March 26, 2010; Detroit News | When do foundations step up to the plate for a community in crisis? Detroit-area foundations have fit that description for some decades now, but it is clear that they are stepping it up big by, as the Detroit News puts it, “deploying their combined clout of $30 billion in assets and decades of experience to build organizations, fund entrepreneurship and reshape the city and its schools.”

Watching Detroit’s foundations recently at work shows us what foundations can do and what might be beyond them. The term of art used by the foundation leaders there is “transformation,” not simply incremental change. Detroit is long past the latter. They know that what they do will have implications not just for Detroit and Southeastern Michigan, but as a model for foundations in other troubled cities.

How much can be expected of foundations and what can philanthropic largesse really achieve? The jury is out on the long term success of the Detroit foundations’ initiatives, but on paper they look powerful: The Skillman Foundation has organized a $200 million intervention in the Detroit schools (Excellent Schools Detroit); the Kresge Foundation is promoting a “creative corridor” between West Grand Boulevard and downtown Detroit; 10 foundations have invested $100 million in the New Economy Initiative designed to boost the regional economy; the entrepreneurship incubator TechTown at Wayne State University has $10 million from Kresge and now houses 170 start-up companies; Kresge is the largest funder of an effort to create a light rail system along Woodward Avenue; Kresge is also one of the lead funders in an effort to downsize and consolidate Detroit’s increasingly depopulated neighborhoods and will pay the salary of Toni Griffin, recently departed as director of planning in Newark, New Jersey, to come up with the plan for doing so; and the W.K. Kellogg Foundation and the Community Foundation are investing in a riverwalk along the Detroit River.

The city government is now led by Dave Bing, who succeeded Kwame Kilpatrick, who stumbled into serial opportunities for personal, political, and nonprofit corruption. Is the city government functioning? Or in the wake of Detroit’s long public sector paralysis of leadership, are the foundations becoming something of a shadow government, with the ability to focus attention on issues that they themselves are willing to support with their foundation grant dollars? That may be part of “the model of how to turn around a city and a region” that Skillman president Carol Goss refers to.

In cities with long histories of public sector dysfunction in the past—exemplified not just by Detroit, but by Camden, New Jersey and Bridgeport, Connecticut—will the foundations (a) step to the plate like the Detroit funders and (b) slide into a role, acknowledged or not, of supplanting local political decision making by the millions and billions they are willing to devote to specific issues and projects?—Rick Cohen