Editor’s note: Kresge and McGregor Fund foundations are philanthropic supporters of BridgeDetroit, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in BridgeDetroit’s journalism. See all of our funders here.

Mayor-elect Mary Sheffield is exploring partnerships with corporate and philanthropic groups to help realize her agenda for Detroit while federal cuts to social programs put further strain on vulnerable residents.

During the 2025 campaign, Sheffield and her opponent, Rev. Solomon Kinloch Jr., both said Detroit’s next mayor must strategically partner with foundations. While Kinloch argued philanthropic money was “being left on the table” for the right person to collect, Sheffield, who was elected last week with 77% of the electorate’s support, said she’s already secured commitments to fund specific investments. 

“I’ve got a lot of our corporate partners and philanthropic partners who are very eager to fill in as much as possible,” Sheffield said in an interview with BridgeDetroit ahead of the election. “Everyone knows that home repair grants have always been a priority for me, affordable housing as well. Education is going to be a big one that I’ll be championing as it relates to out-of-school time and afterschool programming. They are eager and ready to step in and to support.”

Sheffield’s mayoral transition process will be financed by civic institutions through a new fund established at the Community Foundation for Southeast Michigan. 

Philanthropic leaders told BridgeDetroit they expect to collaborate with the city’s next mayor, but can’t be relied on to substitute the massive level of federal support Detroit received to recover from COVID-19. The organizations are also facing increased pressure in response to federal funding cuts that will affect Detroit’s most vulnerable residents.   

Sheffield said the expiration of American Rescue Plan Act (ARPA) funding won’t create holes in Detroit’s budget because the dollars were intentionally used on one-time projects rather than replacing city revenue. But the loss of those ARPA programs will be noticeable, she said.

Detroit was given $827 million in federal funding from ARPA starting in 2021. The city used it to create 138 initiatives, including blight cleanup and demolition, legal aid for people facing eviction, paid workforce training and literacy courses, down payment assistance, home repair grants, community violence prevention and public recreation projects. All the dollars must be spent by the end of 2026. 

Rachel Decker, founder and president of the advisory firm Detroit Philanthropy, said expecting nonprofits to fully replace ARPA dollars is “wishful thinking.”

That’s mostly because it’s such a large sum of money, but also due to recent tax law changes under the federal One Big Beautiful Bill Act that removed incentives to charitable giving. Philanthropic donations from corporations are expected to decrease. Decker said she’s seen some projections showing charitable donations could drop by as much as $4.5 billion while demand for social services increases. 

“Philanthropy needs to decide, in light of the tsunami of budget cuts, if each of us is going to spend more than we did last year,” said McGregor Fund President Kate Levin Markel. “Otherwise, we’re taking away from something else we would have done. If we’re not putting extra money into the sector, are we really stepping up? There are so many things to fund.” 

Emergencies and aspirations 

A few notable investments in Detroit by large philanthropic groups have been announced as the city and state organize an emergency response. 

The Kresge Foundation recently announced plans to move its Troy headquarters to a new facility at the Marygrove Conservancy Campus and invest $180 million in the Livernois‑McNichols corridor. Around $50 million in future investments are planned to support property tax relief for homeowners near the campus and other projects to revitalize surrounding neighborhoods and business corridors. 

The McGregor Fund announced an “unprecedented decision” to double its spending rate for the next two years. It awarded $8.8 million to 33 nonprofits around metro Detroit in the first half of the year. The federal government requires foundations to spend 5% of its assets annually. The McGregor Fund committed to a 10% spending rate beginning last March. 

“That feels huge to us, and yet, U.S. Department of Housing and Urban Development cuts alone to the city are probably going to be in the hundreds of millions of dollars,” Markel said. “Private money is not going to make up for what’s being lost, but in our view, that is not a rationale for not doing more than we would in normal times.” 

Markel said spending decisions are driven by each foundation’s philosophy and structure. Some organizations were established to exist in perpetuity, while others are spending down all of their resources over a certain time frame. The bottom line, Markel said, is most funders in the area have not yet announced plans to increase spending. However, she said, some additional spending may be happening quietly.

Meanwhile, federal funding cuts and freezes are putting increased pressure on Michigan nonprofit organizations that rely on government support for critical services. U.S. Sen. Gary Peters highlighted the impact at a September forum hosted by Detroit Philanthropy.

“The amount of money that has not been released is a little over $400 billion, and so that’s a big shortfall for nonprofits who are trying to help the community,” Peters said. “If the federal government is not helping community members, who’s going to make up the difference?” 

The fate of a key federal food aid program, and the ability of state and local governments to support them, are in limbo pending an ongoing legal battle. 

The federal government shut down Oct. 1, causing lapses in funding for food assistance programs. The White House went to the Supreme Court to fight a lower court ruling that required SNAP benefits to be paid in November. 

Michigan had started issuing full November SNAP payments but stopped on Saturday. The Michigan Department of Health and Human Services directed the issuance of full SNAP benefits on Monday after a series of rulings from federal judges. 

The Trump White House also cut $1 billion of federal funding that helped schools and food banks purchase food from local farms. 

City funding is already being used to fill in the gap, but it’s not a permanent solution. 

Last week, outgoing Mayor Mike Duggan authorized $1.75 million for emergency food-aid contracts to help Detroiters affected by the federal government’s decision to pause SNAP benefits. It will support food pantries for two weeks, Duggan said. Roughly 37% of Detroit households rely on food stamps, according to the U.S Census Bureau.

