Michigan’s Economic Roadmap
New recommendations are providing an economic blueprint intended to shape our state and lead it into the future. Governor Rick Snyder shared the new report from his Building the 21st Century Economy Commission last week at the Mackinac Policy Conference.
“Michigan has made an incredible comeback, but we can’t be complacent or content,” Snyder said. “In order to ensure our state’s long-term economic prosperity, we need a framework that will align us for ongoing success in the 21st Century economy.”
The commission’s main goal is to create prosperity for all. The commission's report provided recommendations on how to achieve that goal through cultivating and growing our talent, investing in infrastructure, increasing business competition and ensuring our communities are vibrant and inclusive.
There were five main data trends that helped the commission develop their recommendations:
Michigan’s shrinking and aging population.
Technological changes and how automation will change the future job market.
Accelerating urbanization: out of 400 cities with a million or more people none of them are in Michigan.
Increased competition in the global marketplace.
Environmental changes and resource scarcity: Michigan’s access to the world’s largest fresh water supply could lead to opportunities.
Highlights of the report’s recommendations include:
Lead in Talent
Accelerate post-secondary attainment through more early college programs and access to college credit earning programs.
Support universal access to community college and mentoring for at-risk students.
Equip all individuals with 21st century skills, at all levels of education.
Develop specific programs to transition local and out-of-state college graduates into the Michigan workforce.
Create skill-matching programs and platforms to connect businesses to people in professional trades.
Expand high-quality technical education in high schools to connect students to high-skilled trades and careers.
Grow our population by attracting and retaining talent from all countries and states.
Invest in Infrastructure
Develop new funding models for new and existing transit systems including bus and rail.
Focus on transportation that connects rural areas with markets.
Leverage and expand our international connectivity by using the Gordie Howe International Bridge and reconstructing the Soo Locks.
Build social infrastructure to remove barriers to success for individuals that includes access to affordable housing and access to high-quality and affordable childcare.
Create a Competitive Business Climate
Increase cross-sector collaboration to drive economic clusters, with a specific focus on mobility.
Create the policy frameworks that allow the state to encourage business growth.
Use regional, technology-enabled, customer-centric approaches to improve the experience of starting and growing a business.
Ensure a Good Quality of Life
Create thriving cities and communities to drive growth and anchor regions.
Ensure access to quality health care.
Support world-class arts and culture organizations as anchors in the communities through partnerships with businesses, foundations and other community stakeholders.
Make Michigan welcoming for all: Develop messaging that communicates Michigan is a welcoming home for immigrants and people from all cultures and backgrounds.
The report states that government actions alone can’t accomplish the work required to follow this blueprint. Instead it calls on cross-sector collaboration to propel Michigan towards greater success in the future.
CMF members have been working in several of the areas mentioned in the report: public transportation, affordable housing, breaking down barriers to high-quality and affordable childcare and linking Michiganders with paths to college and lifelong learning opportunities, to name a few. CMF will continue to support public-private partnerships that connect the work of philanthropy to advance these recommendations as appropriate.
What's next? There's no word on immediate next steps following the commission's report, Snyder said many of these goals are long-term and will hopefully serve as a roadmap for the next governor and for years to come.
The Home Ownership Gap
We’re getting a closer look at how our housing prices are increasing at a rate that’s nearly outpacing earnings. That’s the latest from a national index last week, and it’s trending with what we’re seeing in Michigan.
For anyone who’s bought or sold a home within the past couple of years you probably know there’s a surge of competition, with many homes getting dozens of offers, leading to bidding wars. The Detroit Free Press reports this kind of competition is often more favorable to individuals and families with "optimal financing" options rather than low-income individuals who may be using nontraditional financing methods.
With home prices rising faster than wages, fewer homes on the market and a need for housing in downtown urban areas, there's a growing gap for home ownership. How can we help close the gap?
In Detroit, the public got a chance to tour the city’s first tiny home community, to see how the small neighborhood may have a big impact on providing affordable housing to low-income individuals. The tiny home neighborhood, funded by the Ford Motor Company Fund and the McGregor Fund, led by Cass Community Social Services and volunteers, gives residents a chance to rent and own a new, safe and energy efficient house.
The tiny homes rent for $1 per square foot.
“The Cass tiny homes development is so much more than a house,” Rev. Faith Fowler, executive director, Cass Community Social Services said. “It is a novel anti-poverty program that will transform the residents and this neighborhood while it helps to protect the planet.”
The first residents have been selected for the neighborhood through an application process, with more tiny houses in the works.
Last week at the Mackinac Policy Conference, Detroit Mayor Mike Duggan said the city is setting aside affordable units and preserving buildings, with 3,000 homes renovated and sold through the Detroit Land Bank Authority.
Also in Detroit, the Ford Foundation is moving Kevin Ryan, a native Detroiter, to work on-the-ground as a program officer in the Motor City, focusing on mission-related investments (MRIs) to support affordable housing initiatives.
