Detroit Nonprofits Feel Pain of GM Bankruptcy
Detroit Nonprofits Feel Pain of GM Bankruptcy
Already reeling from the recession, Detroit nonprofits are about to take another hit from the bankruptcy of General Motors, the Detroit Free Press reports.
The GM Foundation, which fulfilled its 2008 commitments and a few early requests this year, is in limbo, with no 2009 budget or immediate plan for resuming its charitable giving. Funded entirely by the corporation, the foundation has no endowment and has not determined which organizations it will be able to support going forward. In 2007, the foundation awarded more than $31 million globally, including nearly $12 million to Michigan-based organizations working in the areas of arts and culture, social services, education, and health care.
Area arts groups have been hit especially hard. Late last year, the company cut more than $1 million in anticipated 2009 funding to about a dozen local arts groups, including the Detroit Symphony Orchestra, the Music Hall performing arts center, and the Detroit Institute of Arts.
Although companies in bankruptcy are not prohibited from making charitable gifts, the pressure to cut costs at GM is enormous and the company is likely to keep a tight rein on all spending, including philanthropy, said Don Grimes, an economist at the University of Michigan. While Grimes wouldn't predict whether the federal government would pressure the company in regard to giving, he did say that "Somebody could make a case that there might be sufficient goodwill generated by some philanthropy to justify it."
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