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The following is adapted from the Philamplify report, “Kresge Foundation: Will This Bold Grantmaker Become the Next Great Social Justice Foundation?”

The city of Detroit filed for Chapter 9 bankruptcy on July 18, 2013, the largest municipal bankruptcy filing in United States history. After a two-month trial, U.S. Bankruptcy Court Judge Steven Rhodes approved a plan in November 2014, to counteract decades of financial decline and make the city solvent again. The so-called “grand bargain” will ultimately raise more than $800 million from foundations, the Detroit Institute of Arts (DIA), private donors and the state of Michigan, as reported by The New York Times. According to The New American, it will reduce the city’s debt by $7 billion, save the DIA, earmark $1.7 billion to maintain the city’s essential services like police and fire protection and minimize pension cuts to public sector retir­ees by 4.5 percent.

In part, the grand bargain was created to protect the DIA from having to auction off its art – an option since the DIA was then owned by the city. Founda­tions and others saw the importance of preserving Detroit’s historical art pieces and agreed to make contributions to the grand bargain to reduce public employee pension cuts if the DIA’s survival could be guaranteed. In fact, Kresge Founda­tion CEO Rip Rapson testified during the Detroit bankruptcy trials that the DIA is significant to Detroit’s history and future, calling it “a cultural asset the city can’t afford to lose or have diminished.” In addition to contributing $100 million to the grand bar­gain, the DIA also became an independent charitable trust, like most large American museums, instead of being owned by the city. In January 2015, Nonprofit Quarterly reported that, thanks to generous pri­vate donations and roughly $70 million granted from foundations, the DIA reached its $100 million goal.

The grand bargain also helped Detroit out of bankruptcy by creating a new entity, called the Foundation for Detroit’s Future, which is governed by a five-member board of directors. The board includes Community Foundation of South­east Michigan President Mariam Noland, PVS Chemicals Inc. President and CEO James Nicholson, former Wayne State University President Allan D. Gilmour, Kresge Foundation CIO Robert Manilla and Ford Foundation General Counsel Kenneth Monteiro. Going forward, money from foundations, private donors and the state of Michigan will go through The Foundation for Detroit’s Future and the foundation will then funnel the money to the city.

The first grand bargain payment of $23.3 million dollars was paid to the General Retirement System and the Police and Fire Retirement Systems in December 2014, including $18.3 million from founda­tions and $5 million from the DIA. A total of 20 payments will ultimately be made to the City of Detroit from the Foundation for Detroit’s Future. As of December 2014, the city’s pension fund was 88.9 percent funded. This equated to a market value of approximately $3.1 billion. Twelve foundations are committed a total of $366 million over 20 years to the grand bargain. The contributions made by foundations are listed in the graph below, including the subject of the most recent Philamplify report, “John S. and James L. Knight Foundation: Can It Look Beyond #ShinyBrightObjects and Do More to Promote Equity?”

December 10, 2015 marked Detroit’s first year free of bankruptcy – though, as the Detroit Free Press noted – there is more work to be done. In the years to come, we hope foundations like Kresge and the others that contributed to the grand bargain will listen to and collaborate with Detroit residents to honor their rich history and bright future.

Jocelyn O’Rourke was a Philamplify fellow at the National Committee for Responsive Philanthropy (NCRP). She is currently a research associate at the Criminal Justice Policy Foundation.

CC image of Detroit Institute of Arts by VasenkaPhotography.


After the release of NCRP’s comprehensive Philamplify assessment of the Walton Family Foundation in May, NCRP asked Facebook users, “From 2010-2014, Walton Family Foundation granted nearly $23M to improve education in Louisiana. If you had that money how would you spend it?” The answers varied, but the main points that came up repeatedly among the comments included putting children first and hiring teachers who are passionate about teaching – and giving them the ability to teach with adequate training and proper pay.

Walton Family Foundation spends virtually all of its education grants on charter schools. While charter schools can address the concerns identified in our Facebook question for their students, can they contribute to large-scale change that addresses these issues for all students in our nation? In fact, one of the key findings from the Walton Family Foundation assessment states, “The expansion of high-quality charter schools and related advocacy have created meaningful benefits for individual students and families, but have not achieved far-reaching, sustainable and equitable system-wide improvements.”

What really stands out to me about these comments is that, while our Facebook users gave some great advice and suggestions on where money should be spent in their schools, no one stated a preference for what types of schools would best achieve these suggestions. For example, no one singled out “charters,” “school privatization” or “school choice” as spending priorities. As one of the largest charter school funders in the nation, Walton Family Foundation asserts that charters can create a better opportunity for students, and spent $23 million on charter school education in Louisiana between 2010 and 2014. Maybe if that money was spent to create the education environment that community members are asking for – regardless of the type of school – then all students could benefit and the entire education system could be improved.

After reviewing these responses, I had to ask myself the same question: What would I do with that amount of money? I would prioritize making sure the basic needs of schools and students are met. This includes but is not limited to: teachers who can and want to teach, teachers who are attuned to community needs, administrations that actively encourage parental engagement, clean and safe facilities, sufficient school supplies, healthy lunch and snack options, etc. We cannot begin to demand other resources and class subjects, advanced technology and more, without providing schools with their basic needs. Unfortunately not all schools get anywhere near the funding they need to meet these basic needs. In October 2014, The Center on Budget and Policy Priorities found that “At least 30 states are providing less funding per student for the 2014-15 school year than they did before the recession hit.” Almost a decade after the recession began, these appalling numbers begin to explain why our public school systems are not meeting everyone’s standards.

Is it more efficient, effective and fair to fix our current public school system by bringing it up to our expectations, or is creating a whole new education system the best way to achieve high-quality education for all? Visit our Facebook page to comment on this blog post and visit Philamplify to comment and vote on NCRP’s recommendations for the Walton Family Foundation!

Jocelyn O’Rourke is a philanthropy fellow at the National Committee for Responsive Philanthropy (NCRP), where she has provided research support for recent and forthcoming Philamplify assessments, including on the Walton Family Foundation. Follow @NCRP on Twitter and join the #Philamplify conversation.