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Wed June 29, 2011
Lessons learned: Automakers, arts groups and philanthropy
When the auto industry nearly collapsed a couple years ago, it had major ripple effect on the state’s arts and culture institutions. General Motors and Chrysler stopped contributing money to non-profit arts groups almost immediately. But now at least one of those auto companies is back in the giving game.
A look at how the ups and downs of the auto industry have affected Michigan's arts organizations.
The Detroit Three, aka the "Rocks of Gibraltar"
Up until a few years ago, it was hard to find an arts organization in southeast Michigan that didn’t rely on and receive generous amounts of money from the auto industry. We’re talking five or six-figure contributions.
Anne Parsons, president of the Detroit Symphony Orchestra, says for decades GM, Ford and Chrysler were the corporate giants of philanthropy:
ANNE PARSONS: "They had been the “Rocks of Gibraltar” if you will, certainly our corporate giving."
JENNIFER GUERRA: "...and now?"
ANNE PARSONS: "Well I think it’s very different. They’re absolutely engaged corporate leaders, but I certainly think the impulse to knock on the door of one of the auto giants to have your problems solved or challenges met, I think those days are over."
Auto philanthropy: then vs. now
Vivian Pickard is head of the General Motors Foundation, the charitable arm of GM. She says prior to bankruptcy, a lot of arts and culture organizations expected to get support from the 'Big Three':
"It was like they assumed every year there’d be an amount each one of these organizations would give in support of arts and culture."
Pickard says both sides realize those days are over. Pickard says there's less money in the Foundation's endowment (GM Corporation hasn't contribution to the endowment since 2001), which means the Foundation is more strategic about how it doles out money. They now focus their contributions in four areas: Education, Health and Human Services, Economic Empowerment, and Environment and Energy.
Same goes at the Ford Fund, the charitable arm of the Ford Motor Company. Jim Vella runs the Fund, and he says there's an added emphasis on whether or not the grant "meets a community need." Both Vella and Pickard say they've also moved away from "capital grants" for bricks and mortar projects that tend to be spread out over many years.
So how much did the automakers give before the auto crisis? Let's compare the numbers:
- Chrysler contributed $21 million in grants nationwide
- General Motors contributed $23 million in grants nationwide
- Ford contributed $49 million in grants nationwide*
- Chrysler contributed less than $1 million in grants nationwide
- General Motors hasn't released 2010 numbers, but Vivian Pickard says they contributed "under $11 million" in grants nationwide; GM contributed $8 million in grants nationwide in 2009.
- Ford contributed $29 million in grants nationwide*
*While Ford didn't go through bankruptcy, the automaker did scale back its contributions during that time. The Ford Fund also went from contributing to 925 organizations in 2008 to 530 organizations in 2010.
Diversity seems to be the name of the game now. No longer do Michigan's arts institutions rely so heavily on the auto industry for corporate support. Instead, several arts leaders are now reaching out to national corporations for contributions, and there's a big push to get more individuals to donate.
Rick Sperling is the founder of the nonprofit Mosaic Youth Theatre of Detroit. He believes the non-profit world learned an important lesson from the auto industry collapse:
"While the economic crisis hurt us, it also made us in the long run stronger organization, because it forced us to prepare for the next crisis. Because of that, we’re trying to make our funding portfolio more diverse [and] not planning programs on funds that haven’t been committed in writing; all the things that tripped up nonprofits in the past.
General Motors recently started to fund Mosaic again. The auto company contributed $75,000 to the nonprofit late last year.