Millions of donors' dollars flow through northern Michigan

By Patrick Sullivan | Nov. 21, 2016

It you haven’t heard about all of the money being raised for nonprofit projects around northern Michigan recently, it’s probably because your bank account is too small.
In recent years there’s been an explosion in capital campaigns, or pushes to raise enormous sums of money primarily from wealthy donors, by nonprofits or foundations for big construction projects.
“We’re talking hundreds of millions of dollars of campaign; there are an amazing number of campaigns going on,” said Phil Ellis, executive director of the Grand Traverse Regional Community Foundation. “I think some of them are potentially transformational for our region.”
The campaigns vary tremendously in size and scope — one group wants to raise $1.6 million for a homeless shelter, another $12 million for an elementary school, another $100 million for an arts center campus.
Organizations typically don’t talk about the campaigns until they’ve raised 75 or 80 percent of the goal. In the early stages, fundraisers contact a few wealthy donors who can put up the bulk of the stake.
So many drives are occurring now because there’s a lot of need among organizations to shore up infrastructure and modernize facilities. But there’s another reason, according to Ellis: Wealthy baby boomers are getting older and are looking for things to do with their money. And this region has a lot of wealthy residents, at least part-time.
“There is this transfer of wealth. It’s not like it’s theoretical. It’s happening,” Ellis said. “And so, I think there are a number of organizations that feel like they’ve got to get into the mix of this, because there’s a field that’s ripe and how do we harvest?”
There is no central registry to look up the campaigns, but Ellis, because he heads an organization that helps wealthy people set up charitable foundations, is in a position to know what’s going on. Some campaigns are well on their way to their goal and have become public. Interlochen Center for the Arts has raised close to $99 million of its $100 million goal. Grand Traverse Area Catholic Schools has raised $10 million of $12 million.
There are others Ellis won’t mention because they are in their “quiet” phase, and the organizations don’t want to talk about the fund drives until they’ve lined up big donors.
Different organizations are going to have different experiences because each has their own constituency, Ellis said.
Interlochen, for example, is different because its supporters don’t just live in the area, they live around the world. Most of what Interlochen raised has come from outside the region. Of the $98.6 million raised so far, $11.2 million came from permanent or part-time residents of Benzie, Grand Traverse or Leelanau counties.
The Interlochen Library, on the other hand, is in the middle of a $2.5 million capital campaign for a new building. Those donors are going to be local.
“That’s a very different group of donors that they are looking to,” Ellis said.
Ellis said “donor fatigue” is a concern for people in big and small organizations today when they embark on projects.
“When you get to a point where we are now, where there are so many things going on — locally we’ve got the GTACS campaign, Munson, NMC, and then some of the smaller campaigns — there comes a point at which you hit some donor fatigue, quite frankly,” he said.
Christie Minervini, who is fundraising chair for Safe Harbor, a nonprofit dedicated to housing the homeless in Traverse City, said her organization is in the midst of a “quiet” capital campaign to build a shelter, but she was nonetheless willing to talk because her group is preparing to take its campaign public in February.
Minervini said big donors like to provide seed money rather than fill in gaps, so organizations approach the wealthy before they approach the public.
Minervini said she noticed that there are a lot of campaigns taking place right now, but Safe Harbor was able to stand out enough to overcome the challenge.
“There’s a finite amount of money in the community, and we’re all dividing that up right now,” Minervini said. “But we don’t feel like we’re competing with a lot of people who would be in our category. … I think that if the cause is important enough, then individuals want to be involved and want to find a way to make it work financially.”
Wayne Mueller, executive director of the Grand Traverse Area Catholic Schools Foundation, been in charge of fundraising for 13 years and said he is not afraid of donor fatigue.
“I think sometimes when there’s a lot of different campaigns going on in the community, I think it helps all campaigns,” he said. “I think when people see generosity, it triggers them to be generous.”
Ultimately, all of this means that an unprecedented amount is being injected into northern Michigan’s economy.
“Some of them are definitely economic drivers. If you expand the base of a hospital, and services and so forth, then you’re bringing in not only new business, but new professionals,” he said. “It’s a pretty major impact for northern Michigan.”
Here’s an incomplete list of some of the capital campaigns large and small that are happening in the region:

