Philanthropy 2.0

New charitable leaders are redefining acts of giving — and are having immediate impact on Detroit


Published:

Gretchen Valade
Wrote a $15 million personal check in 2005 that saved the Detroit Jazz Festival.
"When you're young and you have some money, you think, 'Antiques, paintings, oh boy!' And then you start to realize, you're up to here in antiques and paintings. There's just too many people who need things more than I do."
Dr. Syed Mohiuddin
Chairman of Leadership Next, a United Way local initiative that emphasizes meaningful relationships with the community.
"The number one thing I tell people is to know that they're needed, and to know you can make a difference. At the end of the day, we all want the same damn thing. We all want to kick ass."
Nick Gorga
Co-founder of Hatch Detroit,  whose purpose is to revive downtown Detroit's retail scene.
"There's a tremendous blurring of philanthropy, business, and life right now in Detroit at the grassroots level. ... what do you call this thing? Is it business? Is it charity? Is it philanthropy? As corny as it sounds, it's called Detroit."

Gretchen Valade is the heiress to old money, a pure lover of jazz, and a woman whose checkbook has made her more conspicuous than she'd like to admit. To temper that state of being, she's been known to sit at the bar of the Dirty Dog Jazz Café — the restaurant she opened in Grosse Pointe Farms to pay homage to the music she's loved since childhood — and chat up strangers who have no clue who she is. She is reticent to talk about why anyone would think she's a big deal.

There are those who have their reasons. Valade has been a significant financial supporter of Coalition On Temporary Shelter (COTS) since reading in the newspaper some years ago about a homeless woman and her children who slept in Detroit's Hart Plaza every night. "No one should have to live like that," Valade said over lunch at Dirty Dog earlier this fall. She also supports the Humane Society of Huron Valley because that's where she adopted her beloved dogs. And she's given about $3.5 million over the last few years to St. John Hospital and Medical Center because that's where her late husband received his care. According to Valade, she didn't start this "second career" in giving until the age of 75, when she realized she'd spent much of her life collecting stuff that didn't matter.

 "When you're young and you have some money, you think, 'Antiques, paintings, oh boy!' " Valade, now 88, says. "And then you start to realize, you're up to here in antiques and paintings. There's just too many people who need things more than I do."

Valade's boldest move in this direction makes her other gifts seem small. The steely granddaughter of Hamilton Carhartt, a man who made it big manufacturing overalls for railroad workers in the late 1800s, Valade wrote a personal check in 2005 for $15 million that saved the Detroit Jazz Festival.

"It made me so mad," she says, when the festival's longtime corporate sponsor, Ford Motor Co., decided to drop it. Most agree now that without Valade's life-line to create a permanent endowment for the struggling, but world-renowned, festival, it wouldn't have survived. In a subsequent documentary about Valade's life and legacy in Detroit called When I Need to Smile, musicians referred to her as the "guardian angel" of jazz and "a woman wealthy in both heart and soul ... and in bank."  

And so it was, with her single show of "bank," that Valade became the classic, high-dollar practitioner of the kind of philanthropy that America — and much of Detroit — was built on. Denny Stilwell, president of Mack Avenue Records, which Valade owns, also suggests in the documentary that Valade's abilities to do good with her money is what society still aspires to. "I think there's a certain part of all of us," he says, "who meet Gretchen who secretly think, ‘Wow, I'd really like to be that when I grow up.' "

THE ‘SOCIETY' FACTOR

The power to change the fortunes of one person, one cultural institution, or an entire society with personal wealth is still considered a sign of success. We tend to heap loads of attention on philanthropic feats propelled by money, as if they are nothing short of miracles. Countless studies have shown that giving is the basis of true happiness. We may wonder at times how happy we'd be if we had the same ability to give away our money in such grand fashion.

And yet, will younger generations really "grow up" to be like the Warren Buffetts, Bill Gates, and Gretchen Valades of the world? Will their itch to do good mirror the philanthropic gestures of the past? Will they even want it to?

These are the legitimate questions that tend to inform conversations on how Detroiters approach philanthropy today. There is also the constant mention of "society" in Detroit as it exists in other great American cities long anchored by wealthy families, and how its perpetual fundraisers, balls, and parties can come off more like social time than actual philanthropy. Others wonder about the "death of the socialite" manifested in the increasing irrelevance of status among those in their 20s and 30s. Some people have wondered if it's worth writing about philanthropy at all, as if it were as tricky a subject as race or gender. There is the danger of committing a "major faux pas," one person said during the reporting of this story, if you don't interview the right people.

Of course Detroit has no shortage of big givers who have been instrumental in shaping the Motor City for the last 100 or so years. Large individual giving, in fact, is alive and well across the region, and very much a critical component to sustaining charitable and nonprofit cultural institutions both big and small, professional fundraisers say. This year alone we saw New York real estate developer Stephen M. Ross make national headlines when he gave a record $200 million donation to his alma mater, the University of Michigan. Stephen Polk gave $10 million to the Detroit Zoo for a proposed penguin exhibit. On a smaller but no less impressive scale, a California businessman named Jeff Adler who grew up in metro Detroit recently divided a gift of $750,000 between city organizations including the Wayne State University College of Nursing and the North Rosedale Park Civic Association. He's given these organizations carte blanche to do with the money as they please, and he told the Detroit Free Press that he feels "fortunate" that he can write that kind of a check.

