Keeping the Lights on in Detroit

  • Public-Policy Reform
  • 2014

Detroit may be America’s most ill-governed, and saddest, city. That’s the public’s verdict: The city’s population plummeted from 1.9 million in 1950 to just 680,000 in 2014, just after Detroit filed the nation’s largest-ever municipal bankruptcy, estimating that it was $20 billion in debt.

Private philanthropies have tried for years to stanch the worst of Detroit’s bleeding. The only streetlights that work in midtown are the ones paid for by the Hudson-Webber Foundation. In 2013, the Kresge Foundation and some partners donated 100 police cars to the city (where the average response time to a 911 call is 58 minutes). These and other donors poured at least $628 million into the city between 2007 and 2011, particularly hoping to soften life for children and other innocent victims of the misgovernance, and to spark a bit of private-sector economic activity.

Then in late 2014, a coalition of 15 foundations—both local and national—plus some corporate and individual donors pledged $466 million to shore up the city’s insolvent pension system and transfer the Detroit Institute of Arts from city to nonprofit ownership, so that its great works and building wouldn’t have to be sold for cash. This philanthropic help was the key to negotiation of a grand bargain of concessions, cuts, and contributions that allowed the city to emerge from bankruptcy. Whether Detroit will ever become a healthy community again remains to be seen, but the donors who had been protecting city residents for decades at least gave the city and the state breathing space to create more responsible and sustainable public policies.