Challenge Grant

Frequently Asked Questions

Submission/readiness

When does Kresge accept applications?

We accept applications on a rolling basis. There are no deadlines.

Am I ready to submit my letter of intent?

Seven key readiness indicators will help determine if your organization is ready to submit a letter of intent:

You are able to make a strong case for why your organization and your proposed project fit within Kresge’s fields of interest and advance Kresge’s values. We ask that you make this case in a five page letter of intent that addresses the following bullet points:

Provide an overview of your community and the role your nonprofit organization plays in it.

Explain how your organization and the project you are proposing fits within the relevant Kresge fields of interest and explain with specific examples how your organization and project are advancing Kresge’s values.

How does your project support your organization’s mission?

Tell us about your fundraising campaign, including an overview of your campaign plan and how the campaign plan supports the long-term financial sustainability of your organization.

Your project-cost estimates are firm and the construction timetables have been established.
Your site control is finalized and all regulatory issues are imminent.
Your campaign plan is in place and includes both a clear end date and an established challenge strategy.
Your board is beginning to demonstrate its financial support for the campaign.
You have begun to raise private gifts for your campaign, including some private lead gifts. (Typically, we suggest at least 20% and sometimes as much as 50% of your private fundraising goal be raised before applying. If your private fundraising goal is quite large, then having more than 50% raised may be more appropriate. In every instance, however, letters of intent are evaluated first based on how well you advance the values that apply to your project or program and second, the status of your capital campaign.)
If your plan includes any of the following sources of funds, they should be committed, imminent or backstopped: long-term financing, government funds (if a substantial amount), organizational funds, or bequests. (See the resources box on the Challenge Grant page for a glossary of terms.)

If we were previously awarded a Kresge challenge grant, when may we submit a proposal for another project?

If you received a Kresge grant, you must wait two years from payment of that grant before submitting another proposal.

If our project’s letter of intent is declined, may we resubmit it?

No. If we decline your letter of intent, you may not resubmit it at a later date. After careful consideration, we will have concluded that your project is not an appropriate fit for the Challenge Grant. The decision is final.

If my letter of intent is deemed favorable and I am asked to submit a full challenge grant proposal, what will this entail?

We ask that you provide a typed, double-spaced document that does not exceed 20 pages. Read the full proposal outline (PDF).

What are the requirements or conditions of a Kresge challenge grant?

You must meet the following four conditions to receive an awarded challenge grant:

Raise the balance of funds required to complete the funding of your campaign goal by your challenge deadline and according to the plan outlined in your proposal.
Sign the project contract(s).
Confirm that contracted costs are within available resources.
Maintain IRS tax status as a charitable organization or government agency.

If a grant is approved, what information is required during the challenge period and at time of payment to confirm that the grant conditions have been met?

We will ask you to sign a grant agreement, which we will provide at the time your grant is approved. This agreement confirms our mutual understanding of the requirements of our grant. We also will ask you to provide periodic updates on your campaign progress and project during the challenge period and submit a report that you have achieved your campaign goal within the challenge deadline. Last, after a Kresge grant is paid, we will ask you to submit a final report on the use of the foundation’s funds.

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Grant size questions

How large are The Kresge Foundation’s challenge grants?

Typically, Kresge challenge grants range from $100,000 to $2.5 million.

How much should we request from the foundation?

We recommend you request a grant that is approximately 8 to 10 percent of the private goal you have set for your campaign, and within the overall size range of our challenge grants – $100,000 to $2.5 million. Organizations submitting a letter of intent should not automatically expect to receive grants at the high end of our grantmaking scale.

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Project questions

We have to designate a “primary project” for our application. Can we include other projects and goals in the total campaign that we present to Kresge?

Yes. There is room on the fact sheet to list other campaign objectives. We do, however, ask you to identify a primary project so that we can assess the values you are advancing in terms of the primary project. We also need to know which project is primary in order to understand the timing issues associated with the construction of the facility.

We have multiple facilities projects in our campaign. How should we decide which one to consider the “primary project”?

The “primary project” should be one or more facilities within your larger plan that best address both the Kresge values outlined and timing issues. You may combine multiple facilities for this purpose, but all those selected should meet both sets of criteria.

How do you define integrated equipment systems or technology systems?

Systems that are valued at $500,000 or more that are associated with the operation of your organization.

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Gift questions

What funds count before a Kresge challenge grant is awarded?

The following may count as initial funds:

Written pledges or cash from individuals, corporations, businesses, and foundations, including those resulting from direct appeals and unsolicited gifts (All pledges must be paid within five years from your fundraising end date.)
Organizational funds
Long-term financing
In-kind materials and services, including donated property (You may count gifts of land not involved in the project only when the land is sold or under purchase agreement.)
Cash surrender value of life insurance policies that your organization owns and is the beneficiary
Present value of formal deferred gifts (For a charitable lead trust, you may count the income from your campaign start date to five years from your fundraising end date.)
Matured bequests that are paid or in probate
Government grants

What funds count after a Kresge grant is awarded?

Only the following funds may count toward your challenge goal:

Written pledges or cash from individuals, corporations, businesses and foundations (All pledges must be paid within five years from your fundraising end date.)
In-kind materials and services, including donated property (You may count gifts of land not involved in the project only when the land is sold or under purchase agreement.)
Cash surrender value of life insurance policies that your organization owns and is the beneficiary
Present value of formal deferred gifts (For a charitable lead trust, you may count the income from your campaign start date to five years from your fundraising end date.)
Government grants that are part of your campaign plan and do not represent a substantial portion of the challenge goal (A request with several pending government grants is not likely to receive a Kresge grant. If possible, we advise you to backstop the expected government funding.)

Can long-term financing be part of the funding plan for the project and campaign goal?

Yes. Long-term financing may count as funds available toward your goal. Kresge defines long-term financing as debt principal extending five years or more beyond your fundraising end date.

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Grant particulars

May endowment goals and program support be incorporated into the campaign goal?

Yes. You may combine endowment goals and program support with eligible project costs. The dollars raised in response to a Kresge challenge grant may be applied toward these needs, but Kresge grant funds must be allocated toward only the eligible components.

What is backstopping?

Kresge defines backstopping as the formal use of specific alternative resources to cover anticipated government funds, planned gifts or long-term financing. These alternative resources often are organizational monies, which will be replaced once the expected funding is available. The availability of replacement funds for backstopping will be taken into account on a case by case basis and is not an absolute requirement for submitting a letter of intent. (See the glossary of terms for a complete list of definitions.)

When does Kresge cancel a grant?

The foundation’s trustees may decide to cancel a grant if an organization is not able to meet the requirements. After a grant is awarded, substantive changes in either the fundraising plan or the scope of the project without prior notification also may be reason to cancel the grant.

When is a challenge grant paid?

A challenge grant is paid in full within 60 days of meeting your campaign goal and other conditions outlined in your grant agreement.

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What if I have additional questions?

Please e-mail the Grants Inquiry Coordinator or call 248-643-9630.