MUNSON LOOKS TO GROW UP
Munson Healthcare is in the midst of two campaigns, one in Charlevoix where it has raised most of the $3 million needed for a hospital renovation and another at Munson Medical Center in Traverse City.
It hopes to raise up to $30.2 million to pay for part of a new tower for the main campus.
That would pay for a neonatal intensive care unit, a pediatric center and a maternity unit that would inhabit two floors of the new tower. That campaign is in its early stages.
“We’re just starting to gather some leadership gifts right now,” said Des Worthington, chief development officer for Munson Healthcare Foundations.
That’s just part of the new Munson tower, a project that could cost more than $100 million. How the project looks in the end depends on how much money can be raised and how much money can be saved to be devoted to the project from the operations budget.
There’s a lot of uncertainty surrounding the whole project following the Nov. 8 elections, Worthington said. National health care policy is now uncertain, as is the ability to build tall buildings in Traverse City following the approval of Proposal 3.
“There are a lot of unknowns,” Worthington said. “What is known is that this is an absolute need for our region.”
Take the maternity ward. It was built in 1995 in anticipation of 1,200 births per year. Today, the hospital sees 2,000.

ONE NEW SCHOOL, ANOTHER IMPROVED
Mueller feels good about the trajectory of the first phase of GTACS’ capital campaign to modernize its buildings.
It’s raised $10 million toward a goal of $12 million to build a new elementary school at the Immaculate Conception campus in Traverse City.
“Definitely, there’s good momentum toward it, but that’s still a couple million dollars (short), so there’s still a lot of work to do,” Mueller said.
GTACS still has to raise the money and get final approval from the city, but Mueller said he hopes to see construction begin at the end of the school year, in June 2017.
The campaign began its quiet phase in January 2015 and went public in September.
This will be followed by a second phase when GTACS will attempt to raise $8 million or more for the renovation of St. Francis High School on Eleventh Street.
That building is old and needs work, but Mueller said the plan is to completely revitalize the building.
“Our hope is that it will essentially look like a new building by the time it’s done,” he said.

PETOSKEY’S WORLD-CLASS VENUE
There will be an alteration of the skyline looking over Bay Harbor to Little Traverse Bay this winter.
Construction of an architecturally striking, $25 million performing arts center is underway, and Jill O’Neill, executive director of the Great Lakes Center for the Arts, is excited.
“Folks that are here in the area will see the theater itself coming out of the ground during the winter,” O’Neill said.
Plans for the center started in 1999, and it became part of the Bay Harbor master plan in 2000.
The center is nonprofit and donor driven — Bay Harbor developer David Johnson kicked off the project with the donation of land. Efforts to raise the $25 million to construct the building began in 2014. Eighty-two percent has been raised so far, and now that the campaign has entered its public phase, O’Neill says it’s got the momentum to reach its goal. She said people from across the region, from Charlevoix to the Straits, are excited about the project and have been donating money.
The center is scheduled to open on July 7, 2018, but excitement should grow next summer when the first season’s lineup of concerts is announced.
A big part of the public campaign will be the sale of naming rights to seats in the 500-seat theater. O’Neill said it’s an opportunity for people to become invested in the project.
O’Neill said she’s been aware that there have been a lot of other capital campaigns occurring while the performing arts center campaign was underway, but she doesn’t believe it hindered them.
Maris Harrington, director of development for the center, agreed.
“People want to invest in areas and regions that are thriving and growing,” she said.

INTERLOCHEN TRANSFORMED
When Interlochen set out in 2012 to raise $100 million, it turned not just to donors around northern Michigan, but to donors around the world.
Today, Interlochen has reached 99 percent of its goal, said Tim Dougherty, vice president for advancement at Interlochen.
“When we set the hundred-million-dollar goal, we thought we might top that in early 2018. Now it looks almost inevitable that we’re going to pass that goal by Jan. 1,” Dougherty said. “We have been really blown away by the outpouring of support.”
The campaign — Dougherty refer to it as a “comprehensive campaign” rather than a capital campaign because it includes fundraising across the organization, including for operations — launched with a four-year quiet phase. When the campaign went public in July, Interlochen said it raised $92 million. It’s raised $7 million since, a number Dougherty said he thinks is amazing.
The campaign will complete the final pieces of a transformation of the campus that began 15 years ago, Dougherty said. Eleven new buildings have opened since 1998.
The centerpiece of the new campaign will be a new central music building, expected to break ground in the spring. Interlochen also plans to renovate and expand its lakeside dance facility. The Dennison Center, a student recreation building, opened in October. It also plans to improve access and beautify its beach on Green Lake.
“These four projects — we kind of think of them as completing the revitalization of the campus,” Dougherty said.
Dougherty said even if Interlochen executed its campaign amid a swarm of other campaigns, he never heard any hints of donor fatigue.
“Anecdotally, we haven’t heard that objection, even from our local supporters,” he said.

