For many Alliance readers, the Charles Stewart Mott Foundation is probably best known for its civil society programme. But the Mott Foundation started life in 1926 funding only in its hometown – Flint, Michigan. It started funding nationally in the early 1960s, and outside the US in 1976. Since the recession, the focus on Flint has been stronger than ever. The cover of the 2008 annual report features a photo of downtown Flint and the title Trying times, trying harder. When I visited Flint in February, I talked to Mott president William S White about being a ‘hometown funder’.
My visit to Flint began with a tour of the snow-covered city. ‘This town is hurting,’ Bill White would tell me later. Evidence of that hurt was everywhere. Automotive industry jobs in the region have fallen from 80,000 to just 6,700, while the city’s population has dropped by 40 per cent, to around 110,000. Unemployment in Flint stands at almost 27 per cent. We drove past expanses of parkland once occupied by car factories. In many areas, most of the houses are boarded up. The city is now grappling with the process of ‘shrinking’, the idea being to abandon some areas altogether so that services do not have to be provided so widely.
But there is another side to Flint. It has outstanding hospitals, an abundance of educational institutions, and the largest cultural centre I have seen in such a small city, including a beautiful, spacious art gallery with a wonderful collection of Impressionist paintings. Opposite are the history museum, the music school, the youth theatre, the planetarium and the concert hall. This is the long-term legacy of automotive money, including investment by the Mott Foundation.
Staying true to the founder
Asked how he sees Mott’s role in Flint, Bill White goes back to the founder, Charles Stewart Mott, an original partner in the creation of General Motors in Flint in 1908. ‘From the very beginning we’ve had a special relationship with our hometown,’ he says. ‘This is where CS came and made his money. As GM became the dominant force in the city, he served three terms as mayor and became very active in the social sphere.’
C S Mott was aware that a lot of people coming into the city had little education, and the Mott Foundation stems from his solution to this problem: community schools. ‘Unlike his factories, which he would run 24/7 365, the public schools were only running about 7 hours a day, 5 days a week, for part of the year,’ says White. ‘He said, these are community-owned centres and they ought to be open to the public. Out of that, the foundation started funding all sorts of experiments, from reading and writing to sports, sewing, home economics − the whole kit and caboodle.’
The next step for the new foundation was higher education. Some of those using the community schools wanted to go on to college but they couldn’t afford to. Eventually they got the University of Michigan to open a branch campus in Flint. ‘In those days, if Flint said, we want it, they’d do it. Flint was the home of GM and at one time CS was the largest individual shareholder in GM. Flint had clout. CS made huge grants to the university and established the college here.’
But, says White, ‘CS had no interest in going outside the city of Flint. He didn’t feel he had the resources to do more. If others liked the programme, they could copy it – which is how the community school idea spread throughout the US.’
When Bill White first joined Mott as a consultant in 1968, C S Mott was still around and the foundation was still basically Flint focused. And Flint has remained a key grantmaking focus for the foundation through the years. ‘CS didn’t specify what we should do but he asked that we should be “mindful of the things I’m interested in” and we know he was interested in Flint.’
In the last couple of years the foundation has been directing any available resources back into Flint. In some cases, White admits, they’re doing what government ought to be doing. They contributed large amounts to the recent upgrading of the local airport, and to the regional park system. ‘We can’t sustain this, but we can give organizations a little time to do some fresh thinking about how to provide services.’
Renovating downtown Flint
A relatively fresh area of work is the renovation of downtown Flint, led by Bill White’s son Ridgway, who is a Mott programme officer. ‘It’s a simple concept,’ says Bill. ‘Seven or eight years ago, a group of seven local entrepreneurs, people who’ve lived here all their lives, agreed to each buy a derelict building and fix it up.’ To that, Ridgway adds: ‘It’s about investing in the human infrastructure. If you want to encourage companies to move here, and if there’s no particular strategic reason, it will be the little things, like having a nice church to go to, an institution of higher learning, a place to have dinner with your family, that will make the difference.’
This is a public/private partnership. Money has come from private investors, tax credits (state, local and federal) and the Mott Foundation. The private investors, says Bill, ‘have real money on the line. They’re not trying to make a return on these investments; they say jokingly, maybe my great-grandchildren will get some money out of them. It’s their way of giving back.’
So far, the project has completed around $35 million worth of investment, all mixed use. But it’s fragile, says Bill. ‘What we’ve done is just a small piece of the pie. Only about a third of the store fronts have been fixed up. We’re trying to do this in the midst of a lousy economy and it’s difficult to maintain momentum when no one has any money.’
The next project is converting a vacant 372-room hotel and conference centre into a student housing project. The first phase was completed in autumn 2009; the second and final phase should be completed by autumn 2010. This $28 million project is funded by a repayable Mott grant. ‘The scale and risk of investing was too great for anyone else,’ says Ridgway.
Opportunities for mission-related investment (MRI)
Here the conversation leads naturally to MRI. Foundations reluctant to engage in MRI often plead the difficulties of finding suitable investments. Surely being a hometown funder opens up great possibilities. Can you imagine taking this money out of assets, I ask. Here there is a generational difference. ‘I can imagine it!’ says Ridgway.
Bill explains: ‘We do MRI without doing it out of the investment portfolio. We’re classifying a lot of our investments downtown as repayable grants. We don’t expect a return on investment. If we get something back, we take it in as income.’ But, says his son, ‘going forward, that mindset could change.’
How is Mott different from a community foundation?
The biggest difference is scale: the Community Foundation of Greater Flint – which Mott was very instrumental in establishing and continues to support with sizable grants – might give $4 million or $5 million a year locally, whereas Mott has given tens of millions in Flint in the last couple of years. ‘Due to our size,’ says Bill White, ‘we can do things no one else can do.’
In practice, they both fund many of the same programmes. But the community foundation can make smaller grants more easily. If Mott wants to make small grants to community groups in Flint, it might well do so through the community foundation.
Community foundations generally involve the community more than a private foundation, Bill White points out. ‘The community foundation brings in a whole bunch of people and consults them and things like that. They go through more process.’
Relationship with the community
I imagined that the Mott Foundation might encounter criticisms from the local community that they’re not doing enough or doing the wrong things, but apparently not. ‘If we were to do a poll today, I don’t know if there’s any outfit that would come out better than we would,’ says Bill White. ‘When we screw up, that’s when the criticism happens.’
Do they get involved with difficult issues like city shrinking? ‘On that issue we do,’ he says. ‘We’ve given lots of grants for demolition. If the city’s going to shrink, we might as well get rid of dilapidated structures.’ But Mott’s biggest contribution here relates to developing the idea of a land bank, where you use some sort of metropolitan cooperation – in this case the county treasurer’s office – to bring foreclosed properties under its ownership and try to think of more productive ways of using the property than just selling it off in a foreclosure auction. ‘We funded early studies at the Hudson Institute on the idea of creating a land bank. It’s a national concept now. Every news organization in the country’s been here to look at it.’
But he is keen to stress the limits of what they can do. ‘We’re a big player in Flint but we’re not significant in the big scheme of things,’ he says. ‘We don’t have that much money compared to government – or individuals.’
For more information