Foundation Support Is Crucial in Plan to Save Detroit’s Art and Pensions

A federal bankruptcy judge (last week) approved a financial reorganization plan for Detroit that relies on nearly a half-billion dollars in philanthropic support to shore up the city’s pension system, protect its world-class art museum, and help lift the city from insolvency. As Detroit emerges from what is America’s largest municipal bankruptcy, some big names in philanthropy will now put their dollars to work in unprecedented fashion — providing a cash infusion to a government pension system. Ten foundations — including the national giants Ford and the John S. and James L. Knight foundations — are moving forward on their pledges to contribute $366-million over 20 years to an $816-million fund that will help the city pay the pensions of its workers and retirees.

The museum itself, the Detroit Institute of Arts, will pay $100-million to that fund—money it has raised in less than a year from a host of sources, including the J. Paul Getty Trust, the Andrew W. Mellon Foundation, several local family foundations, the Big Three automakers, various Michigan companies, and individual donors. Altogether, support from foundations and museum donors will total $466-million, with the state’s contribution covering the remaining $350-million to be paid to the city pension system over the 20-year life of the deal.