Criteria for Investment

The W.K. Kellogg Foundation’s mission-driven investments supports children, families, and communities to strengthen and create conditions that propel vulnerable children to success and is closely aligned with the Foundation’s program elements, approaches, and geographic areas of focus.

We invest in existing funds and managers, as well as direct transactions in companies. We do not make investments in enterprises/funds that are at the start-up stage of development. All investments must pass a rigorous due diligence process that evaluates mission and financial returns coupled to level of risk.

MDI’s requirements of a both strong mission fit and market, or near-market financial performance, mean that very few submissions will be good candidates for investment.  As such, and given the time-consuming nature of the investment process, please review the criteria below carefully, to determine if your opportunity is a strong fit across all of the criteria prior to applying.

Specific criteria for investments include:

• Demonstrate potential for successful execution
  • Proven record of success (2-4 years)
  • Fund/enterprise owned and operated by a strong team
  • Established anchor investor
  • Credible plan for execution and scale
    
    
• Advance mission impact
  • Alignment with our core mission strategies of educated kids, healthy kids, and secure families
  • Alignment with our geographic priority interest
  • Ability to leverage the Foundation’s grantmaking
  • Ability to have substantial impact (scale)
  • Ability to advance racial and gender justice and equity (i.e. investments led by and serving minorities and women)
    
    
• Financial targets/metrics
  • Generate market risk adjusted by asset class rates of return
    • Loans and fixed income investments: 6-10% return, a maximum term of five years, strong collateral and cash flow coverage, and fully amortizing instruments with current yield
    • Private equity investments: 15-25% return
  • Range of investment from $500,000 to $5 million
    
    
• Mission and Social targets/metrics includes access to:
  • More and better jobs for family caretakers
  • Mainstream and alternative financial services
  • Quality childcare and educational institutions
  • Healthy foods and/or health services
  • Stable and affordable housing
  • Small business financing