January 17, 2014

Why Our Foundations Are Investing in Detroit

Paul Sancya/AP Images

This week our four philanthropies joined several others to publicly announce a $330-million commitment to help speed the City of Detroit’s path to revitalization. Chief Judge Gerald Rosen, who chairs a committee mediating the city’s bankruptcy proceedings, worked with us to shape a plan that would help Detroit honor its commitment to retired government workers while protecting the remarkable collection of the Detroit Institute of Arts.

As we considered our support for this effort, we asked ourselves many questions. Is this the best use of philanthropic dollars? Is this the right time for such an investment? What kind of precedent does this set, especially considering the economic difficulties many American cities face?

All of these questions are tough, and we know that our colleagues across the diverse nonprofit landscape might well answer them in different ways. In that spirit, we wanted to share more about the context that shaped our thinking.

All of the philanthropies participating in this plan have longstanding ties to Detroit. We are all active grant makers, focused on revitalizing the city, and our programs speak to the key tenets of this deal—arts, economic opportunity, and urban revitalization. And we are all deeply committed to getting Detroit out from under the cloud of bankruptcy so energy and resources can be better used to move the city forward.

So when Judge Rosen came to us with a practical opportunity to help streamline and strengthen the city’s recovery process, we were all ears. Judge Rosen set the fundraising goal and defined the initial terms—a proposal we found to be a thoughtful, forward-looking and innovative approach to making progress on two key matters at the center of Detroit’s complex web of issues. It is structured to encourage participation by a broad and diverse group of contributors, with the funds we have pledged serving as a platform to attract further funding and investment.

Though we approach Detroit from different perspectives, we are united in the belief that safeguarding the pensions of retired city employees and protecting Detroit’s extraordinary art collection are vital to the city’s prosperity.

Tens of thousands of Detroit’s public servants face deep cuts to their retirements and livelihoods. Shoring up the pension funds helps these families, strengthens the local economy and relieves some of the pressure on the city’s operating budget. Similarly, the proposal would safeguard the DIA, a treasured cultural beacon that for decades has helped strengthen the Detroit metropolitan area, attracted residents and visitors alike, and added to Detroiters’ sense of identity and connection to the city

But our support also aims to accomplish something even larger: helping a great city get back on its feet quickly and on course toward a better future.

This new investment, above and beyond our existing grant making in the region, represents our desire to seize a rare opportunity and play a constructive role in the revitalization of Detroit.

We see a one-of-a-kind chance to make an investment that is true to all of our values and our giving priorities and that embodies the kind of flexible, creative, and transformative philanthropy we believe in.

At its best, we hope our involvement may bolster the spirit of positive engagement and creativity in Detroit, catalyzing others to invest strategically across the region.

It does not mark the start of philanthropy as a solution to public insolvency. This is a unique, clear-eyed move to push forward positive negotiations, with our philanthropic dollars being exclusively pegged for two roles: safeguarding the DIA and protecting pensions.

We know that some will ask what this means for foundations around the country and whether we advocate aggressive intervention and high-dollar “emergency” grant making to fill gaps in our communities. So let us be clear: We do not think philanthropy can be a replacement for social capital or that any foundation has the resources or wisdom to successfully play the role of civic savior.

Rather, we encourage others to ask the hard questions that we asked ourselves when Judge Rosen came to us with this compelling proposal: Does this fit our mission? Does this advance our current grant making? And does this reflect a wise investment of dollars and energy in Detroit?

For the nine foundations that have committed so far to this proposal, the answer to those questions is yes.

This week’s announcement is the start of a process in Detroit, not an end, and a continuation of our engagement in the region. We are optimistic that this investment is wise and will help advance a better future for this resilient city.

The authors all lead foundations: Alberto Ibargüen, Knight Foundation; Mariam Noland, Community Foundation for Southeast Michigan; Rip Rapson, Kresge Foundation; Darren Walker, Ford Foundation.