Good Friday afternoon, everyone:

I wanted to pass along the second national media piece about Detroit that’s popped up in the last couple of weeks. This is from the October 23rd edition of Forbes, and draws extensively on an interview the writer, Alison Griffin, did with us. The article explores how traditional ways of measuring impact are changing.

Entitled “A $90 Billion Question: Measuring What Matters In Talent Development,” the article is accompanied by the summary statement: “Three major foundations are abandoning feel-good metrics for hard data on economic transformation, pioneering new ways to measure whether their workforce investments create lasting change.”

It opens with a slightly provocative statement from me:

In 2008, Rip Rapson faced an impossible question. As CEO of the Kresge Foundation, he controlled hundreds of millions in philanthropic dollars. But as the financial crisis decimated Detroit, traditional charity seemed laughably inadequate. "We had 100,000 vacant and abandoned parcels," Rapson recalls. The usual foundation playbook—writing checks and counting recipients—wouldn't resurrect a dying city.

Griffin then argues:

What happened next in Detroit would help spark a revolution in how America's foundations measure success. Today, as nearly $90 billion of philanthropic capital flows annually into education and workforce development, a new generation of philanthropic leaders is abandoning feel-good metrics for hard data on economic transformation. Their contrasting approaches offer a glimpse into philanthropy's future and may determine whether charitable giving can actually solve America's talent crisis.

She notes that increasing numbers of foundations are looking less to count narrow outcomes than to understand how philanthropic activity can help transform systems. She zeroes in on three foundations:

[1] A Precision Model: GitLab Foundation brings Silicon Valley rigor to social investment. . . . The foundation doesn't just demand metrics; it invests in building grantees' analytical capabilities. Through their AI for Economic Opportunity Fund, they've evaluated nearly 800 proposals and identified what actually works.

[2] A Multifaceted Approach: Gary Community Ventures operates like "a Swiss Army knife, [pulling out] "whatever tool we need to solve the problem that's in front of us." The organization combines grantmaking, impact investing, policy advocacy, and an innovation lab.

[3] A Place-Based Strategy: The Kresge Foundation learned through Detroit's crisis that systemic problems require systemic solutions. "A privately endowed philanthropy like Kresge has a responsibility to focus on issues of equity and opportunity and justice," says Rapson. "Why do you need private philanthropy just to perpetuate the status quo?"

This philosophy drove Kresge to invest in neighborhood-level capacity building, from creating community development financial institutions (CDFIs) where none existed, to supporting hyperlocal initiatives like pocket parks, community gardens, and arts-based revitalization. As Rapson explains, the foundation focused on building "the building blocks of health and vitality and stability in American cities,” investing in everything from fresh food access at Eastern Market to grassroots arts organizations that transform abandoned houses into community theaters.

Griffin goes on to describe at length how Kresge’s methodology has changed since its capital challenge grant years:

Kresge, meanwhile, evolved from counting building campaigns to measuring systemic change. The foundation’s approach crystallized through initiatives such as the Detroit Future City Plan, which engaged over 100,000 Detroiters to create a comprehensive investment framework. This shift from tracking individual grants to measuring citywide transformation became the foundation’s hallmark—asking not just how many projects were funded, but whether entire neighborhoods were becoming more sustainable and prosperous.

Kresge's evolution illustrates how the measurement revolution emerged from real-world failure. Founded by retail magnate Sebastian Kresge in 1924, the foundation initially focused on funding buildings. "Sebastian Kresge felt that buildings became the manifestations of where people were treated for health problems, became educated, met a spouse," Rapson explains.

But when Detroit's decades-long economic decline accelerated during the 2008 financial crisis, leading to the largest municipal bankruptcy in U.S. history in 2013, Rapson recognized the city needed more than infrastructure. "It was a diversified portfolio that identified the city’s building blocks of health and vitality and stability," he reflects. This meant developing new roles for regional philanthropy: de-risking investments to attract private capital, building civic capacity, and sustaining fragile ecosystems during crises.

The results speak for themselves. "There is no way that Detroit recovers, and no way that you can explain Detroit’s recovery, without the vibrancy of its arts and cultural community," says Rapson. When New York artists started flocking to Detroit, prompting The New York Times to ask if Detroit was "the last stop on the L line," it validated Kresge's ecosystem approach.

Griffin observes that the adoption of a more systems-based method of assessing progress doesn’t translate into abandoning the discipline and rigor associated with traditional metrics. Instead, it underscores the need to use yardsticks that seek to understand whether philanthropic activity is contributing to long-term impact.

She concludes: “As these three foundations demonstrate, measuring what matters—whether through precision tracking, ecosystem building, or wealth creation—can transform philanthropy from charity into investment.”

She closes with Kresge:

‘Privately endowed philanthropy has the ability to take a very long integrative view and to stay the course,’ Rapson reflects. ‘That's very hard for political cycles and corporate profit cycles to get comfortable with.’

Kresge's commitment to this approach continues to evolve. In January 2025, the foundation announced a $180 million investment in Detroit neighborhoods, including relocating its headquarters from suburban Troy to the city's North End, putting its institutional presence where its grantmaking has been focused for over a decade. This move from the suburbs to the city exemplifies how seriously philanthropies are taking their role in urban transformation.

Rip

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