Through a new initiative, Investing for Impact: The Michigan Collaborative, CMF members are investing in affordable housing, targeted small business lending and civic infrastructure as mission-related investments in their endowment portfolios. The Michigan Collaborative, managed by Community Capital Management (CCM), provides foundations with the opportunity to invest in targeted fixed income investments in specific geographical areas in Michigan through CCM’s publicly traded mutual fund, the CRA Fund. You can learn more about the Michigan Collaborative in this week's impact investing article.
There's work happening around the state to try and connect families with affordable housing.
In West Michigan, Family Promise of Grand Rapids, a nonprofit supported by CMF members, offers connections to permanent housing for families who are at-risk of being homeless. Its Partners in Housing program renovates manufactured homes and turns them over to families to rent and eventually own, ensuring they have access to affordable housing.
Similiar issues in Ann Arbor have led to talks about the need for legislation that would allow cities to require affordable housing be implemented as part of new housing developments.
A bill is headed to the Michigan House that would allow the Michigan State Housing Development Authority (MSHDA) to develop a new refinancing program that would support low-income families and help them avoid foreclosure.
Last year, MSHDA invested more than $345 million in affordable housing efforts around the state.
CMF has been meeting with MSHDA officials to discuss philanthropy's role and opportunities to support affordable and attainable housing.
Collaborative Impact Investing Initiatives: Minnesota Credits Michigan
The Minnesota Council on Foundations (MCF) recently announced a first-of-its-kind in the nation impact investing collaborative that aligns even more of their members’ assets with mission.
The fixed-income bond fund investment opportunity focuses on affordable housing and small business lending throughout Minnesota. As Mission Investors Exchange shared, Susan Hammel, executive-in-residence for impact investing at MCF, credits CMF for inspiring the fund.
“Michigan has been an inspiration and generous in sharing what’s worked and what hasn’t – we’re tracking their work closely – hats off to Debbie McKeon of the Council of Michigan Foundations for sharing their experiences as they have built their ecosystem over the past four years,” Hammel said. “Sharing learnings are a big piece for moving forward, and we’re more than happy to pay it forward by telling others about our efforts.”
The fund was designed using counsel that CMF provided regarding its first efforts to support a similar product for Michigan but used a different type of investment vehicle.
Impact investing is evolving and gaining momentum as a tool to drive impact.
CMF members have been at the forefront of the practice, exploring different avenues to increase their impact in the communities they serve through use of more impact investing tools such as concessionary loans, guarantees and mission-related investments (MRIs)-investments targeted to create market rate returns in conjunction with social impact returns.
The CMF Impact Investing Committee responded to member concerns regarding the need for investment vehicles that could facilitate MRI investments in Michigan from endowed assets, a practice that is still emerging.
At the committee’s request the investment field responded and developed a specific investment product for Michigan. But many members considered the fund and indicated there were barriers to their participation. Though there were nine CMF members committed to invest in the fund, due to its design there was a $25 million minimum to launch it. This wasn't reached.
Through CMF’s commitment as a learning organization, those valuable lessons were shared with MCF to inform the design of Minnesota’s fund and the CMF Impact Investing Committee to enable CMF to provide new information to the investment field to rework and reshape its approach for Michigan.
Based upon the Minnesota model, Investing for Impact: The Michigan Collaborative addresses the concerns that CMF members shared regarding earlier efforts.
It is managed by Community Capital Management (CCM), and provides foundations with the opportunity to invest in targeted fixed income investments in affordable housing, small business lending and civic infrastructure in specific geographical areas in Michigan through CCM’s publicly traded mutual fund, the CRA Fund. CMF members may find more details here.
As recognition grows regarding different types of capital that foundations can provide to further their missions as well as focus increases on endowments in relation to tax reform, CMF is committed to supporting appropriate growth of the impact investing practice.
One tension point with MRIs is regarding measuring the social impact of an MRI investment.
CCM, as part of its role as investment manager for the Michigan Collaborative, has committed to work with the CMF Impact Investing Committee and Michigan Collaborative investors to support solutions to advance the systematic reporting of outcomes for the field.
Learn more about Investing for Impact: The Michigan Collaborative.
See what other CMF members are doing in our impact investing online video series.
Ann Arbor Area Community Foundation announces new $500,000 nonprofit loan program to drive impact
Content excerpted from a press release. Read the full release here.
The Ann Arbor Area Community Foundation (AAACF) recently announced the creation of a new $500,000 loan fund that will provide local nonprofits with access to capital.
The fund is made possible by Fran Loosen, who continues to direct family resources into a donor-advised fund at AAACF to support impact investing.
The community foundation wants to find additional ways to convert charitable capital and leverage the power of its $80 million endowment into local impact.
“We view nonprofit loan-making as an enhancement and supplement to our core grantmaking and scholarship work,” Neel Hajra, president and CEO of AAACF said.
As CMF shared in a series of online videos, AAACF successfully piloted a loan program with the Ann Arbor Art Center. The community foundation's investment helped the art center expand, leading to more programming for the community and a new space. The center's new space generated more income due to an increase in facility rentals, allowing the center to pay off the loan in three months.
“This nonprofit loan program in no way replaces banks and, in fact, AAACF sees this extension beyond its grantmaking as a way to potentially partner with financial institutions in order to advance the nonprofit sector,” Hajra said.