PHILANTHROPY'S EVOLUTION

But even as single wealthy donors continue to pull their weight, Detroit's most influential charitable leaders are describing a philanthropic landscape in which the views on giving have fundamentally changed. "There's still a lot of wealth in the community," says Frank Fountain, a former Chrysler senior vice president and the former head of the Chrysler Foundation. "But being philanthropic isn't about being rich." Responsible for allocating about $25 million a year for charitable causes during his years with the foundation, Fountain makes a surprising leap in equating the average citizens in Wayne, Oakland, and Macomb counties with the community's wealthiest benefactors. Fountain insists that's what they became, after all, when they voted for a tax increase to save the Detroit Institute of Arts. "In effect, [the voters] said, ‘I'm OK with supporting the DIA with my dollars.' That's philanthropy, just in a different way."

The economics of giving have certainly played a part in the changing philanthropic scene as the number of local nonprofits grow, says David Near, a former executive with Dow Chemical who has spent the last 10 years consulting for organizations across the state. There are more than 1 million nonprofits in the country. The number in Michigan alone skyrocketed in the last decade to approximately 40,000 public charities with 501(c)(3) status. "Over the next 30 years, dollars are going to be spread so thin," says Near, forcing organizations to become aggressive in producing results. People obviously don't want to support something that doesn't work, he says.

More prominent in redefining acts of philanthropy, however, has been the larger cultural shift in how both nonprofits and the individual giver have come to define what it means to give back and to create permanent change. Simply throwing money at a problem isn't always the answer, experts say, and aspirations for building wealth only to become charitable later in life is losing ground to the desire to take immediate action.

Whether the economy will continue to produce wealthy potential donors, in other words, is beside the point. "Who's the next big Rockefeller or Bill Gates?" Near wonders. "Well, I'm not so sure they're going to exist in the future."

That may sound extreme, but it's already happening as members of younger generations place face time and passion before money when it comes to the causes they care about. As a result, traditional dichotomies of grassroots versus boardroom or old versus young have started to collide — particularly in a city like Detroit where bankruptcy and the collective feeling of hitting rock bottom has created a perfect environment for changing the charitable rules.

The people at the local giving table may have not "paid their dues" or worked long enough to amass significant wealth. Still, they have legitimate ideas for making their worlds better — and they believe they can pull them off.

Former Detroit Mayor Dennis Archer — whose scholarship fund managed by the Community Foundation for Southeast Michigan has so far distributed more than $1 million to needy students — remembers a time when people were more willing to accept the premise that someone needed to be wealthy in order to make change.

"People aren't intimidated by big money anymore," Archer says.

Near suggests that the word "philanthropy" itself conjures images of an elitist world whose traditions of giving millions of dollars to the symphony, the arts or the opera in decades past didn't necessarily align with the more pragmatic ideals of the middle class. The use of the term today, he says, may even perpetuate social divisions that no longer exist in charitable endeavors. For this reason, the vernacular with regard to philanthropy is also shifting, and Near suggests that anyone who identifies as a "philanthropist" or a "socialite" runs the risk of sounding passé. "It's a fascinating dynamic," he says.

OUTLIERS FOR CHANGE

As the president and CEO of United Way for Southeastern Michigan, Michael Brennan was among the community's first charitable leaders to operate on the premise that emerging philanthropists want to feel intimately connected to their work and create change through action instead of one-off financial contributions. They have a higher tolerance for risk and failure, Brennan says, and they are hungry for creative solutions to the biggest social problems. Brennan's initiatives for cultivating these younger, "emerging philanthropists" on the local level has helped him and his colleagues establish Detroit as an unlikely model for United Way chapters around the world.

It turns out that United Way Worldwide, the decades-old clearinghouse for financial contributions to countless global nonprofit initiatives, had struggled for years to stay relevant as people started to donate money directly to causes online. Furthermore, what Brennan discovered in 2003 when he came to his leadership role in Detroit was that years of doling out money to local United Way partners hadn't produced quantifiable change in the community.

There were "a lot of static relationships" with organizations expecting United Way to keep handing out the proverbial checks, says Dr. Syed Mohiuddin, a volunteer leader in United Way's campaign to engage younger generations in more effective philanthropy. "Mike changed [this] structure," he says. "He knew this wasn't a money problem."

Reluctant to take credit, Brennan will only acknowledge what he and many others have known for some time: The future of philanthropy depends as much on bold purpose and accountability as it does on money. It's not that he doesn't appreciate the value of money or the legacies that older generations have established with their huge financial gifts. The United Way still relies significantly on donations, which Brennan says are critical to United Way's "Big Hairy Audacious Goal" (BHAG) to make Detroit one of the top five places to live in the U.S. by 2030. "I just know that to get where we need to be, we're not going to get there just by writing checks," Brennan says. "If all we ask for is money, then we're not being good stewards of our mission."

