Foundations to Reinvest in One of Nation’s Strongest Networks of Support for Entrepreneurs
Reports released today show for the first time the impact of the New Economy Initiative (NEI), the country’s largest philanthropy-led regional economic development initiative. NEI, a collaboration of 12 national and local foundations, has granted a total of $96.2 million to organizations and programs supporting entrepreneurs since it launched in 2007. According to analysis conducted by PricewaterhouseCoopers LLP (PwC) and the W.E. Upjohn Institute for Employment Research, NEI’s support has helped entrepreneurs and small businesses generate $2.9 billion in real economic output and create 17,490 jobs in southeast Michigan.
“Taken together, these studies show that entrepreneurs in Detroit and southeast Michigan are finally getting the support they need, and that is making a real impact on the regional economy,” said Pamela Lewis, director of NEI. “People of all kinds are embracing entrepreneurship as a means of creating opportunity and prosperity. There’s a great deal of work remaining, but Detroit is without question on the right path.”
The publication of the impact reports comes as NEI begins fundraising for its next phase. To date, NEI has secured commitments totaling $13.5 million from the Ford Foundation, the John S. and James L. Knight Foundation, the McGregor Fund, and the Ralph C. Wilson Jr. Foundation.
NEI has achieved this impact by making grants to organizations and programs supporting entrepreneurs of all kinds, from grass roots to high growth, creating a vast network of entrepreneurial support in southeast Michigan. The economic and employment impact reports by PwC and Upjohn Institute analyzed years of information reported to NEI by grantees via quarterly reports, as well as interviews with regional entrepreneurs. Findings include:
- 4,400 companies directly serviced by NEI grantees through 2015
- 179,571 attendees of events in metro Detroit’s entrepreneurial network
- More than 1 million square feet of entrepreneurial space activated
- $232 million in additional program dollars matched by NEI grantees
- $1.9 billion in real gross domestic product generated by NEI-supported companies
- $2.9 billion in real output generated by NEI-supported companies
- 17,490 jobs created by NEI-supported companies, 70% of which are located in Wayne County.
“In less than a decade, the New Economy Initiative has become a critical catalyst in the revival of Detroit and a model for other U.S. cities to pursue,” said Bruce Katz, centennial scholar at the Brookings Institution and founding director of the Metropolitan Policy Program. “The creation of a consortium of foundations has not only helped pool large amounts of philanthropic capital, but has also provided a vehicle for collective impact. NEI is a case of the whole being greater than the sum of its parts.”
“NEI is having an impact by leveraging the region’s entrepreneurial energy,” said Alberto Ibargüen, president of the Knight Foundation, an NEI funder. “Building an economy that’s diverse and open to all will ensure that impact grows and endures.”
The research of PwC and Upjohn Institute underscores in particular the success of philanthropy’s efforts to increase social equity and inclusion in the southeast Michigan’s economy. Nearly 40% of all companies supported by NEI since 2009 are minority-owned, double the national average. Moreover, NEI has helped to increase the number of business support organizations and programs in the region from fewer than 10 in 2007 to more than 50 today. And almost two-thirds of local entrepreneurs surveyed say that the level of support for starting and growing a business has increased in the last five years.
NEI has received support from 12 national and local foundations: the C.S. Mott Foundation (Flint, MI), the Community Foundation for Southeast Michigan (Detroit), the Ford Foundation (New York), the Hudson-Webber Foundation (Detroit), the John S. and James L. Knight Foundation (Miami), the Kresge Foundation (Troy, Michigan), the Max M. and Marjorie S. Fisher Foundation (Southfield, Michigan), the McGregor Fund (Detroit), the Skillman Foundation (Detroit), the Surdna Foundation (New York), the W.K. Kellogg Foundation (Battle Creek, Michigan), and the William Davidson Foundation (Troy, Michigan).
“NEI’s impact findings are a testament to the collective power of philanthropy to create meaningful change in communities,” said Lewis.
“NEI rightfully recognizes that entrepreneurship isn’t the exclusive domain of the privileged. We believe in the power of inclusion and know that when opportunities are made available across communities, entrepreneurship can be a powerful means of addressing inequality,” said Darren Walker, president of the Ford Foundation, an NEI funder.
NEI’s work through 2020 will seek to achieve three broad goals: (1) to further develop an inclusive culture of economic development in southeast Michigan, making the region a welcoming place for all; (2) to equip successors to take ownership of the entrepreneurial support network in order to serve metro Detroit for decades to come; and (3) to inspire others through compelling storytelling.
“Now is not the time to declare mission accomplished; now is the time to maximize the impact of this initiative and ensure that the foundation of support for entrepreneurs that has been built is sustained and strengthened,” added Lewis. “Just as the city helped to create America’s middle class, Detroit is showing once again that it can be a model for the nation – and for philanthropy.”
For more information on NEI’s impact, and to read the official economic and employment impact reports authored by PwC and Upjohn Institute, visit www.neweconomyinitiative.org/impact.