Looking for a specific grant?
Page Tools
Foundations work together, separately to help Michigan and its communities
By ANN RICHARDS
For much of the 20th century, the steady expansion of Michigan’s economy, led by automotive manufacturing, resulted in the growth of the middle class as well as substantial individual fortunes.
And many of those who prospered in that period left a portion of their wealth to charitable foundations. In quick succession, from 1924 through 1936, the Kresge, Mott, Kellogg and Ford foundations were created, along with the first Michigan community foundations in Grand Rapids and Kalamazoo.
Today, Michigan is home to 2,251 independent, community, corporate and operating foundations, and that number continues to grow. Their assets totaled $24.2 billion in 2006, the sixth largest in the U.S., according to the Michigan Foundation Directory. More than 94 percent of those assets belonged to 226 foundations, which also accounted for nearly 88 percent of the total giving.
These philanthropic resources represent significant assets to a state that is struggling to reinvent itself economically and set a course for sustained prosperity.
For all their economic power, however, philanthropic dollars represent only a fraction of the state of Michigan’s annual budget. In 2006, that budget totaled more than $38 billion, while all grantmaking by Michigan’s foundations totaled $1.4 billion.
But government alone cannot fund the economic transformation required in Michigan, according to Stephen R. Forrest, vice president of research at the University of Michigan in Ann Arbor.
Fueling economic diversification and growth requires vision, imagination and a willingness to take risks. And this is where philanthropy can play an important role.
The real value of philanthropy dollars lies in their potential for speed and flexibility, experts agree. Those dollars can be tapped more quickly, and used more flexibly, than public resources. Foundation grants provide capital to support fragile ideas, advance experimentation, encourage innovation, import expertise, convene diverse interests, test models, and leverage the efficiency and impact of other investments.
Indeed, foundations can partner locally and/or regionally and can leverage state investments in education, job creation, economic diversification, housing, urban revitalization, environment and land preservation, to name just a few areas.
A history of collaboration
When the state’s economy floundered at the start of this decade, philanthropy already had experience in working collaboratively with each other and with state and local governments.
“In the early 1980s — the last time we went through a severe economic downturn — we realized that tough times can be used to promote new kinds of activities. The circumstances of the day caused us to work together, to benefit from what each other was doing,” said Robert S. Collier, president and CEO of the Council of Michigan Foundations (CMF).
“Strategically, it was an important discovery for us. We came to understand that individual action wasn’t enough — that we needed to act together if we were going to make a difference.
“Today, there’s a renewed understanding that you can’t have a healthy local community if the state around you isn’t healthy.”
CMF was established in 1975 and now is one of the oldest and largest regional associations of grantmakers in the U.S.
In 2003, CMF reinforced its commitment to collaboration by working with the staff of Gov. Jennifer Granholm to establish the Office of Foundation Liaison (OFL). This Cabinet-level position is the first of its kind in the country.
Karen Aldridge-Eason, then director of the Flint Area grantmaking program for the Mott Foundation, was selected as the first liaison and is serving on loan from Mott.
“Having someone in Lansing who knows the field of philanthropy is extremely valuable,” Collier said.
“We are able to provide a ‘safe place’ for state government officials and Michigan’s philanthropic leaders to talk with one another and figure out how they can work together. We’re bringing people together like never before.”
Marrying the interests of government and philanthropy can be an effective method for change, says David Egner, president and CEO of Detroit’s Hudson-Webber Foundation and chair of the OFL advisory committee.
“Reduced revenue is forcing government to change the way it operates, and philanthropy is in the process of creating new operating models. In Michigan, the timing is right. If we are able to inject some creative new ideas into government, it may encourage more strategic deployment of public dollars.”
CMF’s newest affinity group, Funders Concerned About Michigan’s Economy, established in 2007, provides yet another platform for foundations to work together, according to Diana Sieger, board chair of CMF and president of the Grand Rapids Community Foundation.
“We came together in 2006, because so many of us were concerned about what we should be doing — what we could be doing — to encourage economic growth. Many of us are involved with this kind of activity in our own communities, but with limited resources, we wondered what we might do to leverage our dollars on a larger scale.”
Progress has been slow, says Sieger, because Michigan's economic challenges are structural, and vary from region to region. Still, she believes the affinity group offers a starting point.
"If we've learned anything over the past year, it’s that access to resources doesn't guarantee solutions. We understand change will be incremental, and that we are going to have to act together over the long term in very deliberate ways."
Working together for change
John E. Marshall III, former Kresge Foundation CEO and president, has spoken about the important role that foundations can play in making their communities “a place where people want to live and build a future.”
In order for people to be willing to invest in a community, Marshall said, they need to be assured about the quality of life a region has to offer — from its schools, to its arts and cultural opportunities, to its health-care systems.
Experts agree that foundations alone cannot revitalize communities, but their dollars can leverage additional resources — and encourage partnerships — that can lead the way to significant improvements.
