities that the private sector could recognize and could internalize.
Denver: Yeah. Sometimes just putting a shovel in the ground and getting something started, even if it makes no sense, can change the way people think about a place.
Rip: Well, I don’t mean to go on, but a quick example that is both a source of pride and a little bit of embarrassment is that one of the co-founders of Whole Foods in the middle of this came to us and said: We’ve been looking for years at trying to create a market presence in Detroit, but we just can’t. We can’t make it work, that the numbers just don’t work.“Would you guys be willing to invest the initial $1 million or two in that?”
And I thought, Well, you’re a for-profit entity, and I thought. Well, but that is exactly what this role would suggest, right? That this is a private market player hoping to start something a little bit different, but can’t see his way through the risk.
So we invested the initial million dollars. We attached to that a set of conditions about employing local residents, about having community meeting space, about different pricing models. And sure enough, the Whole Foods landed right on Woodward Avenue.
And I’ll never forget, I think it was three or four months after the opening, that the same co-owner called me and he said, “Rip, the good news is that you guys are outperforming per square foot every other Whole Foods in America.” I said, “Oh, that’s terrific. So that means you’ll pay us back.” He said, “Well, no, not exactly. I just thought you would like to know.”
Denver: Yeah. The bad news, yeah.
Yeah. Well, you’ve had a habit of saying yes to those things. I think I remembered the story with Roger Penske, and a number of things have come your way and you say, “Eh, I’ll deal with that later. Let’s go ahead.” But you have to have that audacity every once in a while, when it doesn’t fit exactly, but it’s close enough that you know that the upside is way, way greater than the risk.
We have time for one more. Let me talk about the role philanthropy can play in acting as a sherpa, and maybe helping make sense of a place.
Rip: Particularly during the convergence of the economic downturn, the auto bankruptcy, and Kwame Kilpatrick’s troubles, people from the outside had a really hard time discerning why this wasn’t a case of just turning out the lights and declaring Detroit history.
Denver: Yeah.
Rip: And it happened in a number of ways. I got a call from the new president of the Ford Foundation, Luis Ubiñas, who basically said, “Rip, I’m just not at all convinced having read the papers that Ford should maintain its investment portfolio in Detroit.” Well, that was pretty shocking.
And then, I got into a board meeting in which a couple of our trustees said, You know, my goodness, we’re looking at the front page of all of the national newspapers, and they’re basically declaring Detroit dead. You know, you should probably just sort of pack it up, and we should work somewhere easy like Newark.
Denver: Yeah, cut your losses. Come to Newark.
Rip: And then the kicker was, I got a call from a guy named Derek Douglas who was on President Obama’s domestic policy council. And Derek said to me that he had just come out of a cabinet meeting and the president had pounded the table and said, “I will not permit Detroit to become the Katrina on my watch. We got to do something.”
So Derek relayed that, and I said, That’s great. What do you propose to do? And he said: I have no clue. You guys are so confusing. It’s so incoherent. It’s such chaos there that we don’t know what to do. So, whether it’s from the Ford Foundation or my own board of directors at the White House, there was a clear need to try to provide some ground truth.
And at that point, I did go back to my office and sort of tried to map out the bodies of work that we were engaged in where I thought there was real possibility of traction, how those bodies of work could sort of be mutually reinforcing, sufficiently create that kind of scaffolding we talked earlier, and then relay that back.
You could relay that back to Ubiñas. What I did, I got on a plane, and I sort of laid out this drawing to them and I said, You know, here there really is more going on here than you would know. We spent an entire board retreat talking about this, and I was able to have a series of conversations with the Obama administration, with HUD and the domestic policy council and others, to try to help them land.
And they needed someone to help ground truth. Again, the public sector was just in chaos, and the private sector was in a bunker. There just was no place for them to learn what might make sense and what might not. And I think that with the huge waterfall of federal dollars that we’re now experiencing, this is a particularly important role.
I mean, think of the role of community-based organizations, like a community foundation or a Heinz Foundation or a Kresge Foundation, trying to help understand where you can optimize federal dollars in a way that is contextual, in a way that’s respectful of community, in a way that’s reinforcing of existing community energies.
