Metro Detroit family foundations expand clout
Mary Wilson went to work in her husband’s foundation soon after his death in 2014, finding herself in charge of a $1.2 billion operation, helping select a president and reviewing proposals to award $60 million in grants that first year.
“I can say it’s been very emotional,” said Wilson, widow of Ralph C. Wilson Jr., the Detroit-raised owner of the Buffalo Bills. “I’m better at it now. In March, it will be two years.
“It’s incredibly overwhelming and an incredible honor that Ralph put me in this position. It’s been hard work. And a great learning experience for me and for all of us,” she said. “What an exciting time for Ralph’s foundation to come alive. There is so much positive momentum in Detroit and Buffalo.”
That momentum will take center stage today in Detroit, when the Ralph C. Wilson Jr. Foundation announces significant grants to 20 southeastern Michigan charitable organizations as part of the foundation’s 2015 transitional legacy grant program.
Wilson, who will attend the announcement, wasn’t alone in her period of transition. The patriarchs of several major philanthropic Metro Detroit families have died in the last two years, leaving survivors, younger generations and foundation employees to carry on their legacies.
The Ralph C. Wilson Jr. Foundation, as well as the A. Alfred Taubman Foundation, lost their founders in 2014 and 2015, respectively.
The Max M. & Marjorie S. Fisher Foundation (Max Fisher died in 2005) and the William Davidson Foundation (Davidson died in 2009) are other examples of family foundations that are finding new life as surviving family members work to carry on the mission of philanthropic work.
There are now about 44,000 family foundations in the United States, making grants totaling more than $23.9 billion a year, according to the National Council on Foundations.
In Michigan, grant-making is expected to increase dramatically as foundations like Wilson’s and others grow and expand, and their operations are carried on by surviving family members and professional staffs.
The impact of family foundations will be felt far and wide in the next decade, with billions of dollars coming into Detroit and the region, said Mariam Noland, president of the Community Foundation for Southeast Michigan.
When Noland arrived in Detroit to run the community foundation in 1986, there were no endowments and no growth in private or family foundations.
“For the size and scale of this community, we were not rich with private foundations,” Noland said of the 1980s and 1990s. “That has begun to change.”
With the Wilson Foundation making its first full year of grants this year and the Taubman Foundation expected to begin making grants in 2016, Noland said the dollars involved will have a tremendous effect on the community.
The Wilson Foundation will focus its giving on Metro Detroit and Buffalo, New York, two communities close to Ralph Wilson’s heart. With $1.2 billion on hand, the foundation must spend all its money over the next 20 years and will focus on causes such as healthy lifestyles, early childhood and youth development, caregivers, community development and economic growth.
Funding will start flowing from the Taubman Foundation after the sale of Alfred Taubman’s art collection at Sotheby’s is complete in the first quarter of 2016, said Chris Tennyson, a Taubman family spokesman. The collection is worth an estimated $500 million. The sales began earlier this month and will run through the end of January.
“It’s just a huge impact,” Noland said. “What does it mean for philanthropy? My question is, how do we keep them hitched? Those family members won’t all want to stay here. How committed will they stay over the next number of years? That’s the question.”
The Council on Foundations defines a family foundation as one whose funds are derived from members of a single family. At least one family member must continue to serve as an officer or board member of the foundation, and as the donor, they or their relatives play a significant role in governing and/or managing the foundation throughout its life.
Most family foundations are run by family members who serve as trustees or directors as volunteers, receiving no compensation. In many cases, second- and third-generation descendants of the original donors manage the foundation. Most family foundations concentrate their giving locally.
Robert S. Collier, president and CEO of the Council of Michigan Foundations, said of the 2,600 foundations in Michigan, about 1,800 are family foundations. Based on estimates of 2014 data, these Michigan family foundations make grants between $750 million to $850 million a year.
“The arrival of Davidson and Wilson foundations changes the numbers in a big way,” Collier said.
In 2013, the Davidson Foundation awarded more than $47 million in grants. In 2014, it upped that amount to $50.7 million, foundation officials said.
The Erb Family Foundation was formed in 2007. The Fisher Family Foundation and the William Davidson Foundation both formed in 2005. All brought an elevated level of private wealth into the public sector through grant-making in the arts, the environment and education, as well as Jewish life.
Collier said family foundations represent a majority of the Council of Michigan Foundations’ membership and the majority of private foundations. The majority are small with assets of $1 million to $2 million or less, and do not accept unsolicited grants, Collier said.
John Erb was in the eighth grade when he started working for his father by sweeping floors at the family business, Erb Lumber.
His parents, Fred and Barbara, were visionaries and lovers of the arts and environment who made charitable giving part of their daily life. They formed the Erb Family Foundation in 2007, which John runs as president.
From the offices in Bloomfield Hills, Erb thinks about his parents’ legacy and the responsibility he has to carry it out every day. He is one of a handful of surviving adult children running a Metro Detroit family foundation started by his parents.
“I’m involved daily. It is a full-time job for me. With our mission over the years, we went through strategic planning sessions to make it broader and deeper,” he said.
The foundation, which has $280 million in assets, primarily focuses on funding the environment, the arts and Alzheimer’s research. The foundation has plans to award $12 million in grants in 2016, Erb says.
“It’s both an incredible privilege and incredible responsibility” to run the family foundation as president, Erb says. “It is a business, too, the responsibility of making the grants and investments. It’s more difficult to give away money purposely than people would understand.”
Metro Detroiters Paul and Carol Schaap were the first funders for Detroit’s bankruptcy “grand bargain” through the A. Paul and Carol C. Schaap Foundation. They pledged and paid $5 million toward the $816 million deal that shielded city art and shores up city pensions in the city’s bankruptcy case.
Paul Schaap, a former chemistry professor at Wayne State University and founder of Lumigen Inc., said he and his wife run the foundation out of their home. They grant about $1 million a year on issues such as higher education and theology.
They have no children but several nieces and nephews who “may fairly soon carry this on.”
“That is a decision we have to make in the near future. We don’t know yet,” Schaap said. “I think collectively these family foundations are a fantastic asset for the Metro area and Detroit. They tackle issues, problems that perhaps sometimes government does not. They do some problem-solving.”