BIG, QUIET THINGS HAPPENING AT NMC
Bigger things — and broader requests for funding — may be in the works at Northwestern Michigan College, but school officials are not ready to go into details about plans for a capital campaign.
Paris Morse, NMC director of development, said the school is in the preliminary stages of figuring out how much money it needs to raise and what projects it wants to pursue.
“The college and the foundation have been working closely together to identify fundraising priorities for us into the future,” Morse said. She didn’t want to go into details.
That’s not to say things aren’t already happening.
The college broke ground in August on a $5 million expansion of the Dennos Museum that will include two new galleries, a sculpture gallery, an expansion of the Inuit art room and another classroom.
“We’ve been thrilled by the generous donations we’ve received from the Milocks and Smiths, and that bodes well for the future,” Morse said. “We are certainly looking to increase our fundraising in ways that we haven’t done before.”

HOSPITAL BUILT WITH OIL MONEY
Otsego Memorial Hospital in Gaylord is about to get a lot bigger.
It plans 17,000 square feet of “heavy renovation” and 15,000 square feet of new construction, said Christie Perdue, executive director of the Otsego Memorial Hospital Foundation.
The expansion is thanks to a capital campaign that went public on Sept. 22.
The hospital is attempting to raise $4 million for a $14 million project. It will make up the difference through bonds and savings in the hospital’s budget.
During the quiet phase, which lasted a year, the hospital raised $3 million, Perdue said.
This is a big undertaking for the foundation.
“It’s one of the biggest (campaigns) that I am aware of, as far as the number of donors and total amount that we’re looking to raise,” she said.
The campaign also brought in the single largest gift the foundation has ever received — $750,000 from the Johnson Oil Company family to build the Dale E. Johnson Emergency Department.
The new emergency room will see the number of exam rooms grow from a dozen to 19. Construction is expected to break ground in the fall of 2017.
When the campaign started, Perdue said she was concerned about low oil prices because most of the potential big donors were in the oil business. Profits rebounded as the campaign went along, and that helped meet the goal, she said.
Perdue said she didn’t think the foundation’s campaign was affected by other capital campaigns across northern Michigan.
“In our area, we did not have any other major campaigns going,” she said.

SHELTER FOR SAFE HARBOR
When the Safe Harbor board did a feasibility study to determine whether a capital campaign to raise money for the construction of a homeless shelter would be possible, it got some difficult news.
Members were told that to get started, they would need a single donor to pledge a quarter million dollars, said Minervini.
“I just thought that was really unachievable and pie-in-the-sky, and ‘How are we going to get this lead gift?’” she said. “And two weeks later, we had the lead gift.”
Safe Harbor is still in the quiet phase of its campaign, but Minervini said it is getting ready to turn to the public for help. She said she couldn’t discuss how much has been raised so far.
“I’m happy to tell you that we’re doing extremely well, and we’re on track to meet our 80 percent goal at the end of February,” Minervini said.
After that, Safe Harbor plans to turn to the community for the remaining 20 percent. For the public campaign, it will tap into its volunteer network and use events like the annual September community breakfast, which raises money while giving attendees a chance to hear from folks who have gotten out of homelessness thanks to help from Safe Harbor.
Minervini said the organization is fortunate to have received gifts that have enabled it to begin the renovation of its building on Wellington Street so that it can meet its goal of having a permanent homeless shelter open by winter 2017.
It is seeking to raise $1.6 million, which includes construction costs and two years of shelter operation.

psullivan@northernexpress.com