It’s a powerful role if done properly. I mean, I think what we often assume is that the mayor’s office is that conduit, that sherpa, but there’s often an agenda there. There’s often turnaround and turnover there, and so this is sort of a long-term role a foundation can play. It’s just helping others make sense of a place.
Denver: Yeah. And I think especially since the Biden administration, there is just a plethora of dollars and programs. And frankly, it’s mind-numbing in terms of somebody who doesn’t have the kind of staff who would be able to… even if you do have the kind of staff just to work your way through…
I guess you don’t want to make people dependent on philanthropy. But on the other hand, that’s such a role that it is exponential to what most foundations are able to do with their own corpus.
Rip: Yeah. Yeah. We have found, for example, that in program, after program, after program enunciated by the feds, you have deeply compelling intention, ample resourcing, and the implementation mechanisms simply don’t exist.
You cannot move these dollars to ground. And you can move them to big mega projects, sort of traditional public works projects, but actually moving them to communities and residents and neighborhoods that have long been outside of the investment calculus, where you actually are trying to advance issues of equity or environmental sustainability or public health, is very difficult.
Those are fragile delivery systems, and sometimes these dollars can overwhelm them. And in other places, I mean, it’s hard for a smaller locality to even know what’s possible. I mean, there’s something like 570 different federal fund flows now sort of actively going on. It’s hard if you’re Duluth, Minnesota to sort of make sense of all of that.
Denver: No question.
Rip: And again, maybe a combination of the public sector and the philanthropic sector and wise local federal officials can make all the difference in the world.
Denver: Yeah. Yeah. And I think it’s a bit… you know, I’ve talked to some people in Washington about this… it’s a bit of an epidemic that when legislation is written, the moment it’s signed, there is no way to implement that legislation. There’s no mechanism that’s possible.
And also, we live in a society that glorifies the legislation and pays no care to the implementation of it because it is like scaling…nobody cares about scaling. We care about the innovation. Look at this! Look what this can do, you know? And then the scaling, all that’s gray and mousy and boring, you know? So it sort of permeates society as far as I can see.
Rip: Well, my latest preoccupation is whether this isn’t a moment both for community development finance institutions and for community foundations… that these organizations that are really adjacent to ground who really could play a powerful role in helping these funds land equitably have their own capacity questions.
So now CDFIs are completely behind the 8- ball because interest rates are so high, and they can’t really do what they’re good at. Community foundations are so tied up with donor-advised funds that they really don’t have the discretion to move in innovative ways.
But I would guess that in five or 10 years, if we were to look back, this might be a moment in which both the CDFI community and the community foundation community came into their own because they need to.
Denver: Yeah. Yeah. Let me ask you a couple things about some of your strategic foci, and I’ll run through maybe three or four of them.
Let me start with your racial equity initiatives. That has been so central to Kresge for such a long time. Tell us what you’re doing in that area right now to promote racial justice.
Rip: Well, I think it started home. We probably began, now a decade ago, trying to both diversify our workforce and to create environments in which diversity and inclusion were primary values. And I think you can’t really proceed without that happening.
But I think after George Floyd’s murder, there was a sense in our foundation, and I suspect in many, that simply goodwill toward disinvested neighborhoods, different disinvested places, wasn’t enough. That we really needed to elevate the role of racial exclusion, impediments to racial inclusion in a much more direct way.
We struggled for quite some time about what word to attach to that. Was that a question of equity, or was it racial equity? And the conversation was sort of heated. Should this be colorblind? Should it be targeted? Should it be this, should it be that?
And we decided that at the end of the day, attaching race to our decision-making process was really important because there were so many impediments particular to race, particular to racial history and legacies of injustice, that you just simply had to come at them in a much more direct way.
So in the aftermath of Floyd’s murder, we developed an investment portfolio that was new to us, which was not health-specific, not education-specific, not arts and culture-specific, but that crossed all of our domains and tried to figure out how to advance issues of racial opportunity and equity at a local level.
