Keller helps WK Kellogg Foundation make an impact

October 18, 2010
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With $7.5 billion in combined total assets, the W.K. Kellogg Foundation in Battle Creek ranks as the sixth largest foundation in America.

Grand Rapids businessman Fred P. Keller is in the middle of a two-year stint as the foundation’s chairman.

“I was called up out of the blue and asked if I would meet with some of the foundation trustees about my work at Cascade Engineering. A little while later, I was asked if I would join the foundation board. And that was it,” he said.

“It’s really a rare privilege to be part of an organization whose purpose is to help people.”

The founder, president and CEO of Cascade Engineering, Keller, 66, has crafted a business that makes a social difference as well as a profit. Working with the Kellogg Foundation on making a social impact and, in particular, in adding mission-driven investments to its asset portfolio, has been inspiring for the Grand Rapids native. According to its 2009 annual report, the foundation has committed to investing $100 million over three to five years in “financial institutions and instruments” that help children, families and communities.

“The notion that investments in business can positively impact the community — that’s a reinforcing concept for me,” Keller said, who founded his company after obtaining degrees in engineering and business. His father, Fred M. Keller, also was a local business owner.

Keller joined the foundation board in 2003, shortly before President and CEO Sterling Speirn took the helm. Keller became chairman last year and will remain on the board for several years more.

Since W.K. Kellogg created the foundation in 1930, it has focused on the welfare of children. It funds its grants entirely through the proceeds of the endowment left by Kellogg.

That includes children who live in poverty, are disabled, belong to a racial minority or have some other reason to be at risk, he said. The foundation’s grants fall into the categories of food, health and well-being; education and learning; and the economic stability of families, Keller said.

“Then we have two what we call ‘lenses’ for this work,” Keller said. “One is in the area of racial equity and the other is through the community engagement process. We want to make sure that we’re engaging the community; so, we’re not coming into the community and suggesting that we’ve got the answers, but the community is engaged in driving the answers.”

Since Speirn’s arrival, the foundation has strengthened commitments in three states — Michigan, New Mexico and Mississippi — while retaining its funding priorities across the nation and the world. Some 80 percent of grants are awarded in the U.S., with half of that devoted to the three target states. In Michigan, the foundation has been working in Battle Creek, Detroit and Grand Rapids, in particular.

“You reach into that bank every year and pull out several hundred million dollars and decide where to give it most effectively. It’s a big responsibility and an interesting kind of question to ask: How do you most effectively spend money?” Keller said.

“Most people think, well, that’s easy, just give it away, or just give it to me. But the fact is that to give away money effectively is not easy, and that’s why we, as trustees, are really charged with actively working on the strategies that make that most effective.”

For example, the Kellogg Foundation is a major supporter of First Steps, a Kent County nonprofit organization devoted to improving life for children in their earliest years. This year, the foundation awarded $1.3 million to support Children’s Healthcare Access and Welcome Home Baby.

Keller said he tries to grease the skids for Kellogg staff members in Kent County, but keeps out of the grant-making details.

“The objective for me is to help staff understand the community and not to be directing where I think funds should be going,” he added.

Keller’s personal commitment to racial equality, sustainability and innovation have shaped the growth of Cascade Engineering since he started the company in 1973. But his experience of working with the Kellogg Foundation has been energizing, he said.

“I don’t know that it has necessarily changed me, but it has stimulated me,” he said. “My general thought process in this organization right now is that, as a private organization, not a public one, we get to follow our passion.

“We’ve determined that our purpose as an organization, number one, is to make a positive impact in the world from an environmental and social standpoint. In order to do that, we’ve got to make some money,” Keller said.

“The notion of using your business to make an impact on the world is not something that’s broadly thought of, but working in the foundation world and being a trustee and being able to see how all that works gives me an even greater sense of intensity around that purpose.

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