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The quiet launch of 1993’s Detroit Initiative changed Kresge and the city where it was founded

Centennial, Detroit

Tony Proscio

Tony Proscio

Myron Farber

Myron Farber

John Gallagher

John Gallagher

Beginning today and through the coming weeks, Kresge will feature each Monday on its website excerpts from Embracing a City: The Kresge Foundation in Detroit 1993-2023 (Momentum Books). This behind-the-scenes look into 30 years of the unlikely partnerships, unique collaborations, varied financial tools and bold bets of The Kresge Foundation — the work of veteran journalists Tony Proscio and Myron Farber — was first released in 2018 covering the span of 1993 to 2017. An updated edition includes a new chapter from Proscio covering the creation of the cradle-to-career Marygrove P-20 campus following the demise of Marygrove College in Northwest Detroit. Meanwhile, longtime Detroit-based journalist John Gallagher has revised and updated the original chapters, which cover the development of a shared community vision through efforts such as the Detroit Future City Project Plan, the work of reviving the Woodward corridor and city neighborhoods, the creation of M-1 Rail and the QLine, the elevation of the arts and culture as cornerstones of civic vitality plus a concluding look at the road ahead for the city and Kresge’s role.

This first excerpt is from Chapter 1, which traces the evolution of the foundation’s grantmaking in its hometown, a deepening commitment to the city beginning in the 1990s and the accelerating strategic involvement that led to a swift resolution to the city’s bankruptcy. As an added bonus, the entirety of Chapter 1 can be downloaded through a link you’ll find at the end of the excerpt.

A Shared Community Vision

For close to fifty years, Detroit has held a peculiar fascination for American philanthropy. The prospect of reversing a steep and accelerating decline, a cause at once tantalizing and forbidding, has drawn a number of foundations into repeated, often unsatisfying, efforts at novel civic-philanthropic initiatives there. Like Kafka’s castle, the city’s unique history of triumphs and crises has loomed on the philanthropic horizon as alluring yet stubbornly impenetrable.

Millions of charitable dollars have been ventured to various ends in Detroit, including education reform, the arts, regional cooperation, nutrition and health, neighborhood redevelopment, economic revitalization, juvenile justice, and many others. Some of these initiatives contributed to improvements here and there, though for most of this history only a very few led to any fundamental shift in conditions that average Detroiters would experience. Several efforts flared and sputtered without leaving much of a trace.

Perennially wary of political entanglements and public controversy, funders not rooted in the city tended for decades to focus their projects narrowly, concentrating on just one or two aspects of urban life, such as health or urban planning or after-school programs. They hoped, in these circumscribed areas, to find a critical lever or “root cause” that, if set to rights, might weaken or blunt some of the forces of decline. But they generally sought the comfort of coalitions, banding with other funders, public and private, to share the risks. And they often pulled the plug when conditions failed to change significantly—as the Robert Wood Johnson Foundation did with its Urban Health Initiative, or the Ford Foundation with its Neighborhood and Family Initiative, or the Annie E. Casey Foundation with its “Making Connections” community revitalization effort.

With little staff to devote to Detroit’s complex environment, where face time and trust building are indispensable elements of any program of change, foundations sought, as one veteran Detroit grantmaker put it, “very narrow portals for support, so that it was easy to close the portal if things didn’t go well. They tended to be funders, not partners. And they set predetermined time horizons—three to five years, typically”—within which to succeed or, more often, to make a swift and silent exit.

This sensitivity to risk, as it applied to Detroit, was rooted in decades of foundation orthodoxy that discouraged making grants in desperate environments. When the Ford Foundation set out in the late 1970s to draw conclusions from its previous twenty years of urban philanthropy—from programs encompassing community development, school reform, and fair housing and lending—senior executives repeatedly invoked the metaphor of triage: foundations should concentrate on a middle band of need, places that are neither advantaged nor collapsing (one signature Ford program had actually been called “Gray Areas”), where resources and opportunities are still plentiful enough to offer a tangible prospect of success.

As a key policy paper summed it up, smart philanthropy “should avoid areas affluent beyond the need for intervention as well as those devastated beyond hope.” One senior officer at the time was more specific: “You can’t get bogged down in the South Bronx or Camden or Gary.” (As it happens, Ford soon changed its opinion of the South Bronx, where it contributed to an extraordinary, and widely praised, revitalization program in partnership with enterprising community organizations using massive city and state subsidies. But even that experience was viewed as evidence that only a gigantic commitment of public dollars could make a foundation initiative successful in such a place. Camden and Gary remained off-limits.)

