By just about any measure, life in Detroit has improved since the Great Recession. The city’s economy grew nearly 20 percent in the five years after the recession ended, and the rate of job creation over the past year has outpaced the national average.
Amy Liu of the Metropolitan Policy Program at the Brookings Institution credits philanthropy with creating a “stimulus package” that helped spur development and paved the way for massive federal support of the city and auto industry.
Foundation involvement in Detroit differed from other large-scale revitalization efforts, such as in post-Katrina New Orleans. Grant makers in the Motor City were not afraid to pick what neighborhoods to invest in — a bold but politically controversial stand, according to Ms. Liu.
“If you’re going to create market momentum, you have to target — you can’t spread the money around like peanut butter,” says Ms. Liu, who also directs Brooking’s Global Cities Initiative, a joint project with JPMorgan Chase. The financial-services giant has committed $100 million to community-development grants and loans in Detroit.
Critics of philanthropy’s role in the city’s revival argue the opposite. Peter Hammer, a law professor at Wayne State University, says the focus on only a few areas created a “fortress mentality.” While foundations were supporting projects and development aimed at attracting newcomers, he says, longtime residents in predominately black neighborhoods saw basic services like water cut off.
“This should be bringing people out on the streets,” Mr. Hammer says. “It should be a cause for rebellion.”
Democracy Dismantled
Jeanette Lee, executive director of Allied Media Projects, says grant makers brought in planners from outside Detroit and ignored local organizations that foundation leaders concluded weren’t up to the job. Those same grant makers, she says, stood by passively while “the mechanisms of democratic participation were being dismantled” during the state’s takeover of city operations.
Allied Media, a nonprofit consultancy that supports arts, media, and technology projects centered on social justice, researched philanthropy’s role with the Detroit People’s Platform, a network of city nonprofits. They found that 84 percent of the money disbursed by the 11 grant makers that spent the most in Detroit went to organizations with annual budgets that exceeded $10 million.
Grant makers say they are getting the message. For example, many recent grants to entrepreneurs made by the New Economy Initiative, a fund supported by 12 foundations, focused on businesses in neighborhoods with large black and Latino populations. Katy Locker, the Knight Foundation’s Detroit program director and a member of the fund’s steering committee, says it has shifted focus to include support for “been ups” — entrepreneurs who have been in the community for years — rather than newly arrived start-ups.
Tonya Allen, president of the Skillman Foundation, defends grant makers’ work. With Detroit facing massive barriers due to a shrinking tax base that impaired City Hall, philanthropy “mastered the workaround,” she says.
Now, however, she believes foundations need to change their approach. Despite progress, the city still offers little hope to many of its poor residents, she says. The time for workarounds is over.
“Our challenge as a philanthropic community is to continuously evolve and respond to the current conditions in Detroit,” Ms. Allen says. “Are we making progress? Yes, but there’s still much work to do.”
