Community foundations partner on small-town development

Around Michigan, community foundations are adding their might and money to help spur development in small towns.

Two blighted buildings in the Thumb’s Bad Axe will get a makeover courtesy of the Huron County Community Foundation, and the entrance to downtown will get new life.

One the west side, in Oceana County, the Community Foundation has helped fund an agricultural research center, open day cares and now is involved in a major park project.

The Fremont Area Community Foundation is usingimpact” investing to make a difference in the western Michigan counties of Newaygo, Lake, Osceola and Mecosta.

In southern Michigan, the Lenawee Community Foundation partnered with a not-for-profit health care organization to establish the ProMedica Adrian Ebeid Neighborhood Promise, a $20 million rural place-based investment over 10 years dedicated to scaling and implementing solutions to address health disparities in east Adrian.

These are among efforts being supported and pushed by community foundations in Michigan, which have traditionally focused on grant making and other nonprofit support. This is a way, however, to have a tangible impact on the communities they serve – to put their money where their mouths are.

“A community foundation’s mission is to support and grow the community, ensuring towns and cities within their service area provide a vibrant and thriving place for all residents to live, work and play, as it is key to their mission,” said Kyle Caldwell, president and CEO of the Council of Michigan Foundations (CMF). 

“Michigan community foundations by design are vital partners in local economic development efforts — providing strategic resources to attract and align public and private sector resources. Advancing community and economic development efforts is not new for many community foundations, in fact, it has been a keen focus for those serving rural communities,” Caldwell said.

In Oceana County, the ball got rolling with community assessments done through a cohort project with CMF and the Community Economic Development Association of Michigan.

“Economic development is a growing area for community foundations,” said Tammy Carey, chief executive officer of the Community Foundation for Oceana County. “There are some restrictions with IRS rules, but we’ve learned to be impactful within these restraints. It’s our willingness, our understanding and our desire to also be involved with economic development projects that have high impact or high need.”

Collaboration helped bring the West Michigan Research Station, opened in 2021 in Hart, to life. While the project is for and largely led by the region’s growers, it became a community effort. It was spurred by a major gift from an anonymous donor and then brought the rest of the way by a collaboration of business, farms, government, philanthropy and individual donors, Carey said.

“It’s a huge new asset,” she said. “Probably over $50,000 of grant dollars came out of our foundation to support a variety of projects with that research station.

“It was the vision of a small group of people who saw it as an opportunity to expand our communities’ presence and knowledge on how to be the best agriculturally producing place in Michigan or the world. It put Oceana County on the map agriculturally.”

The foundation also partnered to help two new day care businesses open in Oceana County; they are different models, with private and public ownership, Carey said. But they were able to get up and running in record time.

“It was interesting to see how quickly those came about. Sometimes in the nonprofit world things don’t move as fast,” she said.

A major project happening now is a $5 million Shelby Township Community Park, on Buchanan Road, near 72nd Avenue, along the Hart-Montague rail trail in Shelby Township.

And this summer, the Community Foundation for Oceana County will launch a workforce development program called Complete Your Degree. It’s designed to support adult learners who have no or some college and to help them achieve degrees and prepare for in-demand jobs.

The program will provide needs-based scholarships, which will cover the full cost of tuition at a local community college. Additional supports for child care, transportation, housing and other needs are included. The foundation will fund a success coach to walk alongside students and provide extra support.

“The program was pioneered by the St. Clair community foundation and caught our eye,“ Carey said. “Around 23 percent of our adult population has some college but no degree … it seemed like a ripe area for people to have more opportunities and for the companies.”

There will be five people in the first cohort. “We’re starting small moving into the new program but I know it’s going to grow,” Carey said. 

“One of the things that community foundations do and we do it too … in addition to endowments and donor-advised funds, we hold development funds. They’re used to support a nonprofit or community that’s doing a project.”

In addition to the Shelby Township Community Park, which is in the middle fundraising stage, there are others in the works: expansion of the Pentwater Historical Society Museum, renovation at the Oceana County Fair Grounds, a Pentwater-Hart Trail, extending the Hart-Montague Trail to Pentwater. “We hold the project funds for all of these great projects, acting as the fiscal sponsor,” Carey said.

“A very important role is that of connector — connecting nonprofits to resources or funding, connecting municipalities, connecting donors to projects.”

Coworking and housing in Bad Axe

In Bad Axe, the Huron County Community Foundation’s Community Hub Project will transform two parcels at M-53 and M-142 into co-working space and housing. It will change the entrance to the community.

In 2018, the Huron County Community Foundation did a large strategic priority project – interviews, focus groups, a digital survey — looking at the challenges and opportunities. It revealed three main priority areas: retaining and attracting talent; developing vibrant communities and creating an environment for business development, said Mackenzie Price, the foundation’s executive director.

“Using that framework, we started looking at ways to do more tangible investment in our community,” Price said. “We have always shared office space – generous community partners allowed us to be great stewards of the community. But we never had space uniquely our own.

