Darren Walker heads the Ford Foundation founded in Detroit. (Martin Dixon)
The New York-based Ford Foundation’s lead contribution to a fund to protect the Detroit Institute of Arts and bolster city pensions culminates a seven-year homecoming for the $11 billion philanthropy founded 78 years ago in Detroit by Edsel B. Ford.
The foundation’s $125 million pledge, coupled with $100 million from the Troy-based Kresge Foundation, is the necessary backbone of the $330 million fund expected to help speed a settlement of Detroit’s historic bankruptcy — provided DIA donors and state officials led by Gov. Rick Snyder can muster the separate contributions needed to close the deal.
“As Detroit goes, so the rest of the country goes,” Ford Foundation President Darren Walker said in an interview Wednesday. “Detroit is very special in our narrative because it’s where our capital is created. There are so many lessons for America in Detroit. Detroit represents this huge opportunity, probably the greatest opportunity in the country for revitalization.”
The foundation’s president, in the top job just four months, is widely credited with playing a critical behind-the-scenes leadership role in an effort that now carries the imprimatur of the nation’s second-largest foundation. Incorporated in Michigan and New York, the foundation is no longer affiliated with Ford Motor Co. or its founding family.
The charitable push is a remarkable demonstration of teamwork, unconventional thinking and quick action by a community stereotyped as stodgy and hidebound. If its principals, guided by the mediation of Chief U.S. District Judge Gerald Rosen and the pressures of the bankruptcy calendar, are successful, their example could redefine the confluence of philanthropy and urban revival.
People involved in formation of the fund, as well as outside experts who track philanthropic organizations, call the Ford Foundation’s role a linchpin that adds credibility and national scale to the historic effort: Raise private dollars, add some form of public funding, and use the result to protect the community’s artistic inheritance and honor its obligations to city retirees.
The Ford Foundation’s role is no guarantee of success. Without its heft as the nation’s second-largest foundation, key participants say, the push to raise cash to help settle the largest municipal bankruptcy in American history would be headed for much larger obstacles, painful asset sales and years of contentious litigation.
“Ford has played an absolutely critical role here,” said John H. Vogel, adjunct professor of business administration and director of the Center for Business and Society at Dartmouth College’s Tuck School of Business. “They’re making a huge bet. While $330 million is a lot of money, it only gets you so far.”
Except that $330 million isn’t the goal, so much as a good start. Foundation executives and people close to the process say the widely rumored $500 million target is “a floor” likely to be exceeded. Numbers and expectations are changing continually as federal mediators continue to broker talks between the city, creditors and their lawyers.
The Ford Foundation’s leading role in the fundraising effort is a powerful endorsement of the local philanthropic community and its attempt to reshape the reality of the nation’s poorest major city. It also signals that Detroit’s prodigal philanthropy, founded in 1936, is reconnecting with both its hometown and a legacy rooted in the Blue Oval and its creators.
“They could have taken a pass on this,” said Rip Rapson, president of the Kresge Foundation. “This is less a re-engagement and more a quantum leap in engagement.” Walker believes “in the importance of Detroit to his core, and that this is emblematic of the post-industrial American city.”
The Ford Foundation’s leadership hasn’t always seen it that way. Ford family patriarch Henry Ford II, frustrated with the anti-capitalist drift of a foundation built on the rewards of American capitalism, severed his ties with the foundation in 1976. In the ensuing years, the foundation’s support of Michigan and its largest city waned even more.
Between 1950 and 1973, while Hank the Deuce remained involved in the foundation, grants to Michigan and Ford-affiliated organizations like Henry Ford Hospital and Henry Ford Museum & Greenfield Village averaged $54.2 million a year. Between 1998 and 2002, grants to Michigan charities averaged just $2.5 million, ranking it No. 40 among U.S. foundation grants to Michigan charities.
In 2006, Michigan Attorney General Mike Cox launched an investigation into the Ford Foundation’s activities, focusing on its governance and record of meager giving to Detroit and Michigan causes. The next year, the foundation awarded a $25 million grant to help found the New Economy Initiative; between 2003 and 2013, Ford grants to Detroit charities totaled $150.6 million.
“Their engagement level has been increasing since they made the commitment to NEI,” said David Egner, president of the Hudson-Webber Foundation in Detroit and executive director of the NEI. “Not just with dollars, but with human capital. They are a very valuable partner to local philanthropy in ways they may not have been before.”
With its leading role in what planners call the “Art Trust Plan” to save the DIA and support underfunded pensions, the Ford Foundation is back in Detroit’s philanthropic fold. In recent years, its grant-making to such redevelopment projects as the Riverfront Conservancy, Detroit Future City and the M-1 rail project have been augmented by expanding deployments of staff expertise.
In short, Walker and the Ford Foundation see three fundamental things occurring simultaneously in Detroit: need, an undeniable obligation of their legacy and the makings of a turnaround that could define 21st-century American resilience if bankruptcy and restructuring can be used to craft a more viable future.
Detroit’s Chapter 9 crisis is a harrowing, unpredictable process offering an unprecedented opportunity to fix problems threatening municipal collapse. That a foundation named Ford is taking a leading role in one attempted solution is probably what Edsel envisioned many years ago.
Daniel Howes’ column runs Tuesdays, Thursdays and Friday.