We sort of divided our grant making into sort of traditional national entities, NAACP, United Negro College Fund, other folks who had a long and storied history attacking racial injustice. But we also began looking in a much more granular way at who on the ground was organizing around issues of racial opportunity or racial impediments to opportunity.
And it surfaced a whole different group of people. It was really interesting. A lot of younger organizations, a lot of organizations that didn’t have 501(c)(3)s, a lot of organizations that were considered deeply threatening to City Hall in Memphis or New Orleans. And it became important to us to try to see what would happen if we could move capital… and into those organizations.
In a lot of cases, relatively small amounts of capital made a huge difference. So in Memphis, for example, we underwrote an emerging organization of some 50 different community-based organizations, all of whom were working on racial justice in one way or another, having no idea whether that structure would hold, whether it would be effective, whether it would end up driving the mayor crazy.
And it did much, much more effective work than perhaps we might have even thought. And so we’ve maintained that portfolio. So that was what, 2020? And so, over the last four or five years, it’s become an integral part of our grant making portfolio.
We’ve tried to make sure that it doesn’t sort of sit completely apart from our substantive programs, that if you’re doing health work, you need to focus on racial equity. If you’re doing higher education work, you need to focus on racial equity. So there’s both a cross walking and a slight segregation of the funds.
“Community building, community organizing, human services support, block-to-block community engagement strategies– these are the kinds of things that create a sort of a social cohesion and a social capital in a place. And that really doesn’t work well if you’re in and out. That requires long-term, persistent capital.”
Denver: Yeah. Yeah. So many wonderful organizations were discovered during COVID like this that people who just never really met the threshold of criteria of guidelines, but the work that they were doing was remarkable.
And I talked to somebody about it, and they said, “Up until now we had been fearful that one of these was going to go awry, and it was going to damage our reputation.” And I guess that’s always a chance. But what she said is that we looked at it like an investment portfolio. And if you do 10 stocks, and one of them turns out to be Google, what difference does it make how the other nine do?
In other words, we can take one little misstep because the upside of some of these is just going to be so phenomenal that we have to be able to have the appetite to do that. And I thought that was a good metaphor.
Rip: Yeah. I think the other aspect of philanthropy that helps with that challenge is its persistence. And there is nothing in the rule book of philanthropy that says you have to make a grant for three years and then leave.
Denver: Yeah.
Rip: And I think increasingly, there is a recognition that sitting right alongside of strategic philanthropy where you’ve got big goals and big aspirations or taking big risks, there’s also sort of dark matter philanthropy. There’s philanthropy that invests in the kind of work that often isn’t even visible in a community.
Community building, community organizing, human services support, block-to-block community engagement strategies– these are the kinds of things that create a sort of a social cohesion and a social capital in a place. And that really doesn’t work well if you’re in and out. That requires long-term, persistent capital.
And so at least at Kresge, I think we’re kind of rethinking for good sections of our portfolio, whether we need to be quite long-term investors, not just short-term turnaround investors.
Denver: Yeah. I know that Kevin Starr of Mulago believes that. He says: If we’re investing in some place and in an organization and it’s doing great, why would we stop? Because three years are up? I mean, what sense does that make? Let’s keep on doing it. And sometimes these things that are laws. But then when you think about them, they really don’t make a lot of common sense in applying that.
Let me ask you about arts and culture because I know how close that is to your heart. And remember looking at Detroit and how that was sort of a nice little marginal add-on, and you were like, “No, no, no, no, no. This is at the heart of what we do.” Speak to that.
Rip: But when I arrived in 2006 in Detroit, there was this incredible legacy of music and dance and every form of artistic expression you can imagine. And yet there was no systematized giving to the arts.
I think the automobile industry in Detroit had traditionally invested in the big major anchor institutions– the orchestra and the art museum and others. And there was maybe some money that sort of trickled down, but the broader arts ecology of small startups, individual artists, there was just almost no support for.