Kresge recently concluded a $50-million challenge grant program to assist the city of Detroit in creating the Riverwalk, tying its match requirements to specific contributions and activities by more than a dozen nonprofit, governmental and private partners.
Kresge, which has pumped $140 million into various Detroit-based initiatives over the past 13 years, is among several foundations working individually and collaboratively to revitalize Michigan’s largest city and its region.
For example, in 2007, the Community Foundation for Southeast Michigan (CFSEM) led a successful effort to raise $100 million to foster economic growth and speed the transition of the seven counties that make up southeast Michigan toward a new, knowledge-based economy.
The New Economy Initiative for Southeast Michigan, as the philanthropic collaborative is known, will make grants and investments that support economic development infrastructure, innovative enterprises and educational programs to prepare adult workers for new types of employment.
The Ford, W.K. Kellogg and Kresge foundations each granted $25 million for the initiative. Additionally, the Hudson-Webber, McGregor, Mott and Skillman foundations each contributed from $1 million to $5 million.
In addition, there is growing consensus that the state needs more strategic investment, more job training and education, and more financial incentives that will revive Michigan’s entrepreneurial heritage.
Michigan’s universities are working with the state’s foundations to jump-start a 21st century culture of entrepreneurship, according to UM’s Forrest.
In line with his belief that a deeper tradition of industrial research and technology transfer between Michigan's institutions of higher education and industry must be encouraged, Forrest is the driving force behind the creation of the Michigan Initiative for Innovation and Entrepreneurship (MIIE).
In collaboration with Michigan State and Wayne State universities, UM is seeking support for the $75-million initiative to launch knowledge-based entrepreneurial businesses and programs. The fund is modeled on the Michigan Universities Commercialization Initiative, which was created by UM, MSU and WSU. All of Michigan's 15 public universities now are members of MIIE.
Using philanthropic dollars to create three strategic funds — a Gap Fund, a Talent Retention Fund and an Entrepreneurial Education Fund — the universities plan to leverage their academic expertise through partnerships with industry and government. They will focus not only on creating new and diversified enterprises, but also on working at the investment and policy levels to promote a cultural and technical environment that sustains entrepreneurship in Michigan’s cities.
Mott has contributed $2 million to support the MIIE.
A network of community foundations
Of the state’s foundations, the vast majority — 1,889 — are independent, private grantmakers. These independent foundations, some of which are categorized as family foundations, derive their assets from the gift of a single individual or family. Additionally, Michigan has numerous community foundations, company-sponsored foundations and corporate giving programs, and operating foundations.
Collectively, these institutions not only represent a significant source of risk capital, but also serve as leaders, partners, neutral conveners, planners and catalysts for change in their individual communities and, increasingly, on regional and statewide bases.
For example, in 2006, Michigan’s 96 community foundations invested more than $97 million in their communities through 8,000 grants. Together, they hold assets of approximately $2 billion.
The community foundations vary widely in asset size and service area. The Community Foundation of Southeastern Michigan, which serves the heavily populated counties surrounding Detroit, has assets totaling $609 million. By contrast, the Community Foundation of the Upper Peninsula, which operates in a larger but far more sparsely populated region, has a collective endowment of more than $21 million.
Statewide, the grantmaking expertise of community foundations continues to grow in several important issue areas, including protection and restoration of Great Lakes habitats and water quality, a key to the state’s tourism and fishing industries.
Mott’s investment of $875,000 in the Great Lakes Community Foundation Collaborative — administered by CMF — has leveraged millions in grant support from the Great Lakes Protection Fund, the Joyce Foundation of Chicago and units of governments at all levels, as well as from the 18 shoreline community foundations involved in the multiyear project.
Looking to the future
Michigan’s present economic problems will not be resolved in five years or even 10; it will be a much longer-term process, CMF’s Collier said. Therefore, the philanthropic community must prepare to do its work within an ever-changing demographic and intergenerational context.
For example, Michigan is home to the largest Arab-American population — 58 percent of whom are Christian and 42 percent Muslim — in the U.S.
In metropolitan Detroit, where more than 300,000 citizens of Arab descent reside, the Arab Community Center for Economic & Social Services has created a Collaborative for Arab-American Philanthropy. The center is linking with national networks of other ethnic and racial affinity groups to increase its capacity to raise dollars to support services for the poor, refugees and new immigrants.
Including diverse viewpoints is critical to Michigan’s — and philanthropy’s — future, Collier said.
“The economy has forced more convening and networking, and we are benefiting from that improved understanding of what each other is doing. It’s strategically important for us and for the state. We understand that if we’re going to make a difference, we must act together.”
Accompanying this report are some examples of innovative and experimental projects that are being fund by community, corporate and operating foundations to help transform communities across the state.
Additional Resources
Click the links below to view related stories: