Kellogg Foundation Commits $40 Million To Detroit Effort

January 29, 2014       The NonProfit Times      

The W.K. Kellogg Foundation has joined a group of nearly a dozen foundations that has committed funding to help Detroit’s financial woes.

The Battle Creak, Mich., foundation, which last month opened an office in Detroit, announced a $40-million commitment, bringing the latest tally of pledges to $370 million to safeguard the Detroit Institute of Arts (DIA) and support pension obligations to the city’s employees and retirees.

Michigan Gov. Rick Snyder previously announced that the state would match the original $330 million committed by the nine foundations, though there are conditions and approvals still necessary by the legislature.

A fund established with the Community Foundation for Southeast Michigan (CFSE) has set a goal of $500 million in private, voluntary contributions. This latest commitment brings the total pledged to date to $370 million, by more than 130 philanthropic foundations and individuals.

The foundation dollars would be given only if a bankruptcy resolution includes making the DIA a stand-alone nonprofit separate from the city. Detroit filed bankruptcy last summer and the possibility still exists that DIA’s assets — which include iconic pieces valued in the hundreds of millions of dollars — could be sold off to satisfy creditors.

“In recent months, we have joined other national and local philanthropic organizations to meet with Judge Gerald Rosen to explore how we might contribute to a fund to support the city of Detroit’s pension obligations to current and retired workers and safeguard the Detroit Institute of Arts,” the Kellogg Foundation said in a statement released Tuesday. “We see this as an investment in Detroit, its children and families, and our shared future.”

In addition to CFSE, the foundation group includes William Davidson Foundation, Fred A. and Barbara M. Erb Family Foundation, Ford Foundation, Hudson-Webber Foundation, Kresge Foundation, John S. and James L. Knight Foundation, McGregor Fund and Charles Stewart Mott Foundation.

“The Kellogg Foundation’s commitment strengthens this effort, and we are hopeful the fund will continue to attract commitments from individual donors and institutions,” according to a statement from the nine foundations leading the effort. “It is our urgent hope and our belief that our combined investments in the future of Detroit will help stabilize and renew the city at this critical time.”