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The Kalamazoo Billionaire Challenge Slow to Start

Ruth McCambridge
January 23, 2019
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January 22, 2019; MLive

There is something very attractive, as well as very worrisome, about the story of Kalamazoo’s Foundation for Excellence. The foundation was established in 2017 by a 5–2 vote of the Kalamazoo City Commission and was meant to create a half-billion-dollar foundation to replace a portion of its budget, retain a cut to its property tax, and fund programs to address poverty. Early in the process, firewalls were established between the foundation and the city to make sure the boundaries and responsibilities of each were clear—though, as we have seen, these agreements can go awry at times.

The foundation was established with two large donations totaling $70.3 million. That act of faith, which was documented in a letter of intent, came from two local billionaires and civic leaders, William Parfet and William Johnston, and it was to have led into a capital campaign to raise an additional $500 million by the end of 2019. So far, just short of $40,000 has been raised from local residents, and the original $70 million will have been spent by the end of this year on cutting property taxes, waylaying an income tax increase, and on community projects; this was, in fact, written into the original plan. The additional $500 million will allow the tax cut to last “in perpetuity.”

Parfet and Johnson have hired a Manhattan-based fundraising firm, which will start its work in March, but this certainly makes the campaign out of the ordinary in that the original challenge will have been largely committed to the here-and-now by then. Foundation for Excellence Coordinator Steven Brown now reports that Parfet and Johnston, who originally committed to hold themselves responsible for leading the capital campaign, have committed verbally to provide “interim funding” if the fundraising goal isn’t hit this year as planned. City Manager Jim Ritsema confirms that Parfet and Johnston made the commitment during “a regular update meeting” on fundraising.

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“I think the relationship of the donors to the city—which is generational, which is proven, which is unique—and the absolute thoroughness of the effort to make the checks and balances between the city and the donors and the foundation, and the efforts to make transparency the ultimate value first and foremost, those all speak to a relationship that is positive and solid as one can be,” Brown says. “Not everything can be documented on a piece of paper, not everything can be a contract.”

In the scale of endowments, $500 million is a huge sum.  But when you look to other local foundations, national foundations and some of the recent campaigns nationally, that have had this kind of visibility and visual appeal and unique profile, it’s an achievable number. There’s an enormous philanthropic streak in America and there’s a huge amount of money in the system right now because the market is so strong. I think it’s a fantastic time to be raising that type of money.

“The confidence is absolute,” Brown says. “Plan B exists in theory, but we’re moving ahead.” The pitch is to be developed by the end of February, and we will keep a close eye on the effort.—Ruth McCambridge

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About the author
Ruth McCambridge

Ruth is Editor Emerita of the Nonprofit Quarterly. Her background includes forty-five years of experience in nonprofits, primarily in organizations that mix grassroots community work with policy change. Beginning in the mid-1980s, Ruth spent a decade at the Boston Foundation, developing and implementing capacity building programs and advocating for grantmaking attention to constituent involvement.

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