Detroit’s bankruptcy has Skillman Foundation rethinking investments

For more than five decades, the Skillman Foundation has focused on improving the future for Detroit’s children and their families. Since its creation in 1960 by Rose Skillman, the widow of a Detroit manufacturing executive, the endowment has grown to become one of Michigan’s most influential philanthropies. Awarding grants of roughly $75 million since 2005, Skillman’s Good Neighborhoods initiative in six Detroit communities, is the centerpiece of its long-range investment in the city.

New president and CEO, Tonya Allen, wants to funnel $100 million into struggling city neighborhoods like Brightmoor, Cody-Rouge and Osborn through 2016. Allen rose to the top job last year following the retirement of longtime president Carol Goss. She shared with Bridge about the challenges she’ll face in the first full year of her new role, working with a new mayor and with bankruptcy proceedings still unfolding in Detroit.

Bridge: What role does Skillman play in the community, and has it changed, in light of Detroit’s bankruptcy, given Skillman’s collaborations with city agencies?

Tonya Allen: Our mission is still the same and we’re going to still have a tremendous commitment to the city of Detroit and its children. However, the bankruptcy does make us rethink some of our investments, in terms of whether they’re the right investments and whether they’re sustainable. It will influence the way we approach some of our strategies.

Bridge: Is there one, or more than one, particular initiative or area of investment that’s up in the air, pending the outcome of the financial restructuring?

Allen: No, I don’t think there’s anything that’s up in the air. I think there are some strategic shifts that we’ll have to make relative to the outcome. For example, related to Mayor Duggan, who spoke a lot about putting resources into the neighborhoods, in the plan of adjustment there are going to be some areas related to revitalization outside of downtown and Midtown that will have some impact on how our policy will influence neighborhoods. Skillman makes huge investments in neighborhoods, so we want to make sure that our dollars are not in conflict with what the mayor’s doing. We don’t have to be lock-step, but we don’t want to be in conflict.

Bridge: What’s the focus and status of Good Neighborhoods as you near the 10-year mark for its implementation?

Allen: How do we mobilize around supporting people getting ready to graduate from high school, and then getting ready for work? Getting ready for college? Getting ready for life? These are a lot of our current questions. One of the things that is compelling about our investment in neighborhoods is that it’s attracting other people who are local and who are national, who view these neighborhoods as sustainable.

These neighborhoods are now attracting all kinds of investment. The money that Skillman provided was a catalyst for it, but now these neighborhoods can attract investment without Skillman. For example, Brightmoor. A lot of people, including the previous mayor, expressed that it was a neighborhood that should just disappear when, actually, it’s one of the most innovative neighborhoods, in terms of dealing with blight, in terms of entrepreneurship. It’s an interesting place where we’re seeing things that we’re not seeing in other neighborhoods, because the citizens have been working together. The energy and momentum are there in ways that we’re not seeing in other parts of the city.

Bridge: What local, state or federal policies would you most like to see impacted through Skillman’s philanthropy?

Allen: We definitely would like to see the state and the federal government help these legacy cities, like Detroit and Flint, to address blight in a systemic way, in order to help revitalize neighborhoods. Our previous policy, which has been practiced by the state, has been more about taking buildings down, which can be a part of the strategy, but we’d like to see it implemented in a way that also gives the cities what they need, not just removing buildings.

A lot of times, these federal policies are so rigid that they do things in other parts of the country that don’t really address our local condition. The other one would be public safety, not just in terms of interaction with police officers, but prevention status in helping to identify young people who might be more likely to commit crimes and giving them resources that would aid in prevention.

The third one is schools. Michigan has some of the most lax policy around public schools and charter schools in the country, and this sort of aggregated authorizing environment (of granting charters to operate schools). We have so many people who are creating schools, but it’s a marketplace that’s not regulated. So, in my opinion, it’s not improving schools; it’s weakening schools. There’s supply, not enough demand, and the focus is on enrollment, not academics.

Bridge: You’re a native Detroiter. How does it feel to have this new opportunity to lead an organization that can impact change in the city where you grew up?

Allen: I’m super-excited, as you can imagine, for a couple of reasons – one, because it is my hometown and I want it to be prosperous. And the second reason is because Detroit is at a crossroads now. We’re, essentially, re-engineering our city, and we’re not just re-engineering for today, we’re re-engineering for the future. But I also feel a strong responsibility to make sure that we include people and churches and businesses, and that it’s not just this kind of oligarchic approach where only the richest and the smartest are included. I want to make sure the process is one that includes the many and not just the few.

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Comments

Adaj Parr
Wed, 02/05/2014 - 9:59pm
I was not expecting this kind of response. I am hopeful based on Tonya Allen's comments. I would like to see the investors who have purchase property for penny's on the dollar be aware, this is not an investment flip or turnover to increase the value just to make money, the investors have an obligation to be part of the rebuilding of the city and the neighborhood by talking with people like Tonya Allen. Mike Duggan, I am sad to said in not an example of progressive in the city.
Charles Richards
Thu, 02/06/2014 - 3:05pm
An investor only captures five or six percent of the value they create; the rest flows to the community through "consumers surplus" Would this individual prefer a small addition of value created by altruism to a large addition of value created by an investor who reaped a substantial return on investment? Which do they think is a more reliable producer of benefit to the community?
jbm
Thu, 02/06/2014 - 9:24am
congratulations to Tonya Allen a true Detroit unsung hero.
Charles Richards
Thu, 02/06/2014 - 3:38pm
Ms. Allen says, " We have so many people who are creating schools, but it’s a marketplace that’s not regulated. So, in my opinion, it’s not improving schools; it’s weakening schools. There’s supply, not enough demand, and the focus is on enrollment, not academics." Education has traditionally been a public monopoly and thus never "regulated." So, why are Detroit schools so bad? How could such terrible schools be weakened? She correctly notes that there is "not enough demand." Isn't that the problem? Perhaps there isn't enough demand for a highly rigorous education that provides the ability to think critically. The parents who wanted their children to learn to work hard in pursuit of a good education have long since fled the Detroit school system. Perhaps the answer for the remaining parents is a charter school that will supply that quality education. If some public schools are closed as a result of parents choosing a better school, isn't that a good thing? "Public" is by no means necessarily superior to "private."
Scott Roelofs
Fri, 02/07/2014 - 2:13pm
Thank you Mr. Richards for your comments. If any private enterprise performed as badly as the Detroit Public Schools it would have been out of business long ago. Now, there is a mindset that public schools are sacred (in a secular sense!), and cannot "go out of business." According to the MI Dept of Education MI School Data report of 08/30/2013, testing performance at almost every level and subject by Detroit students was far below state averages. To be fair, the schools are not totally responsible for the dismal results; there has certainly been breakdown of the social fabric in Detroit. And the DPS are under new management and trying hard to turn the situation around. But the answer is not to prevent new charter schools and private schools. When the public schools have a monopoly, there seems to be little push for them to improve. Ms. Allen seems to loathe these new schools which are a challenge to the status-quo, mediocre education environment in many cities. I would like to see her embrace excellence wherever it is found...public, public-charter, or private schools, and find ways for her foundation to help expand education opportunities for Detroit students, not decrease them.