Turnaround Job: A Foundation Backs Inclusive Innovation in a "Transitioning" Region

Monument to Joe Louis in Detroit, "The Fist." Photo: Linda Parton/shutterstock — Monument to Joe Louis in Detroit, "The Fist." Photo: Linda Parton/shutterstock

It can be difficult for philanthropy, often based in wealthy coastal cities, to meaningfully address middle America’s ongoing economic plight. Since the 2016 election, as we’ve often observed, many funders have begun paying closer attention to those challenges. But the geographic disconnect remains.

That’s not to say, however, that funders based in those areas aren’t doing a great deal to close the gap. Boasting some of the nation’s best-known philanthropies, the Kellogg and Kresge foundations among them, the Midwest and the Great Lakes region is home to an increasing number of funder-backed economic initiatives.

Based in Detroit, the Ralph C. Wilson, Jr. Foundation is a relative newcomer to that circle. It only fully powered up in the past few years, after its namesake—the longtime owner of the Buffalo bills—died in 2014, and left most of his wealth to the foundation. Wilson also directed that the endowment be spent down within 20 years. Now, with its “responsibly aggressive” funding stance and plans to deploy a billion dollars by 2035, the Wilson Foundation has quickly become a philanthropic force to be reckoned with in southeast Michigan and western New York—a region long plagued by post-industrial decline.

As we've written often, this is tough terrain for philanthropy, given how powerful economic forces have conspired to undermine growth and opportunity here. But despite these long odds, the Wilson Foundation has thrown fully into the battle to turn around battered communities, betting that it can catalyze progress.

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While its geographic focus remains tight, this year, the Wilson Foundation is funding an interesting initiative that may just build ties between the so-called Rust Belt and the economically vibrant coasts. It’s called the Inclusive Innovation Challenge (IIC), and it’s the flagship program of MIT’s Initiative on the Digital Economy. Now in its third year, though only the first with support from the Wilson Foundation, the challenge awards $1 million in prizes to up-and-coming tech entrepreneurs who are reinventing, in a number of ways, the “future of work.”

For the first time, this year’s challenge is going global with semifinal rounds held in five regions: North America, Latin America, Europe, Africa and Asia. Twelve North American winners will convene in Detroit this September at an event the Wilson Foundation is funding. On that day, a panel of judges recruited by MIT will select four finalists to compete with the winners from each global region at a grand prize tournament in Cambridge, Massachusetts. Winners there get $250,000 each. The challenge is currently open to North American registrants through May 29.

According to Lavea Brachman, vice president of programs at the Wilson Foundation, backing the IIC’s North American regional event “will bring a lot of attention to Detroit as a place where innovation is happening. We also hope to use that to help spotlight the kind of inclusive innovation we’ve been supporting here.”

The challenge first got the foundation’s attention because it brings together two of Wilson’s key focus areas: workforce development and entrepreneurialism. With that in mind, the foundation made a successful pitch to bring this year’s Northern American event to Detroit. So far, the Wilson Foundation is the IIC’s only backer from the foundation world. A number of corporations have pitched in though, including Google, Accenture Digital, and the foreign firms Merck KGaA and Via Varejo.

Tech and the digital economy, according to Brachman, are promising paths forward for a region often portrayed as hopelessly wedded to old-model manufacturing. “This region is still a transitioning economy,” Brachman said. “These were blue-collar regions where productivity was defined differently than it is today. We need to become more tech-oriented, from economies based on hands-on manufacturing to advanced manufacturing, IT, healthcare, and the like.”

That doesn’t mean forsaking the region’s made-in-America heritage. Advanced manufacturing, much of it automated, relies on tech-savvy operators and engineers, a workforce that needs a lot more training than yesterday’s assembly line laborers. Up-skilling the region’s workforce has been a consistent priority for the Wilson Foundation. So has support for entrepreneurs and small businesses, including by extending financing options to Detroit’s entrepreneurs of color and backing entrepreneurship incubators like the New Economy Initiative.

The Wilson Foundation’s betting that new avenues for employment will lead to upward mobility for those who’ve been denied it. But Brachman is aware that “tech can be a double-edged sword. Its impact can be positive, but rewards tend to be concentrated in the upper echelons.” The IIC is an opportunity to “encourage entrepreneurs to think about how they’ll grow inclusively in areas including job creation, hiring practices, financial inclusion and technology access.”

That speaks to this funder’s market-oriented approach to sparking economic opportunity in America’s legacy cities. Philanthropy, says Brachman, can do well by “playing a catalytic role, where the market is not operating, but there’s potential for it to gear back up.” Whereas business needs to focus on the here and now, philanthropy “can make strategic investments to catalyze change, and can predict ahead to train workers for growth areas. So many people need skills, and the market alone may not take care of that.”

So far, I should note, the Wilson Foundation hasn’t significantly pursued policy advocacy to achieve its goals, though Brachman sees advantages to nonprofits pursuing that work. It’s still too early to tell whether cities like Detroit will really reemerge as centers of the digital economy, but efforts to boost job creation and “support the supporters” may at least nudge them in that direction.

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