Opportunity Zones Unveiled in MI to Spur Economic Development
The U.S. Department of Treasury and the IRS recently announced the federal government has approved Opportunity Zones in 18 states, including Michigan.
As CMF reported last month, Governor Rick Snyder asked the federal government to designate 288 census tracts, (which is the maximum number of tracts that qualify in Michigan), as official Opportunity Zones. All 288 recommended census tracts in Michigan have received approval and are now official Opportunity Zones. Here’s the full list of the Michigan census tracts included in the zones.
Opportunity Zones, created through the recent tax reform legislation, are designed to incentivize investments in low-income communities or areas directly adjacent to one or more low-income communities.
“These zones have the potential to help Michiganders take advantage of the full economic development potential in all corners of the state,” Snyder said. “This is a unique opportunity for investors and promising news for eligible communities.”
Opportunity Zones retain their designation for 10 years.
As for investors, they can defer tax on any prior capital gains until no later than December 31, 2026, as long as the gain is reinvested in an Opportunity Fund, an investment vehicle organized to make investments in Opportunity Zones.
The Michigan State Housing Development Authority (MSHDA) shared in a press release that “the preferential tax treatment is connected to the longevity of an investor’s stake in a qualified Opportunity Fund and provides the most upside to those who hold their investment for 10 years or more.”
MSHDA said the Opportunity Fund can be used as a primary investment in a variety of activities, such as creating a new business, new commercial or residential real estate or infrastructure. They also can be used to invest in existing businesses if it doubles the investment basis over 30 months.
MSHDA’s executive director Earl Poleski said it’s an exciting economic development tool for Michigan, noting what Opportunity Funds could mean for affordable housing in some communities.
“The benefits can be combined with other incentives such as New Market Tax Credits (NMTC), Low-Income Housing Tax Credit (LIHTC) and historic rehabilitation tax credit, adding a valuable tool for economic and community development,” Poleski said.
"We are hearing excitement from the philanthropic sector about the potential for catalyzing investment in low-income communities,” Jennifer Oertel, CMF’s impact investing expert-in-residence said. “I am hopeful for the opportunity to expose traditional investors to impact investing and to dispel the myth that investors must sacrifice financial return in order to create social impact. However, those who care about low-income communities and the people who reside there are also concerned that this initiative, which will provide significant tax breaks for wealthy investors, be utilized to truly help those in need."
Opportunity Zones were discussed at Mission Investors Exchange’s (MIE) conference last week in Chicago, both as a potential tool to invest in underserved communities as well as shining a light on concerns emerging from the philanthropic sector.
Last week MIE shared a blog post from Enterprise, a nonprofit focused on affordable housing, which states in part, “Our partners on the ground – in urban, rural and all other types of communities – have shared concerns that this private capital may cause unintended negative outcomes for the very people they are seeking to help. In particular, there is a fear that local residents and businesses could be displaced if Opportunity Zone investments cause property values and costs of living to rise.”
Earlier this year, Rip Rapson, president and CEO of The Kresge Foundation wrote a blog about such concerns with Opportunity Zones.
“The broad language in the legislation leaves it in the hands of the investor – with no oversight from states – to determine whether investments meet community needs,” Rapson wrote. “This is a significant and important moment for community development champions to define what the future of this program should be.”
Rapson provided recommendations on how the zones should utilize equitable principles of investing in low-income communities.
"We heard at the Mission Investors Exchange conference about the huge potential of foundations being catalysts to deep and meaningful work in communities," Melanie Audette, senior vice president, MIE, told CMF. "This includes not only being informed about Opportunity Zones, but leading by bringing their expertise and network to the people and communities they serve and support. Community foundations in particular are especially well situated to play a role deep in community as conveners and intermediaries for those wishing to coordinate their own efforts in place. The network is particularly important as dollars begin to flow, keeping the impact in impact investing is a mantra for many of our members."
As for next steps, MSHDA said that those who are interested in investing in the Opportunity Zones will need to apply to the U.S. Department of Treasury to establish an Opportunity Fund.
The state is awaiting further guidance from the department on how that process will work.
Check out the FAQs about Opportunity Zones.
View the full list of Michigan Opportunity Zones.
Check out Mission Investors Exchange’s resources on Opportunity Zones.
The 2018 Mackinac Policy Conference: Mobility, Trust and a Prepared Michigan
Next week, roughly 1,700 leaders in philanthropy, business, politics, media and education will gather to discuss the future of our state at the Mackinac Island Policy Conference.
This year’s conference takes place May 29 – June 1 and focuses on three pillars:
Is Michigan Prepared? Ensure Michigan’s competitiveness for major business investment by protecting the existing business climate and addressing issues preventing sustained prosperity for all.
The Mobility Disruption: Strengthen Michigan’s readiness for the disruption that next generation mobility will create for industry and society.
Trust: Restore confidence in the critical institutions of government, media and business to build trust in society.
Michigan philanthropy will be well represented throughout the conference, with several CMF members serving as thought leaders and sharing their insights on economic opportunities and challenges, education, equity and the role of our communities in Michigan's future success.
