10 Years of Impact in Detroit: How Three Nonprofits Have Evolved to Strengthen Communities April 28, 2024

Ten years ago, the City of Detroit was less than a year removed from the largest municipal bankruptcy filing in U.S. history and working through a laborious process to restructure more than $18 billion in debt held by 100,000+ creditors. To say that the future of the city was uncertain is an understatement. Despite this, local nonprofits continued to provide essential, community-strengthening services, while Detroit’s philanthropic community stepped up to bridge significant funding gaps while helping to lift the city from insolvency.   

Though 16 Community Development Financial Institutions (CDFIs) were serving Detroit at the time, there was still extraordinary need for additional lenders prepared to invest in mission-driven organizations committed to building the city’s future – particularly outside of the downtown and midtown areas. So, too, was there significant need for the non-appraisal-based real estate loans that IFF has offered since its inception. Historic redlining, uncertain municipal finances and the corresponding deterioration of services, leery capital markets, twin foreclosure and property tax crises, and blight contributed to a perfect storm of plummeting property values when the city most needed catalytic capital to stabilize the situation and spark Detroit’s revival.  

With most lenders relying on property values as the cornerstone of the underwriting process, the presence of a lender like IFF that was both willing and able to provide flexible capital to nonprofits based primarily on their ability to repay the loan was essential. Recognizing this, The W.K. Kellogg, Kresge, and Skillman Foundations provided IFF with the funding and relationship-building support needed to expand into Detroit and begin supporting community changemakers intent on creating a path to inclusive growth.  

In January 2014, IFF opened an office in the city, began offering real estate services to nonprofits, and quickly provided its first loan to a local nonprofit. By the end of the year, almost $8.8 million in financing had been disbursed, laying the foundation for continued investment in Detroit. To date, that has included:  

• 104 loans totaling nearly $100 million provided to 57 organizations;   
• $8 million in New Markets Tax Credit allocations;   
• Real estate support for 117 facilities projects undertaken by 78 nonprofits;   
• Two development projects completed – including the Marygrove Early Education Center – with six more currently in the pipeline;   
• Three research studies focused on strengthening educational opportunities for Detroit’s children;   
• The launch of programs like Learning Spaces to improve the quality of early childhood education facilities, which has provided more than $3.4 million to 52 child care providers for facility improvements, extensive collaboration with partners through Hope Starts Here, and more.   

Much has changed in Detroit during that time, with the city frequently praised today for the revitalization of the local economy and reimagination of the downtown area. Less publicized, but just as important, has been the work that has occurred in neighborhoods that experienced decades of disinvestment and neglect. Propelling that forward are hundreds of nonprofits standing shoulder to shoulder with community members to realize a vision for the future in which all Detroiters have the opportunity to thrive.   

As we celebrate IFF’s first 10 years in Detroit, we’re shining a light on three of the first organizations that received loans from IFF – all of which have grown and evolved in remarkable ways to contribute to stronger, more vibrant communities.   

Detroit Achievement Academy

In 2014, Detroit Achievement Academy (DAA) was a little-known, year-old public charter school committed to providing world-class education through an expeditionary learning model focused on developing and nurturing the whole child. The brainchild of Kyle Smitley, DAA’s founder, the school was serving 44 students in kindergarten and first grade while operating in an unused section of a church in the Grandmont Rosedale neighborhood in northwest Detroit. Smitley founded DAA with a desire to create a school that not only would have a big impact on students, but also create a ripple effect of positive change in the community.   

DAA’s growth began in earnest when the school used a $17,250 loan from IFF – the first we provided in Michigan – to purchase furniture, computers, and other technology needed to enrich students’ academic experience. This important step helped DAA establish credit history that would become essential to its growth. Several months later, the school entered into a land contract with a seller to acquire its own facility, but an exorbitant interest rate limited the school’s financial flexibility.  

A second loan from IFF in 2015 for $876,000 refinanced that high-cost debt and provided DAA with close to $250,000 to renovate its new facility in line with Smitley’s vision for a high-quality educational environment that would fit into any affluent community in the country. By acquiring and renovating the facility, DAA increased its enrollment capacity to 360 students while adding one new grade level per year to achieve its goal of serving K-8 students. 

“Space communicates to the people who use the building what their value is, how loved they are, and what they’re worthy of,” says Smitley. “You know when you are in a well-designed place that is typically reserved for the affluent, and our kids deserved that.”

In 2017, Smitley began working on expanding the educational model established at DAA to the east side of Detroit with the acquisition of a school that had been abandoned for a decade. Though the 43,500-square-foot, 100-year-old facility was structurally sound, it required extensive renovations to serve as a functional place for learning. IFF provided a $2.75 million loan and allocated approximately $6 million in New Markets Tax Credits that helped transform the building into Detroit Prep, a public charter school with the capacity to serve up to 500 K-8 students. Featured in Architectural Digest for the innovative nature of the renovation, Detroit Prep has contributed to a renaissance in the Pingree Park neighborhood. 

