Sunday, May 17, 2009

$10M fund to help entrepreneurs create new companies

A recent article offers some food for thought concerning a group of foundations partnering together to support new ways to respond to the present economy:

The New Economy Initiative for Southeast Michigan and the Ewing Marion Kauffman Foundation are expected to announce Monday afternoon that they have formed a partnership to be based at TechTown to help spur entrepreneurship and create 400 new companies each year in Southeast Michigan.

On Thursday, the board of directors at the NEI, made up of 10 private, mostly Michigan-based foundations, approved the initiative and more than $9 million in funding to begin several economic development programs.

It is expected that TechTown, the technology park and business incubator affiliated with Wayne State University, will receive about $4.5 million of NEI’s second-round funding over three years to scale up its entrepreneurial support projects.

Shorebank, a Chicago-based bank that focuses on community development and has a branch in Detroit, will receive about $1.5 million to provide seed funding for new companies, and minority auto suppliers will receive about $3 million.

“Our programming is definitely coming to Detroit,” said Joy Torchia, director of communications for the Kansas City, Mo.-based Kauffman Foundation. “We’re coming because NEI has asked us to help with their initiative.”

With an endowment of nearly $2.1 billion, according to its Web site, the Kauffman Foundation is one of the 30 largest foundations in the U.S. and regarded as the world’s largest foundation devoted to entrepreneurship. It will become an 11th member in the New Economy Initiative, contributing expertise in entrepreneurial training. “Over the next three years, we are setting out to establish…new companies, and to do so we will utilize every resource — Wayne State, the Henry Ford Health System, Wayne County, the University of Michigan, Ann Arbor Spark, Michigan State and Automation Alley,” Randal Charlton, TechTown’s executive director, said on Friday.

“The details have yet to be worked out, but the building blocks are in place and the work starts tomorrow.”

Launched in 2007, the New Economy Initiative is funded by contributions from 10 local and national foundations: Detroit-based Community Foundation for Southeast Michigan, Southfield-based Max M. and Marjorie S. Fisher Foundation, New York-based Ford Foundation, Detroit-based Hudson-Webber Foundation, Battle Creek-based W.K. Kellogg Foundation, Miami-based John S. and James L. Knight Foundation, Troy-based Kresge Foundation, McGregor Fund in Detroit, Flint-based Charles Stewart Mott Foundation and Skillman Foundation in Detroit.

“I am absolutely delighted to see the Kauffman Foundation bringing their program on urban development to Detroit,” said Tom Anderson, a senior vice president at Troy-based Automation Alley, who was on a conference call Thursday afternoon when the NEI spelled out details to local economic development officials, including Mike Finney, president and CEO of Ann Arbor Spark and Turkia Mullin, Wayne County’s assistant county executive and chief development officer.

“It’s a wonderful thing NEI is doing, deciding to make this significant commitment of resources to transform the community through entrepreneurial resources,” said Finney. “It’s great they are basing it at TechTown. It puts it absolutely at ground zero."

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