Tonya Allen, president and CEO, The Skillman Foundation will moderate a panel on preparing Michigan students for the future of work (May 30) and she is sitting on a panel to join in discussion on challenges and opportunities for Michigan’s future growth (May 31).
Carolyn Cassin, president and CEO, Michigan Women Forward and La June Montgomery Tabron, president and CEO, W.K. Kellogg Foundation are both panelists for “The Women’s Wave: Breaking the Silence” a session on gender parity at the C-suite level and practices that support inclusion and equality in the workplace (May 31).
Dave Egner, president and CEO, Ralph C. Wilson, Jr. Foundation will serve as moderator for a panel on aligning Michigan’s industry and workforce needs (May 30).
Rip Rapson, president and CEO, The Kresge Foundation is moderating the session “Making the Suburban Case for Regional Transit” (May 31).
Ridgway White, president, Charles Stewart Mott Foundation will introduce and host a session on the impact of disinvestment in Michigan cities (May 30).
Governor Rick Snyder plans to discuss how Michigan has evolved over the past seven years during a session on May 30. His keynote address the following day will share insights on sustaining Michigan’s momentum against the backdrop of the conference pillars.
This year’s event features a gubernatorial bipartisan debate hosted by The Detroit Regional Chamber Political Action Committee. Three candidates each from the Republican and Democratic parties are slated to participate.
Nearly 20 CMF members are sponsors of conference sessions and special events.
If you can’t make it to the island, you can follow the action online and Detroit Public Television’s MiWeek is slated to provide live and recorded coverage of conference events.
Check out the full agenda.
Follow the Detroit Chamber on Twitter for up-to-date information from the conference.
Tune into Detroit Public Television’s MiWeek for conference coverage.
Survey Explores College-Going Culture of MI Adults
In partnership with the Institute for Public Policy and Social Research at Michigan State University and their State of the State Survey (SOSS) series, the Michigan College Access Network (MCAN) has released new data focused on our college-going culture.
Three questions were asked of 954 individuals across all regions of the state who were surveyed by phone between April 2017 and July 2017. MCAN has asked these specific three questions in four of the SOSS polls administered over the last six years.
For a young person in Michigan to be successful in the labor market and in their career, how important is it to have a college education?
How likely is it that your child will get a college education?
At today's levels of tuition and financial aid, a college education is reasonably affordable for people in Michigan. [The question rated agreement with this statement.]
The data shows 56.6 percent of Michiganders believe college is very important, a 14.5 percent decline from 2015 results at which time 71.1 percent called college very important (of 966 respondents). For 2017, 33.8 percent of respondents said they believe college is somewhat important compared to 24.7% two years prior.
Perspectives on the question of whether Michigan adults believe their child will get a college education and college affordability have changed less dramatically.
74.6 percent of survey takers said it was very likely their child would get a college education and 17.5 percent said it was somewhat likely, compared to 79 percent and 14.1 percent in 2015, respectively.
39.6 percent strongly disagreed, and 33 percent somewhat disagreed, with the statement that a college education is reasonably affordable for people in Michigan at today’s levels of tuition and financial aid. Two years prior, those numbers were respectively 39.7 percent and 30 percent.
*Statewide data has been weighted to provide a representative sampling, both geographically and demographically, of the state of Michigan.
In late 2008, CMF and a group of community foundations partnered with the state of Michigan, the National College Access Network and the Johnson Center for Philanthropy to analyze college-access services in Michigan. As a result of that research and the collective efforts of the Governor’s Office of the Foundation Liaison (OFL) among several other organizations and agencies, MCAN was officially launched to dramatically increase college participation and completion rates particularly among Michigan’s low-income students, first-generation students and students of color.
Over the course of the next nine years, The Kresge Foundation provided a series of grants to CMF that were sub-granted to 27 community foundations to initiate, expand, strengthen and sustain their local education partnerships, which led to the creation of Local College Access Networks (LCANs) in their communities.
LCANs are community-based college access alliances supported by a team of community and education leaders representing K-12, higher education, the nonprofit sector, government, business and philanthropy. LCANs organize community leaders around the goal of increasing the community’s postsecondary educational attainment level to 60 percent by the year 2025.
American Community Survey data from 2016 shows that in Michigan, 43.7 percent of the state’s 5.2 million working-age adults ages 25-64 hold a high-quality certificate or degree. While that puts Michigan below the national average of 46.9 percent, it is an increase from American Community Survey data collected in 2013, at which time 38.4 percent held at least a two-year degree.
Many CMF members are providing support when it comes to post-secondary education and through a variety of ways.
Six years ago, the Fremont Area Community Foundation launched the Goal 2025 Education Initiative, a targeted effort through grantmaking to increase post-secondary attainment.
“We have seen a positive cultural shift toward college and career attainment,” Amy Moore, director of community investment for the community foundation, told CMF. “The Newaygo County Area Promise Zone is in year two and is reporting growth in retention rates and we have seen an increase in our adult scholarship applications.”
Recently the foundation turned its efforts toward the youngest students in the county by launching the Kickstart to Career child savings account program, a ten-year pilot program. This fall, every child in Newaygo County will be given an account and will participate in financial literacy and career planning during the school day.