And so we at Kresge devised something called Kresge Arts in Detroit, where we did three things. We said, Well, let’s create an operating support program for all arts organizations– the bigs, the middles, and the littles. We’ll do that, and that’ll be almost formulaic. And we’ll just do that every year and send them their operating support grant and the power to them.
Second piece is: Why don’t we elevate what we know to be the sort of cherished heritage of artistic excellence by each year naming an eminent artist who represents her field. So it could be a harpist, it could be a painter, it could be an impresario of theater, it could be any number of things.
And we’ve now had 15 of those. And although the individual artists themselves are tremendously important, what has become even more, I think, significant about that program is the elevation of the different art forms– fabric art, jazz, performing arts, whatever it might be.
And the third piece was to create an artist fellowship program that actually directs $25,000… now we’ve actually raised that amount to $25,000 a year for many years… to individual artists to just simply let them create their art. We didn’t ask them to produce anything in particular, but we basically said: This is money that you can have available to you so that you don’t have to wait tables for a year and you can actually concentrate on your art.
And we did between 20 and 30 of those a year and have done that again for 15 years. I mention all of that because we’ve been joined by other foundations. We’ve actually been joined by the mayor’s office. We’ve been joined by a number of different sources to sort of build out that ecology.
And it really has become an ecology. It’s, again, from the bigs to the individuals and everything in between. And I think, Denver, you can’t fully comprehend the road Detroit has traveled without understanding just how powerful, just how catalytic that arts community has been.
They’re the folks who are going to take the risks in the neighborhood. They’re the folks who are going to do the physical mural creation that gets young people involved in a community. They’re going to be the folks who raise inconvenient truths and tough truths to us during COVID or during a racial justice reckoning after George Floyd.
I mean, it’s just in every dimension of Detroit society. this artistic community and cultural community has been sort of the standard bearers for some of the most innovative, powerful community redevelopment, community reimagination, racial reparative work that we’ve done.
Denver: They are what makes a place special and distinctive. No question.
Rip: I think so. Yeah.
“…you can’t create organizational culture just out of new structures, just out of new processes; and you certainly can’t even create it out of new strategies. What you have to do is figure out: What are the kinds of normative behaviors that hold a place together?”
Denver: Taking that complex work that you do, Rip, how do you cultivate an organizational culture that embraces innovation and continuous learning and adaptability within Kresge?
Rip: Hmm. It’s funny, I was just looking at a drawing I did within a couple years after I arrived, because I kept getting questions from new employees and people outside the organization of: How in the world did you kind of recreate a vision, move it away from Capital Challenge into this more forward- leaning suite of activities? And how did you sort of create your program strategies out of that?
And I said, Well, that’s an interesting question. I’m happy to talk to you about that. But in some ways, that’s the easiest part, right? Because once you sort of reset your North Star, and once you get a framework in place to understand that your health team is going to take aim at certain things, and your community development team is going to take aim at certain things, then the hard work really begins, right? Because then you have to retool your shop floor.
If you’re going to work differently, you have to have internal processes and procedures. You have to have different structures. All of a sudden you have to decide: Is your communications group sort of a service bureau, or is it integrated into your programmatic work? Is your social investments practice just there to create nifty new tools of capital distribution? Or is it to advance somehow your programmatic work?
And what that adds up to, these new processes, these new structures, is the need to really attend to the culture of the place. How do people see themselves in your place? Do you have values that people attach to readily and live out in their day-to-day operation? Do you have norms of behavior that reinforce what you want to do?
And what we found is that it’s way less mechanical than we thought. That you can’t create organizational culture just out of new structures, just out of new processes; and you certainly can’t even create it out of new strategies. What you have to do is figure out: What are the kinds of normative behaviors that hold a place together?
Years ago, one of our longest standing employees came up to me and said, “You know, Rip, I’ve been here at Kresge before you came and the 10 years since you’ve been here, and for the first time, I can actually see myself as part of this culture.” She’s an African American woman.
And she said it just never felt as if this was really my organization. And for me, that’s become sort of the standard, the metric which we use. Can every individual in this organization see Kresge as their organization, at least in significant part? So all of a sudden that requires values of respect, mutuality, risk taking, tolerance, opportunity to rise within the organization.