“I would never be so bold as to say that it’s a cause and effect because of Detroit Prep, but the school was named by U.S. News and World Report as the number one elementary school in the city, and that’s an important anchor in the neighborhood,” says Smitley. “We’ve heard from many of the school’s neighbors how much they appreciate the care that went into eliminating a blighted property and returning it to a condition where it’s a community asset.” 

With Detroit Prep completed, Smitley’s next project was a 30,000-square-foot addition to the DAA facility. The project – which IFF supported with a $5 million loan – added two new classrooms for each grade level and increased the school’s enrollment capacity to 500 students to address a growing waiting list. The project also created shared learning spaces that included a makerspace, science lab, and media center, in addition to extra space for art, music, and other enrichment activities. And, in keeping with DAA’s commitment to the community, the space was designed with local residents and organizations in mind.

“The school is laid out so that we can close certain doors and have a completely secure building that can be opened to the community, and we host nonprofits like Birth Detroit and neighborhood association meetings all the time,” explains Smitley. “The goal was to design a building that would meet the school’s needs but also serve as an asset to our broader neighborhood. It’s a beautiful facility that took a lot of work to complete, and we want to help other organizations that don’t have the capacity yet to create something like this get to that point by making the space available for their work too.” 

With two high-performing, financially sustainable schools launched in the past decade and an annual budget that has grown from $500,000 a decade ago to more than $10 million today, Smitley’s attention is now shifting to how to deepen the positive impact created by both schools. Among her goals are to establish a half-acre farm at DAA to support experiential learning and increasing the quality of meals provided to students by purchasing food from local, Black-owned farms and preparing it on-site at each school. 

“I get asked frequently about the next step for us, and I think a lot of people expect me to transition to something new,” says Smitley. “But this is the work that interests me, and I’m really excited to have gotten to a point where every day isn’t being spent having to overcome challenges. It’s a really beautiful privilege to now be able to look at the big picture and focus energy and resources on making both schools the very best that they can be for students, their families, and the communities they serve.”

Wellspring

Founded in 1986, Wellspring is a faith-based youth development organization that serves the Brightmoor neighborhood in northwest Detroit by building long-lasting relationships with young people to facilitate spiritual, social, academic, and economic growth. The nonprofit accomplishes this through Kumon-based tutoring, recreation and community service opportunities, a teen discipleship group, a teen leadership council, adventure-based leadership, and college readiness programming and support, among other examples. 

Wellspring’s roots in Brightmoor extend back to the early 1980s, when Co-Founder/Co-Director Dan Bandrowski began volunteering in the neighborhood as a college student. Bandrowski was hired as an outreach worker by his church after graduating, moved to the neighborhood, and devoted himself to building relationships along with his wife, Cherie, who also serves as Wellspring’s co-founder and co-director. As white flight occurred in Brightmoor, followed closely by disinvestment, the Bandrowskis doubled down on their work to help young people in the community become self-sufficient adults.    

By 2014, Wellspring was serving roughly 100 youth per year in a former single-family home converted in the late 1980s by the Bandrowskis and fellow co-founders Marc and Jane Averil into offices and program space. With just 1,834 square feet of space, the nonprofit could not expand its programs as its waiting list continued to grow. Although hesitant to take on debt to expand, Wellspring decided that the need for more young people to access its services outweighed the risk of borrowing and used a $60,000 loan from IFF to supplement a capital campaign. With IFF’s Real Estate Solutions team serving as the owner’s representative, these funds were used to build an addition that more than tripled Wellspring’s square footage and ensured that the organization could remain in the facility for years to come.  

“We laid roots down in this community in the early 1980s before Wellspring existed and made a commitment to long-term involvement and investment in Brightmoor, and there was a strategic decision made to focus on providing young people with the foundation needed to succeed in all facets of life,” says Dan Bandrowski. “Expanding our facility obviously allowed us to reach more kids, and it also reaffirmed our rootedness in the neighborhood where we’d been able to build long-term relationships and trust.” 

With the additional space, Wellspring was able to eliminate its waiting list as the nonprofit’s capacity increased to 300 young people served per year. Continuing to grow, however, the organization pursued several opportunities to further expand its space in the following years – including acquiring houses on each side of the facility and three adjacent lots since converted to outdoor recreational space.  

