In 2007, 10 foundations came together and put together a $100 million fund. The New Economic Initiative recapitalized in 2014 with an additional $33.5 million. They have investments in non-profits and companies that can employ others.
The NEI has served grants to 4,400 client companies. It has helped develop 1,600 new companies; 40 of those companies were created by people of color and about one-third of them by women. Pamela Lewis is director of the New Economic Initiative.
“We focus on what we say are startups to bent-ups or grassroots to high-growth, because we feel like those two worlds have to reinforce each other ... It focuses on those existing businesses that have been around three years or more in the communities that need that extra help and those connections,” Lewis said.
This year is the third and final year of the NEIdeas challenge. Businesses in Detroit, Hamtramck and Highland Park can apply to receive either $10,000 or $100,000, depending on their revenue. The application requires only 400 words. Over the past two years, NEIdeas has given over $1 million to 64 businesses.
“It’s not about the prize. It’s about the connections,” Lewis says.
J & P Pallets and Trucking won $100,000 from the competition. It took that money to expand its capacity and facility, and bought pallets it can package and ship across the country, Lewis says.
The company leveraged the money to receive another $100,000 from the Motor City Match program, which the mayor is leading, and become part of the Detroit-to-Detroit business spending program that NEI funds.
Lewis thinks this initiative could be replicated in other distressed cities across Michigan. "If you have communities that have high poverty rates ... you could put together a program where you're giving some type of small business challenge to these types of businesses within your community," she says.
Listen to the full segment to hear Lewis's ideas.