There are a series of values that every foundation has, but I think it really comes down to whether individual members of this organization feel safe, feel comfortable, feel as if they can grow into their full potential. And that’s so cliched, but it’s really hard, and COVID made it 10 times harder.
Because I actually believe that so much of this comes with face-to-face human interaction. Maybe not all of it, but I think a lot of it just has to do with the hallway conversations and the serendipity of a meeting you didn’t expect, or a kindness that came your way in a way that you never planned for. I do think that we’re getting back to sort of that normative quality that we had before COVID, but it’s taken a while.
“ A place like Kresge needs to be what it purports to be. There can’t be agendas under the table. We can’t be competing with one another. We can’t be undercutting one another.“
Denver: Yeah, it sure has. And I love what you say about every member, because often I see a lot of leaders that say, Yeah, most people– 80% or 90%. No, really, you’re looking at 100% because that number is going to deteriorate unless you are looking at that one person who is on the outside looking in, and you really need to focus on that because that’s sort of like the canary in the coal mine. You really have to address every single one of your people.
Rip: Well, I think these places need to be these places. A place like Kresge needs to be what it purports to be. There can’t be agendas under the table. We can’t be competing with one another. We can’t be undercutting one another. And we have had, over the course of my almost 20 years now, we’ve had examples of folks who just didn’t fit that mold. They needed to go somewhere else.
And I do say to our newest employees: What you see is what you get. There is really a surface level quality of generosity of spirit, of mutuality, of support. And ultimately, forgive me for being so corny, Denver, it’s ultimately kindness… just being kind.
Denver: Being kind.
Rip: Because I think coming out of kindness comes our respect for people’s difference, a celebration of people’s different talents, of different backgrounds, of different aspirations. And if you can accomplish that, then you’ve, I think, laid the foundation for people to want to stay or at least until something better comes along.
Denver: No, no. I mean, kindness is really at the heart of it because if you have… you know, there’s always been this theory that what you want to do is you want to hire people who are smart and who are kind. And the worst person you can hire is someone who’s smart and unkind. And because that is a dangerous combination.
But when one person’s not kind and is territorial and is trying to get all the resources, you can turn everybody else into that too, because they have to do that to protect themselves. So this sense of just kind… and caring more about the organization at large, as opposed to their department, really changes the dynamic of a place.
Rip: Well, it’s so interesting because in some ways, this is an unnatural act for philanthropy, isn’t it? You’ve got a, just hypothetical, you’ve got a head of a program who just knows everything there is to know about that discipline, and she’s a superstar nationally, and she’s delivering for you locally, and she’s a bully and a micromanager.
Denver: Yep.
Rip: And doesn’t much care about the development of her team. I know so many instances, including within our own organization, unfortunately, where that became a hard choice, or at least it seemed like a hard choice.
Denver: It did.
Rip: Oh, we’ve got such excellence going on. This is what we’re known for. Why would we ever not have that person lead us into the future? Until you realize that it’s corrosive. And that all of that excellence, as you say, is temporal. It just… at some point it collapses, at some point people leave; at some point it becomes unkind and dysfunctional, and then it becomes like a train rolling down a hill. There’s nothing you can do about it, so…
Denver: Nothing you can do about it.
Rip: …I couldn’t agree more.
Denver: Yeah. Yeah. No superstars. Team members, that’s what you really need.
We talked a little bit about your drawings, and I’ve always been fascinated by your drawings and intrigued by them as well. Tell us a little bit how you got started with that and how they help you conceptualize and communicate complex ideas.
Rip: Well, you’re going to be sorry you asked that question. So many years ago, I was working at the University of Minnesota, and I got a call from a guy named Ralph Smith, who was the Vice President of Casey Foundation. Ralph said: You’ve done all of this work in the mayor’s office on child policy, family policy. We’re having 50 people from across the country come, the most profound experts on family policy anywhere. Could you come and just sort of help me run the meeting and make sense of it? So I said, sure, sure. So I go, and it was just a train wreck. I mean, you had all of these folks who were so, I mean, it’s a little bit what we’re talking about.
