White House Taps Foundations to Aid in Detroit Revitalization

In the days before the federal government shutdown, the White House released details of a $300 million cross-agency strategy to revive the Detroit economy following the city government’s bankruptcy filing. Most of the funding comes from existing programs that will either continue to support efforts in Detroit or will now allocate a portion of their grants, loans or services to Detroit-based recipients. However, while innovation and entrepreneurship is a major plank of the strategy, little of the $300 million will directly benefit technology-based economic development programs. Instead, the White House has announced that it will supplement the work of community-focused foundations, which plan to provide $22 million for small business efforts in the city.

The federally funded aspects of the Detroit strategy mostly focus on revitalizing and redeveloping blighted neighborhoods and improving the region’s transportation systems. Nearly $150 million would be dedicated to demolition of blighted properties and community development, while nearly $140 million would help upgrade and install transit systems. Additional federal funding would be provided to improve public safety.

No specific federal funding is outlined in the strategy for entrepreneurship and economic development, however, several activities are planned to help improve the region’s economy and innovation ecosystem. The Small Business Administration will hold an American Supplier Initiative matchmaking event in Detroit, while the White House Office of Science and Technology Policy will deploy a Tech Team, made up of leading City Chief Technology Officers, to help improve city services. In addition 71 Detroit AmeriCorps members will be deployed to, in part, promote economic development, and a New Market Tax Credit convening will be held in the city to attract potential investors.

While the federal government does not plan to directly fund new Detroit economic development efforts at this time, the strategy incorporates support from a number of foundations, several of which announced new and renewed funding for small business support and economic development programs alongside the federal announcement.

• The Ford, Kresge and Knight Foundations will provide a total of $15 million for a second round of funding for the New Economy Initiative, which offers grants and a support network for Detroit entrepreneurs.
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• The Knight Foundation will provide $250,000 for the Detroit Development Fund, loans and technical assistance to small business owners, developers, building owners, contractors and subcontractors who are unable to acquire certain levels of capital necessary from traditional financing sources. The Knight funding will support early stage retail and creative businesses.
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• The John S. and James L. Knight Foundation and Rock Ventures will provide $500,000 to help implement the Tech Team recommendations, bring in innovation fellows, support technology upgrades and fund local technology training and mentoring.
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• The Ford Foundation will provide $1 million to upgrade the city’s grants management system.
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• The Knight Foundation will award 50, $5,000 capacity grants to subsidize training for public sector and nonprofit employees though the Community Foundation for Southeast Michigan. Eligible training efforts will support employees working to boost the Detroit economy.
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• The Ford and Kresge Foundations will provide $5 million to support future classes of Detroit Revitalization Fellows, which include mid-career professionals sent to city government and nonprofit sector partners. These classes of 25-30 professionals are trained at Wayne State University to serve as a bridge between the private sector and the city’s community and economic development programs.

Read the White House fact sheet...