“We put together the ideas in our strategic priorities as well as our recognition that we were at a point in our organization’s lifespan that we needed our own space.”
They were looking for office space that would add community assets. That led HCCF to the main stoplight in Bad Axe.

“It’s one of the most heavily trafficked corners in Huron County,” Price said. “It’s the main drag for vacationers, anyone coming up for business, anyone coming up to visit family — they’re driving through this intersection.”

Two buildings on the northwest corner of M-53 and M-142 were vacant and blighted.

“There’s a lot of great things that are happening up here, but unfortunately people coming up here and stopping at that light sends a message that Huron County is closed down,” Price said.

The opportunity was not without its challenges. The foundation learned that one of those buildings was a gas station in a former life — so the property is contaminated. In addition, the properties had two separate owners on a site where one couldn’t be developed without the other. Still, HCCF purchased both lots on that corner.

HCCF received a sizable grant of around $600,000 from the Michigan Department of Environment, Great Lakes, and Energy (EGLE)  and worked with local brownfield authority. Around May or June of this year, demolition and remediation will begin. One of the buildings will be demolished and the second partially demolished.

Renovation will take place during the winter months and ideally the grand opening will be in 2023.

The plans for the renovated building are twofold: The first floor will house the community foundation  offices for the first time in its 20-plus-year history. It will include a community board room. The second floor will be converted into four apartments.

The foundation plans to work with local businesses to have corporate leases on the apartment units. The lack of housing has impacted many companies’ hiring and retention efforts, Price said, even the local health care systems.

“We recognize we aren’t going to fix the entirety of the workforce housing issue,” Price said. “We hope to create a model to prove to others there is a market for this, that it’s beneficial to them and to the community.”

The reuse of the parcels will also create parking and green space downtown. Price described a vision of outdoor space and outdoor art bringing vibrancy back to the downtown and “make it somewhere where people want to go to the bakery down the street, sit outside, grab a sandwich from the coffee shop and hang out.

“Our goal really is to retain and attract talent and be able to brighten up that corner and send a better message when people are driving through – to show there is investment here, opportunities here.”

The project cost is estimated at $1.8 million, and HCCF has commitments for $1.2 million, including the funding from EGLE. HCCF approved its first foray into impact investing, using endowment dollars and a capital campaign.

“There’s a unique solution and perspective that folks who live and work in rural communities employ,” Price said. “We have the same challenges our urban counterparts have but often not the same resources or networks. We have to get a little bit more creative.”

Impact investing in West Michigan

The Fremont Area Community Foundation is using impact investing to support downtown redevelopment. Impact investments are those made to companies, organizations, and funds to generate social or environmental impact alongside a financial return.
“Fremont has dipped its toe in the water with impact investing. And we're really delighted to be in that space,” said Shelly Kasprzycki, president and CEO of the Fremont Area Community Foundation. “It has been, we think, an excellent tool to add to the work that we're doing in order to really help build the economy and create jobs and opportunities for the residents here in Newaygo County.”

The foundation’s impact investing involves low-interest loans and partnerships with nonprofit organizations and the business community. It leverages the power of endowed assets beyond grant making through Program Related Investments (PRIs) and use of Impact Investing tools.

Some of the Program Related Investments include:
  • TrueNorth Center for Nonprofit Housing: gap financing for new construction, affordable rental housing. A nonprofit developer leveraged funding with low income housing tax credits and other grant funds. 
  • Newaygo County purchased new 911 dispatch equipment. Source of repayment is a special assessment.
  • Newaygo County Historical Center: a bridge loan for building renovations.  Source of repayment is a capital campaign (donors and other grants).
  • Northern Initiatives: revolving loan fund for small business. Source of repayment is loan portfolio interest income and loan fees. This program has recently been expanded to four counties in the service area (Newaygo, Lake, Osceola, and Mecosta). Funds can be used for start-up, business expansion, and for expenses related to the pandemic. 
“We have set aside $25 million of our entire corpus to potentially be able to invest and take on some of the risks for these organizations and allow them some opportunity to grow and expand or to shore up the work that they're doing,” Kasprzycki said. “The actual other leverage streams come from some of the government – federal, state and local — sources and then we're able to partner in that fashion, as well as private business revenue.

“So generally speaking, the way that it works, we're looking to be able to fund projects that have measurable community impact and financial return. We want to be able to see that they have some ability to gain; it's not just a loan that will become a grant, if you will.”

Moving forward, Kasprzycki said, is to help the community with some of its challenges. Housing, transportation and broadband connectivity top that list. 

“I think that the great benefit to community and economic development work for a community foundation is to really solidify that position as a key partner within communities, not only with charitable giving, but also as a viable entity, through partnerships to strengthen a thriving economy,” Kasprzycki said. “And for that, for just being able to use different tools and be able to move ahead with that, you're going to see citizens have more job opportunities, you're going to see poverty reduced. And that is an important facet to add to the work we do with our nonprofit community, and in education, so I see them working in tandem. And that's really critical.”
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