“You’re going to see a pretty dramatic shift from a time when a lot of resources came into the community for us to recover from COVID and get the economy back on its feet, to get people back on their feet, that has been successful,” Peters said. “Now those resources aren’t going to be coming, and you’re actually seeing huge cuts coming from the current administration. The federal government is the place where you get the kind of scale necessary to deal with really big challenges we face as a country.” 

The shutdown was triggered by a political battle that hinges on preserving Medicaid funding and health insurance subsidies provided under the Affordable Care Act. Medicaid cuts would cause nearly 8 million people to lose insurance, according to Congressional Budget Office estimates. 

Democrats had refused to support temporary funding bills without protections for health subsidies and a restoration of Medicaid funding. Republicans argue the proposed cuts are necessary to rein in the growth of spending on entitlement programs. Seven Democratic senators voted on a step toward ending the shutdown on Sunday. 

Markel said radically shrinking the social safety net is a reflection of the Trump administration’s values.

“There’s not an easy answer in this moment, because the correct answer is: Funding the social safety net is the role of our federal government,” Markel said. “We will all come together as neighbors and as a community to get through this, but this cannot be the future and permanent state of how we support an adequate and reliable social safety net.”

Andrea Walker-Leidy, founder of Walker Publicity Consulting and a communications partner to numerous Michigan nonprofits, said service cuts will cause wide ripple effects. Someone who loses SNAP benefits might forgo a heating bill or medical expense to pay for food, she said. 

Walker-Leidy said inflation is making for tighter budgets, cutting into donations expected from corporate and individual donors while community needs are increasing. 

“Nonprofits are really the boots on the ground,” she said. “If the incoming mayor wants to know what’s going on, those are conversations that should be had.” 

Future of ARPA programs and targeted investments 

Sheffield will enter office a decade after Detroit exited bankruptcy. City officials say Detroit has since greatly improved its financial standing and is meeting its obligation to make pension payments.

In some cases, the city’s General Fund might provide resources to continue ARPA-funded projects. Sheffield secured a $2 million one-time appropriation in the 2025-26 city budget for the city’s home repair program. The Michigan Legislature allocated $2.7 million in public safety funding to continue Detroit’s ARPA-funded Community Violence Intervention program.

The fate of other programs is less clear. 

Steve Watson, a financial analyst who founded Watson & Yates in 2024 after serving as Detroit budget director and deputy CFO, said the city should work with philanthropies to sustain ARPA projects, but there’s not enough city funding to support many of them. 

“The city did not balance its recurring budget with the ARPA dollars,” he said in an August interview. “It was all for new investments, some things that the city might have just had to wait longer to do, like building new recreation facilities or as well as demolition, or things that the city might not have otherwise done.” 

“It means the city is going to have to come up with new strategies in order to pursue those things, and in some cases won’t be able to do as much.” 

Sheffield said philanthropies want to hear the mayor’s vision for what to focus on. Sheffield said she’s had conversations with philanthropic partners who are ready to help the next mayor supplement the “most impactful” city programs. She also plans to hire a chief growth officer to explore ways to generate new revenue.

Sheffield said Henry Ford Health has expressed interest in funding after-school activities for kids and home repair programs. Sheffield also proposed a “community anchor plan” where the city partners with longtime nonprofit organizations and church-based institutions to fund revitalization projects in targeted areas.

Kresge’s strategy in northwest Detroit is an example of place-based investments that are characteristic of nonprofit neighborhood revitalization efforts. The Kresge Foundation contributed funds to revitalize the Avenue of Fashion and provided $50 million to transform Marygrove into a cradle-to-career campus. 

“Why would we be located in a city where we wouldn’t invest?” CEO and President Rip Rapson told reporters in September. “In the last number of years, it’s become clear so much of our ability to have credibility in a city comes from being part of a city.”

Sheffield said she wants to expand the Strategic Neighborhood Fund, which was created through a partnership of the city and over a dozen philanthropic groups to concentrate investments in specific neighborhood corridors. Sheffield said the strategy has benefitted neighborhoods and should be brought into new parts of the city. 

The Strategic Neighborhood Fund (SNF) is administered by Invest Detroit, which raised $75 million from funders in the first two rounds. It leveraged $262 million in new investment, including renovated parks, new streetscapes, art installations, small business support plus new and rehabilitated housing projects. All of the SNF areas have multiple ARPA-funded projects within them. 

A $40 million fundraising campaign for the third phase was announced last year, with the Gilbert Family Foundation providing $15 million as lead funder. Vice President of Community Initiatives Darnell Adams said SNF investments are having a ripple effect on adjacent communities, priming a wider area of the city for reinvestment. 

“The goal of the program is to build strong enough nodes that these communities become bankable,” Adams said. “There’s a lot of Community Development Financial Institutions still lending in neighborhoods where bank capital really should be able to support business and development.”

Adams said the Gilbert Family Foundation is halfway through a commitment to invest $500 million over 10 years with the Rocket Community Fund. It started with a tax relief fund that stabilized housing for 12,000 families. Adams said the family foundation has sought to build programs other nonprofits can invest in like the Detroit Home Repair Fund, which helps residents access repair resources through a network of nonprofits. 

“Many hands make for light lifting, and I think that nonprofits play a critical role in helping to create stronger communities,” Adams said. 

“Detroit has great momentum right now, and it’ll be really hard to stall this engine at this point,” he added. “The next administration has a great opportunity to continue the momentum that we’re already seeing.”