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How Much Do Foundations Really Give to Detroit?

December 03, 2014

Spirit_of_Detroit-2560x1600It is no secret that the once-great city of Detroit has fallen on hard times. In response, philanthropic foundations, while wisely insisting that they can never replace government, have stepped up their levels of giving in the city in an effort to save its key institutions and civic infrastructure from collapse. So it seems perfectly logical to ask, as the Detroit News did recently, "How much are funders giving to Detroit?"

In turns out there are at least three answers to that question, depending on how one interprets "give to Detroit" and how the numbers are crunched. According to the Detroit News, eleven top funders "awarded Detroit $512 million in grants from 2008-2012." That number is based on Foundation Center data and is a solid one, but it only tells part of the story.

To understand why, let's look at one of the eleven funders — the Ford Foundation — mentioned in the Detroit News story. The News reports that the foundation provided $27.8 million in grants to Detroit from 2008-12. That's true, with two important clarifications. First of all, though not made explicit in the story, the News was only interested in grants to organizations located in "Detroit proper," as opposed to the Detroit metropolitan area. The second clarification is that the Ford Foundation number intentionally omitted a series of grants totaling $13.7 million to the Community Foundation for Southeastern Michigan. Large, national foundations like Ford frequently make the equivalent of block grants to community foundations, which have the on-the-ground presence, networks, and expertise to re-grant those funds effectively to community-based organizations. Foundation Center researchers took that $13.7 million out of the Ford totals and counted whatever portion had been re-granted as part of the "grants awarded Detroit" by the Community Foundation of Southeast Michigan. This was to avoid something called "double counting"; still, it would not be inaccurate to say the Ford Foundation provided $41.5 million ($27.8 million + $13.7 million) in grants to organizations in "Detroit proper" from 2008-12.

What if we interpret Detroit to mean the metropolitan area? In the case of Detroit, the federal Office of Management and Budget has defined something called the Detroit-Warren-Livonia Metropolitan Statistical Area (MSA). If we were to look at how much Ford gave to organizations located in the Detroit MSA (aka metro Detroit) from 2008-12, the answer would be $47.9 million (again, including the $13.7 million granted to the Community Foundation of Southeast Michigan).

There is yet a third way to answer this question that provides additional insight into the way many larger foundations work. While Ford provides grants to organizations located in Detroit proper as well as the Detroit MSA, it also awards grants to organizations located in other parts of Michigan (like Ann Arbor), or even outside the state, for activities benefiting Detroit. For data nerds like us, this is known as the "geographic area served" by the grant, even though the location of the grantee may be elsewhere. The difficulty lies in the fact that most foundations provide scant or inconsistent data about this aspect of their work. Fortunately, Ford takes its grants data very seriously, and we can safely say that the total given by Ford from 2008-12 to benefit Detroit (defined as to organizations in Detroit proper + to organizations in the Detroit MSA + to organizations outside the Detroit MSA) was $52.9 million.

How much did the Ford Foundation give to Detroit from 2008-12? The answer is $27.8 million (as reported by the Detroit News), $41.5 million, $47.9 million, and $52.9 million; depending on how one interprets "give to Detroit," all are correct.

These numbers are important for many reasons, not least of which is that they provide transparency to the tax-privileged form of giving known as philanthropy. Foundations are granted a tax exemption in exchange for their contribution to the public good, so it is not unreasonable for the public to want to know how they do so. But more important is what these numbers represent. By any definition, Detroit is down, but it's not out. It is a community of workers and immigrants, young and old, long-time residents and new arrivals that cannot simply be written off. Michigan foundations know this, as do national foundations like Ford with historic roots in the community and the region, and they have stepped up to help the city weather the storm. Their latest initiative, informally known as the "Grand Bargain," will, together with public- and private-sector funds, leverage more than $350 million above and beyond the $512 million that they gave from 2008-12 to benefit the city.

How much do foundations really give to Detroit? A whole lot.

Bradford K. Smith is president of Foundation Center.

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