Kresge, Rockefeller's Request for LOIs for Opportunity Funds
In June 2018, The Kresge Foundation and The Rockefeller Foundation announced a request for letters of inquiry (LOIs) for fund managers establishing new Opportunity Funds. LOIs were accepted from June 11th to July 16th.
Phase 1: Gathering Letters of Interest
The foundations hoped to partner with mission-aligned fund managers who intended to make investments that will benefit the lives and communities of people with low incomes, deliver promised returns to investors, and evaluate the impact of investments over time. The foundations made no formal financial commitment at the time of the request for LOIs.
The foundations evaluated submissions based on the following criteria:
Investments designed to benefit low-income people and communities.
Investment proposals that align with the Foundations’ respective areas of programmatic interest.
Fund-manager experience and readiness (i.e., experienced fund managers who propose investment strategies that align with the foundations’ programmatic goals, work in or have experience with target key cities, and incorporate measurement, evaluation and equity into their work)
The Request for LOIs stated that the foundations were prepared to commit an unspecified amount of grant dollars. Kresge Foundation also soft-circled unfunded guarantees of up to $25 million related to supporting OZ funds or projects. On July 10, 2018, the Kresge and Rockefeller foundations hosted a webinar to provide an overview and answer questions about their joint request for Letters of Inquiry (LOIs) related to Opportunity Zones. The webinar recording can be accessed here.
Phase 2: Selection of First Cohort
As of October 1, 2018, the foundations received 141 responses to the LOI and are moving 20 forward for further review. The foundations are designing a package of technical assistance that will allow selected organizations to receive advisory services on legal, accounting, reporting and capital raising issues relating to their proposed OZ Fund. In the first cohort, Kresge identified 5 organizations to receive that package, which includes unfunded guarantees, and more may be added in the future. The foundations will also work with 15 additional applicants to further explore their social objectives and OZ capital raising strategies related.
Rip Rapson, CEO of The Kresge Foundation recently wrote a blog, published in Impact Alpha, on what Kresge has learned about OZs as a result of this undertaking. Read the full post here.