To determine how best to leverage the properties to achieve its growth goals, Wellspring again engaged IFF’s Real Estate Solutions team to assess the feasibility of several development scenarios. After thoroughly exploring its options, the nonprofit settled on a plan to renovate one of the adjacent houses and to connect it to the organization’s existing facility to create a single connected structure with roughly 12,000 square feet of space for programming. With an annual budget of roughly $700,000 – more than double what it was in 2014 – Wellspring is now well on its way to executing the project and anticipates being able to serve approximately 700 young people per year, many of which are the third or fourth generations of families who have benefited from Wellspring’s commitment to Brightmoor.  

“At this point, we’re working with the grandchildren of students who came to Wellspring early in our history, which speaks to the length of time we’ve been in this neighborhood doing this work,” says Bandrowski. “Those types of long-term relationships translate into trust and, when you have that, you can play a role in people’s lives that wouldn’t be possible otherwise. This community has changed a lot over the years, and we’re seeing now the folks who have been here for decades leading the way in the development of the community’s next chapter; working side by side with newer arrivals to advance the neighborhood’s goals.” 

Detroit Hispanic Development Corporation

Fed up with children dying from violence in her community in southwest Detroit, Angela Reyes founded Detroit Hispanic Development Corporation (DHDC) in 1997 in her living room and focused first on one pressing task: successfully negotiating a truce between rival gangs to reduce the level of violence in the community. From there, DHDC began arranging sustainable jobs for former gang members to provide pathways to safer, more stable lives. By 2001, the nonprofit human services agency had grown in size and scope, and the organization leased space in a 28,000-square-foot facility in the Corktown neighborhood before purchasing the entire building in 2008 to serve as a multi-service community center dedicated to serving the area’s large Latino population.  

Months later, when the Great Recession began, DHDC lost half of its funding and was forced to recalibrate its operations on the fly to stay afloat. Those challenges were compounded as the City of Detroit’s financial situation deteriorated and balloon payments on the loans used to purchase its facility came due. By 2014, DHDC was unable to refinance its debt because of a sharp decline in local property values and struggling to remain viable. Through an introduction from The Skillman Foundation, DHDC became acquainted with IFF – leading to a $574,226 loan that enabled the organization to restructure its debt and achieve savings of $3,500 per month. 

“We would have lost the building had it not been for IFF,” says Reyes. “The banks we had talked to about refinancing weren’t willing to work with us, and I actually had to convince our board that the opportunity to borrow from IFF was real because of how challenging it had been to get any traction up to that point.” 

Back on solid financial footing, DHDC transitioned quickly into growth mode as it focused on bolstering its services and facility to best meet the needs of southwest Detroit’s Latino community. To support that goal, IFF’s Real Estate Solutions team helped DHDC develop a strategic facilities plan in 2015 that has served as a roadmap for the nonprofit. Among the upgrades that DHDC has completed is the installation of a new HVAC system, repaving the parking lot, modifying bathrooms to increase capacity, refinishing flooring, improving building insulation, enclosing a garage where the organization’s vehicles are stored, remodeling a robotics and engineering center where young people learn STEAM skills, and building out a teen tech center that functions as a maker space for hands-on projects involving video and music production, virtual reality, 3-D printing, and graphic design.  

As DHDC’s facility has evolved, so too have its programs, with the organization identifying new ways to support the community. One example is the Fantazma Market and Café, which began during the pandemic as a way to provide local restaurants and merchants with the space needed to safely sell their products. DHDC began opening its facility and grounds for pop-up events every Friday evening that included live music and entertainment. The initiative has served as a launching pad for more than 200 start-up businesses in the past four years and is now a permanent fixture in the community.  

“Fantazma is a good example of how our programs have developed over time based on what the community is telling us that they need, and our facility has become a hub for so many different things as a result,” says Reyes. “It’s a home away from home for kids in the neighborhood where they can participate in a range of activities, a safe place for the immigrant community where they know they won’t be discriminated against or in danger, and a place where people returning home from prison or those who have been in gangs can feel secure, among other things. We also open our doors to other community organizations all the time for events, and people in the community use it for wakes, birthday parties, baby showers, and weddings. Once you come through the door, you’re a part of the family.” 

In recent months, DHDC’s family has grown even more as the organization has served an influx of Venezuelan newcomers while providing a bulwark against gentrification that threatens to push the Latino community out of a fast-changing Corktown neighborhood. To ensure that DHDC remains an anchor on the city’s southwest side, the organization is now working toward a goal – informed by an IFF feasibility study – to add a second floor to its facility that will help ensure it can continue to serve as a haven for community members in need of support. 

“This is a neighborhood that had an 87 percent high school dropout rate when I founded the organization, and we’ve had kids who have attended college, gotten engineering degrees, and gone to work for GM, Ford, and Tesla,” says Reyes. “What I’m most proud of is seeing the people who have come through our programs develop into community leaders, and we want to continue to be a constant in the community that people can depend on.”

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