“The program is designed to build aspirations, encourage savings, increase financial education and assist with career preparation, training and college expenses,” Moore said. “Similar savings accounts across the nation have shown students in these programs show an increase in college enrollment and degree attainment. It is just one more strategy to improve the quality of life for our residents.”
Another example of education supports in action comes from the Bay Area Community Foundation, which has three major areas of their work that specifically aim to further education for current students K-12 and in college, as well as those needing a skilled trade or certificate and individuals earning their GED.
The Great Lakes Bay College and Career Resource Center assists students of all ages and backgrounds through supports such as college application assistance, financial aid resources, scholarships and career planning.
The foundation’s scholarship program, which started with one $300 award in 1985, has grown to 501 scholarships valued at $500 million dollars this year. An annual reception allows donors of the scholarships to meet their recipients.
The Bay Commitment Scholarship is a unique program in that only first-generation college students are eligible to apply. The May 2018 scholarship award ceremony celebrated ten years of program success, during which time 1,000 students have been given scholarships totaling $2 million.
Renee Aumock, senior program officer for the Bay Area Community Foundation, oversees each of these efforts. “There is so much more to success than just the scholarship money. We encourage all students to get a higher education and give them the resources to do just that. Continuing education benefits the person, the vibrancy of the area’s business economy and the quality of life for all area citizens.”
Aumock notes that over 65 percent of Delta College graduates and over 45 percent of Saginaw Valley State University graduates remain in the Great Lakes Bay Region. “Our community’s next generation of leaders are the students attending college today. It is essential that support is provided for these future leaders to equip them with the skills to take our community forward.”
Download the full survey report with statewide and regional data.
Learn more about the Fremont Area Community Foundation’s efforts.
Learn more about the Bay Area Community Foundation's efforts.
Connect with MCAN.
Professional Development Spotlight: Call for Mentors and Mentees for CMF Mentoring Program
The program, which spans a six-month period, is designed to advance the leadership of a diverse network of rising professionals in the philanthropic sector, though individuals serving as mentors often say they find the experience equally rewarding.
"I know that I’m the mentor, but I have gained insights and inspiration from the mentees as well as the coaches,” shares CMF mentor Dr. Angela Graham, program director for partnerships, The John F. Fetzer Institute. “Part of what attracted me to this opportunity was the prospect of engaging with and learning from others."
CMF mentor Martha Gonzalez-Cortes, vice president, community investment, Kalamazoo Community Foundation, agrees. “My mentee has been a joy to work with! I think we have both benefited professionally from the tools shared by the CMF team and fabulous consultants during our statewide webinars and group meetings.” She also says the mentoring program has also provided her with tools and resources she can use in her work. “I have had the opportunity to expand my own professional network in the interaction with our cohort.”
The consultants and trainers who support the mentoring program with CMF staff lead professional and personal development learning on topics ranging from emotional intelligence and balancing home-work life to developing a personal brand and identifying leadership skills. Mentees also connect with an executive coach.
“Meeting with an executive coach was extremely valuable,” Richerd Winton, grants management associate, William Davidson Foundation and CMF mentee, notes. “Our conversations about my communication style assessment enabled me to have a toolkit of new skills I could use the very next day. She provided me with new strategies to approach work in more efficient and effective ways.”
Winton also cites his mentor Meredith Freeman, senior program officer, Max M. and Marjorie S. Fisher Foundation, in supporting his success. “Our conversations significantly enhanced my approach to career planning and helped me to refine my interests within the field of philanthropy.”
In addition to one-on-one meetings between mentors and mentees, the program includes both in-person peer learning and sessions conducted via webinar for the entire cohort.
"The 'return on investment' far outweighs the time commitment," Graham says. “From the quality of the materials shared to the interactions with the other participants, it’s a positive and inspiring experience.”
Gonzalez-Cortes and her mentee, Vanessa Miller, development and special events manager, Detroit Historical Society, planned their virtual and in-person meeting dates in advance to ensure they would have sufficient quality time together. “I have enjoyed every minute of our interaction both by phone and in person.”
Miller is one of several nonprofit leaders to join the CMF Mentoring Program over the last several years, supporting the pipeline of talented individuals coming into the sector.
Graham remarks that she has high hopes for the future after working with her mentee Jessica Hill Riggs, program specialist, University of Michigan Center for Middle Eastern and North African Studies. “I’ve been impressed with Jessica and all of the mentees. I am thrilled to see the talent that is being developed and that is serving, and will continue to serve, the field.”
There is no cost for CMF members to participate in the mentoring program. Nonprofit professionals, in addition to philanthropic professionals who are eligible for CMF membership, can participate for a fee. Applications are welcomed through July 31. Space is limited. Notification of acceptance in the next cohort will be provided in August 2018 and an orientation webinar will be scheduled for November 2018.
CMF is committed to expanding diversity, equity and inclusion (DEI) within the philanthropic sector. The CMF Mentoring Program is one way we help support the advancement and leadership of a diverse group of professionals working in the field.
Download the mentoring program overview.