Part I: Corporate Investment and Volunteering Help Fuel Detroit’s Renaissance

This is the first in a three-part series about how investment and volunteering are supporting Detroit’s urban renewal.

For much of the 20th century, Detroit was a vibrant and globally-recognized manufacturing capital, a major driver of the U.S. economy. Today, it’s fighting to change its image as a symbol of urban blight and America’s financial decline. What happened?

In short, Detroit ran out of jobs, then people, then money. Over the past 40 years, Detroit’s population declined significantly from a peak of 1.5 million in the 1970s to less than 700,000 in 2013, a net decline of 25 percent. This caused a similarly large drop in the city’s tax base, which has made funding city services virtually impossible. What’s more, an aging population continued to raise the city’s pension obligations to untenable levels.

By 2013, the city was at a critical juncture. In June of that year, Detroit filed for Chapter 9 bankruptcy, with estimated debts of more than $18 billion. Yet, despite these setbacks, the Motor City’s spirit of hard work and tenacity has never dimmed. Emerging from bankruptcy on December 11, 2014, Detroit prepared itself for a turnaround.

The remaining challenges are sizable. Twenty to 40 square miles of land, an area roughly the size of Manhattan or San Francisco, are totally abandoned. Nearly 80,000 buildings, or 30 percent of the city’s total stock, are empty. A study of Detroit’s blight found that the city will need as much as $850 million in investment just to address neighborhood blight in the next few years.

Addressing the abandoned and decrepit buildings across the city may cost as much as $850 million. Photos: Yves Marchand and Romain Meffre

Still, there are reasons to be hopeful. The city ranks 69th in population density among U.S. cities, ahead of Las Vegas, Denver, Phoenix and Portland, according to a National Geographic article. Fittingly, Detroit’s motto states the city’s determination, “We hope for better things; it will arise from the ashes.”

Post-bankruptcy, the city is focused on restoring its communities. The blight study laid out the way forward. “The challenge of capacity building,” its authors wrote, “presents an important opportunity for partners of all kinds to step up to the plate and support Detroit’s renewal. Private donors, in-kind contributions, and especially bank and corporate foundations engaged in workforce development opportunities should identify and support their part of the ramp-up effort.” In a city like Detroit, whose service infrastructure has been severely undermined by its economic decline, nonprofit organizations provide invaluable support for the city’s residents. Unfortunately, many charitable institutions in Detroit—and across the United States—struggle to acquire the expertise, data, and other resources they need to achieve their missions.

Corporations looking to invest in certain or strategic communities can help bridge this gap. JPMorgan Chase has led the way. In early 2014, JPMorgan Chase made a $100 million commitment to the city of Detroit. They coupled this financial investment with an investment of their human capital as well, in the form of the Detroit Service Corps. In November 2014, JPMorgan Chase sent their first team to partner with four local non-profit organizations addressing neighborhood redevelopment, workforce development, and non-profit effectiveness. The teams worked with Eastern Market, Focus: HOPE, Michigan Community Resources and Vanguard Community Development Corporation, to address key organizational challenges through financial feasibility studies, human resource process planning, and neighborhood development. The three-week, on-the-ground assignment broke new ground for skill-based pro bono service delivery in Detroit in which corporate employees are embedded within client organizations.

In May 2015, JPMorgan Chase prepared to send their second teams to Detroit. This time, the Detroit Service Corps will be partnering with a new set of organizations, but ones who are still grant recipients of Chase’s investment in Detroit. This unique formula is one in which the organizations are receiving funding, while at the same time receiving technical assistance focused on a separate organizational challenge. Other companies are following suit. In April, PepsiCo sent eight PepsiCorps participants to help two organizations that are working to provide affordable nutrition to the city’s most economically disadvantaged residents. Forgotten Harvest rescues nutritious, surplus and prepared food from over 455 food businesses, grocery stores, farms, warehouses, distributors, dairies, restaurants, caterers, and entertainment venues. Gleaners Community Food Bank distributes more than 95,000 meals each day through its partner network, and feeds and educates more than 250,000 children a year through nutrition awareness outreach programs. Both of these programs are not only sending employees from the United States but also from their international offices, thus bringing truly outside perspectives to the very unique challenges confronting Detroit-based non-profit institutions.

While PepsiCo and JPMorgan Chase’s employee engagement programs are different, their impact on the Detroit-based community organizations is positive and represents an approximate $300,000 of in-kind service contributions for the work being done this year. Through innovative investment of both human and financial resources, companies are contributing to Detroit’s renaissance, leaving behind the failures of the past and looking ahead to future possibilities.

Photo credit: Habitat for Humanity- Detroit
Eric Schroeder

Eric Schroeder

As a Key Client Manager at PYXERA Global, Eric works with senior leadership to implement corporate social responsibility programs for the private sector focused on engagement in emerging markets, leadership development, and responsible supply chain development. Eric’s professional interests include driving new market growth, creating opportunities for engagement across sectors and measuring the impact of these efforts. Eric has deep personal and professional experiences in experiential learning such as Outward Bound, study abroad, and Peace Corps. He has worked in the US, Chile, Peru, Colombia, and Guatemala, and is fluent in Spanish.

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