Foundations commit more than $330m to save Detroit’s art
Philanthropic group will help pay off failing pension funds to keep the Detroit Institute of Arts' collection from the auction block
By Helen Stoilas. Web only
Published online: 13 January 2014
A team of federal mediators appointed to oversee Detroit’s bankruptcy case announced today 13 January that a group of philanthropic foundations have banded together to raise more than $330m to save the city’s art collection from being sold. The money will go towards covering an estimated $3.5bn shortfall in funding for city pensions. The plan is aimed to appeal to two contentious camps in the ongoing saga: those who want to spare the Detroit Institute of Arts from the city’s financial woes and those who think all of the city-owned assets, including the art, should be used to help the people affected by the bankruptcy.
“The proposal we’ve been working on has one overarching goal: to enable Detroit and its citizens to focus on the task of renewing this great American city. Intended to be part of a larger, agreed-upon plan of adjustment, this plan furthers that goal in two critical ways, by helping the city honour its commitments to its retirees and preserving an extraordinary community cultural asset, the Detroit Institute of Arts,” the foundations said in a statement. The group includes the Community Foundation for Southeast Michigan, William Davidson Foundation, Fred A. and Barbara M. Erb Family Foundation, Max M. and Marjorie S. Fisher Foundation, Ford Foundation, Hudson-Webber Foundation, Kresge Foundation, John S. and James L. Knight Foundation, McGregor Fund, and Charles Stewart Mott Foundation. Other foundations and private donors are expected to contribute, to bring the total money raised for the pensioners to $500m, a little over the minimum of the market value at which the city’s art collection has been appraised.
The mediators, led by the federal chief judge Gerald Rosen, emphasised in their statement that that “the foundations’ agreement to participate is specifically conditioned upon all of their funds being committed to the twin goals of helping the city’s recovery from bankruptcy by assisting the funding of the retirees’ pensions and preserving the DIA's art collection as part of an overall balanced settlement of disputes in the bankruptcy”. They added that “if these two goals can be accomplished, a third absolutely critical goal of facilitating the revitalisation of the city in the aftermath of the bankruptcy will also be greatly advanced”. For their part, the foundations stress that “our participation in this plan is not intended to be the totality of our investment in Detroit now or in the years to come, and it does not replace our existing philanthropic commitments”, but they hope the proposal will help complement other efforts in rebuilding Detroit.
In its statement, Detroit Institute of Arts said it “would like to commend all those involved on making significant progress in a very short time”. The museum, which is working with the mediators and the foundations, and has committed to providing fundraising support and programming to the effort, “encourages those who wish to support this effort financially to contribute to the Fund to Support Detroit‘s Retirees, Cultural Heritage and Revitalization by going to the Community Foundation for Southeast Michigan’s website at cfsem.org. Public support is welcome and deeply appreciated at this critical moment in the negotiations”.
The proposal, however, is just one small part of the negotiations in the largest municipal bankruptcy case in American history, estimated at $18bn of debt. The city’s workers would have to agree to take a cut to their pension funds, and Detroit’s other creditors may also demand some compensation.
The Emergency Manager Kevyn Orr, who has said all of the city’s assets will be considered in the bankruptcy settlement, including the art collection, said in a statement that he “welcomes Judge Rosen's efforts to find an additive way to monetise the city-owned art in a manner that helps the city restructure its debt and provide better essential services to is 700,000 residents.”
Donations to help support the campaign to save the DIA's art can be made online through the Community Foundation for Southeast Michigan, by clicking here
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