Thanks to a few concerned individuals, Detroit seems to be experiencing an incredible groundswell of charity. It’s not nearly enough to cover the city’s $18 billion debt, but it’s a real start toward covering the city’s art and its well underfunded pensions.
It all began in November, when Judge Gerald Rosen (who’s been mediating the city’s bankruptcy case) met with philanthropic foundations, urging them donate. The first volunteer was biotechnology engineer A. Paul Schaap, who pledged $5 million to save the Detroit Institute of Art’s collection. On Monday, foundations like Ford, Kresge, and the Knight Foundation uncharacteristically followed suit with a combined $330 million pledge, (an amount $124 million short of Christie’s baseline estimate for DIA’s collection). This amount would be earmarked to cover the pension funds, which emergency manager Kevyn Orr estimates are underfunded by $3.5 billion. Christie’s estimates, drawn from valuations of roughly 5 percent of DIA’s total collection, ranged between $454 and $867 million.
Now, adding to the momentum, Michigan governor Rick Snyder has proposed a plan for the state to chip in an extra $350 million. (Snyder has previously expressed reservations, so it’s a surprise move). The deal would ensure that Detroit’s main cultural asset will be off the table for good, and DIA can transition from a city-funded museum to an independent nonprofit. The Detroit Free Press reports that Snyder proposed the deal to state lawmakers on Wednesday.
Still, the Freep’s editors think that’ll be a tough sell to state lawmakers who come from outside Detroit. Even if passed, it wouldn’t come close to covering the supposed $3.5 billion in pension funds.
Michigan lawmakers could change their tune, though, as the giving contagion grows. In news of the miraculous: CBS reports that Detroit’s courthouse has been receiving calls from individuals around the world, offering to donate. In response, the Community Foundation for Southeast Michigan has set up a public donate page promising to “support the pensions of retirees…by being used to acquire the art work and other properties of the Detroit Institute of Arts”. The Foundation’s Miriam Noland is stunned. “[T]hese contributions are coming from Maine, to Florida, to Oregon, Maryland, Scotland!,” she told CBS. “Don’t ask me how they learned about it.”
However the word’s spread, those donations will be critical for the future retiring pensioners. “Without a new source of revenue,” write the Freep’s editors “pensioners — like other unsecured creditors — are en route to a haircut”.