So smart and so accomplished and so loved hearing themselves talk that about three hours into the meeting, I started taking notes with people repeating themselves or walking around the issue, and we couldn’t create a thread through any of this. And so I started drawing on my piece of paper. And about halfway through, Ralph turns to me. He said, What’s that?
And I said, Well, this is the best I can do to make sense of this very interesting but impossible conversation. So he looked up and to the 40 people he said, All right, we’re going to take a break. So everyone says, Oh, fine, fine then, take a break. He goes and copies this goofy drawing… and just arrows and boxes and balloons and whatever it was.
And comes back and passes it out and tells the group that this is going to be what they work from. Oh, it was like I had assassinated the Pope. They were so annoyed that this simple little drawing, this distillation of a conversation would do full justice to the complexity of what they had been talking about.
So to make a really long story short, I ended up doing a whole suite of those kinds of drawings for Casey as they were re-imagining their strategy. They were working in 25 cities. They wanted to work in fewer; they wanted to elevate the role of kids and families. So I did drawings for their website. I did drawings for their board, I did drawing… and they got a little bit less crude, a little bit more sophisticated.
But what it told me was that we often deal with such difficult levels of complexity. Sometimes you need to put it on an 8 1/2 x 11 piece of paper, and/or in my case, an 11 x 17… I need a little bit more room to work with. And they ended up becoming almost like Rorschach tests. You could sort of see on the paper what you wanted to see. You could see what you thought should be there that wasn’t there.
And it became a shorthand in a way that a PowerPoint wasn’t, or a 15- minute statement wouldn’t do. And so over the years, what I found is that both in our programmatic work and in our internal redesign of Kresge’s processes, having that sort of visualization where it was my best attempt to sort of create simplicity out of complexity, actually helped jumpstart conversations.
There is almost never a document that you would make a policy out of… or I don’t know what else you might do, but they almost always are useful conversation starters and conversation framers. And so what I found is that when I am in the middle of a complicated conversation and I can’t make heads or tails of it, I draw.
Denver: Well, there you… good.
Rip: Yeah.
Denver: Well, I’m glad to see that you haven’t started drawing during this conversation.
Rip: Not yet.
Denver: Not yet. We’re close. No, they’re propellants. They really get… and it disciplines you to put down what you can fit on that piece of paper and leave other stuff out, which is essentially what we’re trying to do, focus on what’s important.
Rip: Well, one time, the value of this became clear when, as we were talking previously, when the Obama administration couldn’t make any sense of what was going on in Detroit. And I sat and created this drawing with these nine buckets of work and the relationship among them, and who was going to take which piece.
And it was still a complex drawing, but we called it Re-Imagining Detroit. And when Shaun Donovan, the secretary of HUD, and Melody Barnes, the head of the Domestic Policy Council, came in the middle of our craziness to try to figure out how they might help, we passed out this drawing, and we organized the table around the drawing.
We had two representatives from each of these modules, and so I didn’t think much of it. Shaun Donovan took the paper, thanked me and left. I didn’t hear anything. Two years later, we took our board to Washington for a quarterly board meeting. Secretary Donovan agreed to come and talk to us, and at the very end of his talk about Detroit and what the administration was doing, he reaches into his briefcase and pulls out this drawing.
Denver: Wow.
Rip: And he says,” So Rip, you’re going to be embarrassed by this.” But he turned to our board chair and said, “You need to know that this was the subject of a cabinet meeting, that this Re-imagining Detroit drawing actually was…. The President wasn’t there, but every other cabinet member was there, and we all went through how we were landing our work in Detroit according to that drawing.”
Denver: Wow.
Rip: He said…I’m sorry, I don’t mean to tell this in a sort of a self-elevating way. It was just… he said, “What that told me is that I couldn’t have done that with a PowerPoint. I couldn’t have done that with a more formal document. I needed something that was sort of loose, a little bit childish so that people weren’t passing judgment on the verbs I used or the structure of my paragraphs. They really needed just a conversation starter.”