Yet as Detroit’s distress descended into disaster in the late decades of the twentieth century, the sheer scale and urgency of the problems proved hard for foundations to ignore. After all, this was not just any industrial-age city fallen on hard times; this was Detroit, once the Arsenal of Democracy, cradle of the African American middle class. Though it had become an all-encompassing tragedy, it was also a place with unmistakable assets, including a strong (if battered) local culture and sense of identity, a determined resident population, an assortment of local and nearby universities and hospitals, a committed civic leadership, and a healthy regional economy. Seen in a certain way, it was the kind of place for which philanthropy was designed: important, beleaguered, resolute, and—surely, somehow—primed to revive.

Detroit is also home to several foundations of its own, which could exert leadership, test emerging ideas, and serve as the local funding partners on which outside institutions prefer to rely. These resident institutions, such as the Skillman, McGregor, and Hudson-Webber foundations and the Community Foundation for Southeast Michigan, were dedicated entirely or primarily to the Detroit area as part of their founding missions. They could be depended on to cultivate Detroit grantees, persevere through setbacks, and struggle for even small signs of success, with which they might then hope to attract bigger partners.

Through most of the twentieth century, however, national funders tended to choose their targets in Detroit more warily, set tight boundaries on the scope of their involvement, and proceed only when the potential losses seemed manageable. That was true even for those foundations as close by as Kresge (Troy), Kellogg (Battle Creek), or Mott (Flint), and certainly for those headquartered farther away, like Ford (New York City), Casey (Baltimore), or Knight (Miami).

 A Period of Optimism, a New Commitment

This pattern began to change slightly in the mid-1990s, when the national economy swelled with the technology boom and Detroit government seemed poised for a long-delayed modernization and housecleaning. With the retirement, after two decades, of Mayor Coleman A. Young, a sense of optimism greeted the 1994 arrival of Dennis W. Archer, widely regarded as a bridge builder between potential investors and Detroit’s capital-wary political establishment. Although Archer’s two terms produced only modest reforms to most city services, the strong economy and general sense of political change drew new interest from investors and foundations.

By 1998, nearly four thousand new housing units were planned or under construction in central Detroit, and the software developer Compuware, with $1 billion in annual revenue, announced that it was moving its headquarters downtown—the first major business to locate there in decades. New casinos, a signature Archer initiative, were under development and promised to add as much as $200 million a year in new revenue to cash-starved city coffers. In 1996, with funding from The Kresge Foundation, the Archer team began a sweeping neighborhood planning process, aimed at setting priorities for commercial development, reconstruction, demolition, and maintenance. The spell of economic and political sunshine in these years gave rise to a multitude of green shoots: falling crime, poverty, and unemployment (though these remained high by national standards); rising property values; an uptick in new businesses and lending; and consequently a growing sense of opportunity for national foundations, several of which launched major initiatives in Detroit during this period.

Among these was The Kresge Foundation—a funder of national scope and stature, one of the twenty largest private foundations in the United States, headquartered about twenty miles outside the city—which devoted close to $50 million to Detroit projects during the Archer years. Amid its roughly $70 million in average annual giving at the time, the Foundation had always made grants in Detroit. But the creation of a dedicated Detroit Initiative in 1993 was a sharp departure for a foundation that had long regarded its terrain as the entire country and that focused on promising projects rather than preferred places.

At first, the Detroit Initiative was launched quietly at the instigation of a core group of board members. It seemed to grow less out of a sense of strategic potential than out of duty to the city where the Foundation’s wealth had been created through the iconic and highly successful S. S. Kresge retail chain. But any reticence soon gave way to a more confident feeling of rising opportunity, brought about by the economic and political thaw. “The snow has finally melted as this is written,” Foundation President John E. Marshall III wrote at the beginning of one of his annual report essays.

Still, even amid the increasing optimism, Kresge’s approach remained cautious. … It hewed close to two core principles that, from the Foundation’s inception, had underlain almost all of its grants nationwide: it would primarily support capital projects, and it would require a significant matching contribution from other funders for every dollar it disbursed. Consequently, much of its grantmaking in those years was for buildings or infrastructure, financed in close partnership with other, usually Detroit-based funders. One example was a $10 million grant for the GreenWays Initiative, a project championed by the Community Foundation for Southeast Michigan that aimed to create a network of bike and hiking paths across the region. Kresge’s contribution for the initiative was eventually matched nearly seven to one by other public and private donors.

Learn more about Embracing a City and download Chapter 1.