Building Detroit’s Community Based Economy

Case Statement & Overview of Current Work

Problem Statement 

The City of Detroit has experienced a long period of economic decline. Between 2000 and 2010 alone, population fell by 25 percent, which, other than Katrina-affected New Orleans, is an amount greater than that experienced by any other large American city. A number of strategies have been implemented to work to arrest this decline. Most importantly, a number of foundations have come together to create the New Economy Initiative (NEI), which aims to direct philanthropic reinvestment into the City of Detroit. A number of valuable efforts have received support from NEI. Nonetheless, there are obvious gaps in current revitalization strategies.

In particular, job creation and economic development strategies in Detroit have relied nearly exclusively on sole proprietorship entrepreneurs. These efforts are important and should be supported. At the same time, small business entrepreneurship has two obvious weaknesses: 1) Only a small percentage of the overall population is likely to be “entrepreneurial”, meaning that this strategy is not going to be viable for large sections of the Detroit population: and 2) Even among true entrepreneurs, the failure right of traditional small business in the United States is high — typically, only three out of every ten small businesses survive 10 years.

The Community Economy Group Solution: Building a Network of Community Enterprises

The Mission of the Community Economy Group (The Group) is to create a successful Metro Detroit-based, business group built on values of cooperation, commitment to community and sustainability, utilizing Metro Detroit’s unique resources while cognizant of the area’s challenges. The Group’s work is an ongoing effort to teach and adapt proven models of cooperative economic and social practices, to help consolidate and accelerate Detroit’s transformation to a sustainable and inclusive local economy. The Group includes three principal entities, with different, but related functions:

• The Center for Community Based Enterprise (C2BE) – a non-profit education and technical assistance center promoting community wealth building
• IngenuityUS, L3C (IUS) – a Community Innovation Broker and Business Developer incubating businesses that employ Detroiters with limited formal education in jobs that provide them a living wage; and providing resources to local inventors
• Groban Olson & Associates (GOA) – a law firm that specializes in creating and advising employee owned companies and cooperatives.

Our Theory of Change

Detroit needs more than one-off businesses; rather, we need to develop a supportive ecosystem for community-based enterprise, with a focus on creating businesses with limited barriers to entry where employees build skills and leadership on the job. Among other things, this requires:

1. Developing mechanisms for businesses to support each other, such as by implementing “concierge” services models that give local business the “back end” support they need
2. Assisting communities to start-up community-owned businesses and thereby build up community assets through cooperative, employee ownership, and related mechanisms
3. Identifying partners who can invest both ideas and capital to jump-start businesses
4. Forming mutual support organizations that create a vehicle for reinvestment of profits to help finance the formation of additional community-based enterprises
5. Sharing risk among network businesses to increase the likelihood for long-term success

Our Work

The Group provides businesses and community groups information and connections to each other and volunteer professional and technical resources. We provide technical support, within our means for developing businesses that agree to develop as worker owned.

Resources Needed

To develop a supportive ecosystem for community-based enterprise community based enterprises need capital for market research, plans and efforts; business plans and consulting; legal structuring and documents; acquisition of equipment and management talent, education for workers and management on operating a participatively managed workplace.

Current Projects (include development assistance to):

• Mobelink™ Furniture - production through a worker owned company- Alan Kaniarz, of AK Services, designer, Vanguard CDC community partner
• Home Care Cooperative – technical assistance on organizing and structuring co-op – Richard Hillier & Gaia Kyle
• Collaboration with MOSES - on creation of food buying club for Detroit churches that will make healthy food available throughout Detroit’s food desert, and support the locally owned Detroit supermarkets that provide quality food at reasonable prices
• Collaboration with ACCESS - on creating a support cooperative for recent immigrants providing in-home child care
• Detroit Cooperative Community - collaboration with ROC Michigan
• Investigating young families co-housing co-op with Church of the Messiah

Funders to Date

Organizations: Skillman Foundation, LISC, Chase Foundation, Fund 4 Democratic Communities, Innovation Network 4 Communities, MLG Foundation, Human Resources Development Inc., ShoreBank Enterprises, Buck Dinner Committee, MSU/EDA Regional Economic Innovation Program, PSG Group, Inventor Ed, Inc.

Individual Contributors: Betsy Aretz, Victor Beros, Robert Berry, Sharon Cooper-Jones, Phyllis Davis-Williams, Steve Dubb, Ed Egnatios, Paul Emery, Basima Farhat, Henry Fradkin, Michael Friedman, Richard Hillier, Ara Howrani, Keith Hughes, Shawn Kimmel, Mary Landry, Joseph Lachlan, Tom Nugent, Daniel Olson, Deborah Olson, C. Martin Peters, Harriet Saperstein, Frank Scruggs, David Spitzley, Beverly Stein, Marnie Thompson, John Viera, and Thomas Woodman.