So I think sometimes these conceptualizations can be helpful.
Denver: Yeah. Well, I mean, I think there’s a lot of innovation. I always tell organizations that one thing you need is a children’s room because that’s where the innovation is. And I looked at these drawings and I say, That’s the children’s room, you know?
Rip: Yeah, yeah, yeah.
Denver: But that’s where the innovation is, and we need that sometimes.
Rip: That’s interesting.
Denver: I want to ask you, what was your proudest moment at Kresge? But I think you’ve already answered it… when that drawing came out, that had to be right near the top.
Rip: To turn that just to 30 degrees, Denver, Lee Bollinger, who was on our board for a long time, president of Columbia, every year would say, “Rip, you’ve got to have a list of the 10 most important things that you’ve done at Kresge, and that list obviously can change over time.” And he said, “So what would be number one?” And I knew he was going to say, helping sort of get Detroit back on its feet and on a different trajectory into the future.
And I said, “I think the proudest thing I have done at Kresge is to help create a philanthropic machinery that is capable of responding to such diverse circumstances.” Think about pre-bankruptcy. Think about bankruptcy. Think about post-bankruptcy. Think about COVID. Think about federal dollar flows. Think about working in other cities than Detroit.
The ability of a philanthropic enterprise to adapt, to not become so rigid, to not sort of be tethered to a five-year plan that’s unalterable and sacrosanct, trying to figure out what is it about a place– its organizational culture, it’s ways of working, its broadly aspirational objectives– What is it about all of those things that permit it to rise to the moment and to then stay with the moment, and to also understand when the moment has changed?
Denver: Yeah.
Rip: For me, that is the most signal accomplishment of the time I’ve been here. Lee didn’t like that answer. It was too complicated. It was too wonky.
Denver: Got to put it on a drawing.
Rip: Yeah.
Denver: No, good answer. I know in a term they use in India, as I’m sure you know it as well, it’s called doing the “needful.”
Rip: Oh.
Denver: And I’ve always loved that because essentially, that’s what you do. You don’t have this prescription. You take a look around, and you have an organization that can do the needful… doing the needful in terms of what needs to be done now. And then, what are our strengths and how can we alter those strengths and reposition them to do what our community and what our society needs at this very moment?
Rip: Well, and understanding too I think, that the needful is this really interesting combination of the immediate and the long term.
Denver: Right.
Rip: That there are things that are needful over the longer stretch. And philanthropy has this uniquely privileged position of being able to take a longer view and sight against a much more distant horizon line than the private sector or public sector.
And so balancing that with the immediate needful, in COVID, you know, get money into the public health system. Get money into small business stabilization. But at the same time, try to create a machinery so that over time when we all emerge from this, there is an ongoing ability to support both public health and small business development.
Denver: Even that balance. Let’s turn back to the centennial. What are some of the initiatives and events you have planned to commemorate this milestone and reflect on Kresge Foundation’s achievements?
Rip: It’s so tempting, Denver, to say: We’re 100 years old; therefore we’re going to make a hundred-million-dollar commitment to x. And we’ve decided not to go that route. We’ve decided to do two or three things. One is that it’s just this incredible opportunity to take stock of what has been important, interesting, compelling over the last 100 years. And our phenomenal communications group is putting together sort of a hundred points of light. What are a hundred things that Kresge and its grantees have done over the course of this century that are worth noting? So that backward look is one thing. Then we’ll gather on June 11th and sort of celebrate the day of the founding of the organization. And so there’s a little bit of a party element that we’ll all get together at the Detroit Institute of Art and celebrate with 500 of our closest friends.
But then there is the forward-look piece. And there, what we’ve tried to do is to say: What can we take from where we’ve traveled, both over the course of 100 years in the course of the last three years or the last 10 years, and push it forward into what that might mean for American cities in the next while, whether the next while is next year or next five years, or next 20 years?