POWER ON THE GROUND

Hatch Detroit co-founder Nick Gorga has had his fair share of publicity for the unique idea that has blended business acumen with charity to help revive downtown Detroit's retail scene — something he believes will positively affect every Detroiter's quality of life. Mohiuddin has led a program more privately on the second floor of Sinai Grace Hospital that United Way for Southeastern Michigan believes will equip the children being born today to become the kind of citizens by 2030 who will be needed to make the city a more viable place to live.

Both men are in their 30s and have an almost unbelievable drive to look beyond their day jobs for ways to positively impact the people around them (Gorga spent more than 20 hours a week planning out Hatch in addition to 70 hours as a practicing attorney). Though their charitable work is different, in many ways Gorga's and Mohiuddin's trajectories are the same. They're establishing notable pathways to change, and they've become case studies for how the new philanthropic philosophies practiced by Detroit do-gooders can have real impact on the city.

Hatch Detroit's mission, started in 2011, is simple — run a yearly public contest in which for-profit retail businesses compete for a $50,000 cash grant that they can use to open and continue operating in Detroit. The city's retail scene had been fairly nonexistent for years, and Gorga believed that the entrepreneurs crazy enough to open in Detroit needed more than just a good business plan if they were going to succeed. Three businesses have won the contest so far — including 2013 winner Batch Brewing Co. — and continue to be supported with services from the Hatch Detroit network that Gorga helped build.

Curiously, Gorga doesn't seem as excited about the financial component of Hatch as he does about what the charity has been able to do for some of the entrepreneurs who've gone through the contest process and lost. By being associated with Hatch Detroit and getting publicity from the public voting process, several business owners — including Rock City Pies, Detroit River Sports, and more recently, Detroit Vegan Soul — have opened up shop anyway and are receiving support from other entities. That's how a micro grant can help on a macro level, says Gorga, admitting this kind of charity probably wouldn't work in any other American city.

"There's a tremendous blurring of philanthropy, business, and life right now in Detroit at the grassroots level," Gorga says from his office at Honigman, Miller, Schwartz, and Cohn in downtown Detroit where he is a litigation attorney and recruiting partner. "I mean, what do you call this thing? Is it business? Is it charity? Is it philanthropy? As corny as it sounds, it's called Detroit."

Gorga calls himself a "native son" of Detroit who moved to Chicago to start his career, only to pine years later for a chance to help fix the problems that plague his hometown. When he moved back in 2008, he deliberately sought a job with Honigman, Detroit's largest law firm with a rich history of encouraging its employees to be philanthropic leaders in practically every cultural institution and nonprofit initiative.

"Nothing goes on (in the city) that we're not a part of," says Honigman's Chairman and CEO David Foltyn. "Frankly, we were involved before it was hip to be involved."

Still, the idea for Hatch, Foltyn and other partners say, was something they hadn't encountered before. Foltyn describes an environment now where young people like Gorga expect to take a very hands-on approach to their charitable grassroots work. They may eventually take their money to the more established institutions, Foltyn says, but for right now, they're looking for ways to make an immediate impact, wherever that may be. "That's very different than it was even 10 years ago, let alone 40 or 50 years ago."

DELIBERATE, LITTLE STEPS

Mohiuddin, whose parents are from India, describes growing up with a father who was "impassioned by the marginalized person" and who preached the need to find meaning in life by helping others. The preaching worked, leading Mohiuddin to attend medical school and then search for a way to use his knowledge to impact the health of Detroit. As a resident at Detroit Medical Center's Sinai Grace Hospital, he would eventually become inspired by Brennan's innovative approaches to philanthropic work at United Way. Mohiuddin is now a director on United Way's board and the chairman of Leadership Next, a United Way local initiative that emphasizes meaningful relationships with the community and "leading and doing" over financial contributions.  

This is happening quietly at Sinai Grace, a hospital with its fair share of babies born into poverty who face a lack of access to the basic tools required for success. For example, research shows that a child living in poverty from birth hears about 30 million less words by age 3 — and that this deeply affects their literacy over a lifetime. To fix this problem, Mohiuddin leads a team of volunteers who meet mothers right after they give birth on the hospital's second floor in order to establish long-term relationships with them. Volunteers ask the mothers to promise to read to their children at least 15 minutes a day, and they give them resources like free books and access to programs to help them keep the promise.

"We tell these mothers, ‘Congratulations! Your baby is part of the class of 2030,' " says Mohiuddin, referring to United Way's Big Hairy Audacious Goal. "We know we're not going to reach this goal of a better society in Detroit if we're not starting right when a kid is born."

Mohiuddin says his active role with United Way has exposed him to a world not so much defined by the concept of big philanthropy, but by the very deliberate, little steps people can take to help improve someone else's experience, whether that's tomorrow or years from now.

"The number one thing I tell people is to know that they're needed, and to know you can make a difference," Mohiuddin says. "At the end of the day, we all want the same damn thing. We all want to kick ass."

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