As Detroit Struggles, Foundations Shift Mission

DETROIT, March 22, 2009, The New York Times — Two years ago, a charity called Women Arise went to the Hudson-Webber Foundation with a plea for help.

Hudson-Webber, a fixture in Detroit philanthropy, was a longtime supporter of the organization’s programs to help women rejoin society after being imprisoned. The foundation, however, did not typically get involved in the kind of messy personnel and financial problems that threatened Women Arise.

Worried about losing what the charity brought to the community, Hudson-Webber agreed to pay off its liabilities and settle the personnel issues — but only by merging it into Matrix Human Services, which offers an array of social services to low-income families.

The long economic decline of Detroit has prompted Hudson-Webber and other foundations in the region to change how they operate. Faced with sharply declining resources and exploding need, they are being forced to pick winners and losers, engaging in what Larry M. Gant, a professor of social work at the University of Michigan, calls “triage.”

“Insolvent organizations need to be dissolved, weak ones need to be merged and acquired, and only the strongest should receive the stimulus they need to become more financially sound,” Dr. Gant said. “It’s simple in theory but hard in practice.”

Thus, the Hudson-Webber chief executive, David O. Egner, is asking himself whether Detroit needs both a world-class symphony and its Michigan Opera Theatre, and, if so, whether they could share an orchestra.

“These are the kinds of questions we need to be asking,” Mr. Egner said.

At the Skillman Foundation, one local charity after another warns that without an infusion of cash, it will have to reduce services or shut down.

The Boys and Girls Clubs of Southeastern Michigan, for example, approached in December to say that one of its three facilities would need to be closed unless it received help from Skillman — even though the foundation had never given it money.

“They’re coming to us because they have nowhere else to go,” said Carol Goss, the chief executive of Skillman.

Foundations like Skillman and Hudson-Webber that are embedded in their communities have a harder time turning away local charities than do large national foundations like the Bill and Melinda Gates Foundation and the Carnegie Corporation.

“As a local funder, you don’t get to pick the best programs to work with or the problems you work on,” said Tonya Allen, vice president for programs at Skillman. “You have to deal with what you have in your own backyard.”

The decline of the auto industry, which has long been the bedrock of philanthropy here, is increasing the demand for help, even as assets at the local foundations have fallen.

The Ford Motor Company, financially the strongest of Detroit’s Big Three automakers, expects its giving to fall by about 40 percent from last year’s roughly $35 million, about $12 million of which went to organizations here. “We’re not making any long-term commitments at this time, nothing for capital campaigns, no new exhibitions with cultural partners,” said James G. Vella, president of the Ford Motor Company Fund.

The disappearance of donations from car makers, their suppliers and dealers have dealt a particularly hard hit to Detroit’s arts organizations, which Douglas Bitonti Stewart, the executive director of the Max M. and Marjorie S. Fisher Foundation, called “the venerable and the vulnerable.” The opera canceled one show, and question marks hang over performances and exhibits at other organizations.

And they, too, are turning to foundations to make up the difference. The McGregor Fund, for instance, increased its annual gift to the opera to $150,000, from $125,000. With the General Motors Foundation pulling out, “I knew they were facing some serious challenges,” said the fund’s president, C. David Campbell.

At the same time, Mr. Campbell and others are pressing cultural organizations to overhaul their operations.

“One of them,” Mr. Stewart said, “has been running an operating deficit of $20 million for two years, which suggests the problem goes beyond the crisis in fund-raising.”

“People won’t come back to Detroit without these organizations, so we have to support them,” Mr. Stewart added. “But they also have to make some hard choices to make our support worthwhile.”

Detroit’s foundations are also supporting each other more than they have in the past and are working to attract national philanthropic money. The Kresge Foundation, in suburban Troy, is considered a national foundation, but it recently gave a $300,000 grant to Matrix Human Services for emergency repairs to its boiler, windows and a parking lot.

Recently, more than a dozen local foundations gathered to discuss whether to pool their money into an emergency fund for struggling charities and to share ideas about how to use resources limited by the stock market’s plunge. A year ago, 10 of them pledged a total of $100 million over eight years to help restructure Detroit’s economy to attract skilled workers and fill its empty houses and storefronts.

That effort attracted money from three national foundations with headquarters in Michigan — W.K. Kellogg, Kresge and Charles Stewart Mott — as well as the Ford Foundation, which is based in New York but came under pressure last year from the Michigan attorney general to spend some of its money in the state where its founder made his fortune. (The Ford Foundation is not affiliated with the Ford Motor Company.)

Detroit’s foundations are also prodding the nonprofit groups they support to share resources. “Strategic pooling of resources by foundations and nonprofits is what is going to get us through this crisis,” said Edsel B. Ford II, a Skillman board member. “Living in silos is a thing of the past.”

YouthVille Detroit, a youth development organization, recently struck an agreement with the Detroit Science Center to create a science program, “Think Squad,” for local public television. The science center is providing money and scientific expertise, and YouthVille is contributing its production facilities and the production expertise of its teenage clients.

“The collaboration doesn’t benefit us financially,” said Judith D. Jackson, the chief executive of YouthVille. “But it does benefit our kids, and it brought us a lot of publicity, too.”

Under the same pressure from foundations to work together to obtain money, the Detroit Hispanic Development Corporation has joined with Southwest Detroit Weed and Seed, a crime prevention program that involves the Detroit Police Department and local businesses and residents. By participating in the program, the Hispanic development organization got federal money to train police officers and school staff members in gang awareness and to run gang-prevention sessions in middle schools.

Angela G. Reyes, the group’s founder and executive director, said her organization would not have received any money for those efforts without the collaboration.

“It has helped us work better together and make better use of resources,” Ms. Reyes said.