And so we have a series of convenings, starting with one in June, about: What do we believe we’ve learned from our experience in Detroit? And then we’re going to invite folks from across the country to react to that, to reflect on it. What does that… does that have any bearing on Fresno or Memphis or New Orleans or somewhere else?
And then we’ll structure another series of convenings around issues that seem to be emergent. The role of more equitable public infrastructure in this era of the big infrastructure monies coming from the Feds, the intersection of climate and community development, the changing role of public health in a post-COVID world. I mean, all of these sorts of issues that are framing slightly differently as we look forward.
And then we’ll get back together in September and do another gathering, and try to put those ideas in play to try to see what it might be that philanthropy, the academic sector, the public sector…We’ll have representatives of all of these– the intermediating institutions like the Urban Institute or Brookings or Aspen. What is it that we believe holds true for the future of American cities? And what might our respective opportunities be? What might our respective roles be?
The nice thing I think about that is that you can look back, you can celebrate, and you can look forward. But it means that on December 31st of 2024, you’re not done; you’ve just sort of continued your work. And what was important to us is that our centennial be completely consistent with mission.
We weren’t going to do some one-off grant, or we weren’t going to do something that just never occurred to us until 2024. We were going to try to make the kinds of investments and engage in the kinds of activities that were really consistent with our strategic arc. And I think the way we’ve set it up will accomplish that.
“When you’re focused on building opportunity structures in American cities, you really do have to take your bearings from issues of racial opportunity and racial inequity and racial injustice. And so part of the animating principle is to try to dismantle the impediments to opportunity and replace them with pathways to opportunities.”
Denver: Yeah. Yeah. Be true to who you are.
And in closing, Rip, what philosophical belief or core principle do you hope will continue to guide Kresge’s efforts to create opportunity and advance social good in this next century?
Rip: When you’re focused on building opportunity structures in American cities, you really do have to take your bearings from issues of racial opportunity and racial inequity and racial injustice. And so part of the animating principle is to try to dismantle the impediments to opportunity and replace them with pathways to opportunities. So front and center, racial equity and opportunity and justice.
But second is, I think, the continuing challenge of both in our own organization, and externally, making the case that philanthropy has a vital role to play in the long-term health and vitality of cities. I think we just default so often to a traditional command-and-control structure where the public sector is in charge; they have the election certificate; markets kind of work on their own, and we just have to kind of get out of the way.
I’m increasingly convinced that there is a relationship that philanthropy has to play with private markets, with the public sector, and as well with civic society generally to become an integral player in how cities work, how they create opportunity structures, what their long-term health and vitality looks like.
I just am increasingly convinced that we have, in philanthropy, whether that’s privately endowed philanthropy, or family philanthropy, or corporate philanthropy, this huge force to help shape the daily patterns of a healthful, vibrant community life in American cities.
Denver: Yeah. No, that is so well stated. I mean, we still have the residue of this poverty mentality of charity with the tin cup. And we’ll never reach our potential until we have the self-confidence that we should have to achieve great, great heights.
Tell us about your website, and especially the feature: Kresge at 100, A Century of Impact.
Rip: Our website is, ww, whatever, however many W’s there are, dot kresge.org. (www.kresge.org) And there is, thank you for the mention, there is a really wonderful sort of subsite about the centennial. It’s populated with stories and grantees and graphics and film. And our communications team has just done a stellar job in building out something that’s not only important, but really fun. I mean, I go on there regularly to find out things that I should have known but didn’t.
Denver: Or knew and forgot. Whatever it is, it’s all new the first time around. I’ve been to it a number of times. It is fabulous and so well done.
Rip: Oh, thank you.
Denver: I want to thank you so much for being here today, Rip. It is always such a delight to talk to you, and thanks for making the time.
Rip: Oh, you’re very kind to do it. Thank you, Denver.
Denver Frederick, Host of The Business of Giving serves as a Trusted Advisor and Executive Coach to Nonprofit Leaders. His Book, The Business of Giving: New Best Practices for Nonprofit and Philanthropic Leaders in an Uncertain World, is available now on Amazon and Barnes & Noble.