The Detroit Institute of Arts has announced that it has raised enough to satisfy its $100 million commitment to the "grand bargain" struck as part of the city's bankruptcy settlement.
Under the agreement, DIA pledged to make payments of $5 million a year for twenty years, augmenting the $366 million pledged by twelve private foundations and $350 million from the state of Michigan to help cover the bankrupt city's pension obligations. However, the museum was able to negotiate accelerated payment schedules from many donors that will enable it to exceed its annual commitment of $5 million in the first five years, earning it a 6.75 percent "present value" discount on those payments. While pledges to the museum's share of the grand bargain currently total roughly $90 million, DIA board chair Eugene A. Gargaro, Jr. told the Detroit Free Press that the present value of the funds the museum has raised — the funds themselves plus their interest-earning potential over time — equals $100 million. The state similarly contributed $195 million upfront to the grand bargain, the equivalent, after interest, of $350 million over twenty years.
Announced less than a year ago, DIA's commitment to raise $100 million toward the deal was greeted by supporting pledges of $10 million from the Ford Motor Company Fund, $6 million from the Chrysler Group, and $5 million each from General Motors and the GM Foundation, among other donations. Immediately after the closing of the deal in December, the museum made its first payment of $5 million to the Foundation for Detroit's Future, which is administered by the Community Foundation for Southeast Michigan. Looking ahead, the museum will focus on raising roughly $275 million in new endowment funds over the next eight years to ensure its long-term viability.
"We're thrilled that our generous donors have helped us reach our goal so quickly," Gargaro said in a statement. "Not only have many longtime donors come through for us, but many new donors, including those from outside Michigan, have also given generously. We want to thank everyone who helped us fulfill this commitment that will benefit Detroit’s pensioners and safeguard the museum’s collection for generations to come."