NEI Awards $300K to Small Businesses, Starts Search for New Leader

The New Economy Initiative (NEI) today announced the 2015 batch of NEIdeas Challenge winners; 30 small businesses grossing less than $750,000 annually received $10,000 each to grow their operations.

The competition was open to any business in Detroit, Hamtramck, or Highland Park that is at least three years old. Part two of the competition, which will award two $100,000 grants to two businesses grossing between $750,000 and $5 million annually, will conclude in December.

Overshadowing the funding announcement, though, was news Friday that the NEI’s longtime executive director (and Detroit Xconomist), David Egner, will step down at the end of December for a new gig as the president and CEO of the Ralph C. Wilson Jr. Foundation. We caught up with Egner to ask him about both pieces of news.

Egner says there was some concern initially that the NEIdeas initiative would suffer a “sophomore slump” in its second year, but that didn’t happen. Instead, more than 500 businesses from every corner of the city applied. Roughly 60 percent of the businesses that applied this year were minority-owned, and 71 percent were owned by women. In total, NEIdeas has received 1,110 applications since it was established in 2014, and technical assistance was offered to each company that applied, even if they didn’t win.

Though that assistance is important, Egner says NEIdeas was created to combat the idea that Detroit’s ongoing revitalization was open only to tech startups in the city’s downtown business district.

“We wanted to build trust with the businesses that have been holding down the city for a long time,” he says. “We had a street team out recruiting, and we had our materials translated into four languages: English, Arabic, Spanish, and Bengali. We had 25 ambassador sites. It was really an extensive outreach program to connect small businesses back to support resources.”

Each applicant was evaluated by a jury of entrepreneurs, small-business leaders, nonprofit foundations, and corporate partners; key factors in determining the winners included growth opportunity, history and mission, neighborhood impact, and financial standing. The winners will gather tonight at Detroit’s Gem Theatre for an awards ceremony.

Egner says it’s the success of programs like NEIdeas that reinforce the biggest takeaway from his time leading the NEI: that inclusion is critical.

“If we don’t have an inclusive recovery, we’ll push people out who have already been struggling with this historically high disparity in wealth and opportunities,” he says. We’re at risk of creating two cultures—one where those with privilege and connections are shepherded along the path to success, and one where people are told they can’t do it, so don’t even bother trying.

“NEIdeas was designed to change that mindset in Detroit,” he says.

Egner has an extensive background in philanthropic work, having also served as the president and CEO of the Hudson-Webber Foundation since 1997. The Ralph C. Wilson Jr. Foundation is named after the former owner of the Buffalo Bills professional football team, a Detroiter who passed away last year at the age of 95. As part of the proceeds from the sale of the team after his death, $1.2 billion was set aside to be distributed by the foundation to eligible nonprofits in Detroit and Buffalo.

Egner says the Ralph C. Wilson Jr. Foundation’s mission is still being fine-tuned, but it will focus generally on “four large buckets:” youth, which includes programs supporting early education and healthy lifestyles; job opportunities for working-class families and young adults; eldercare; and community assets, which covers economic development and community engagement.

“My work at the NEI has primarily been in the fourth category, so there’s some continuance, but it will also be a new adventure,” Enger says. The foundation is intended to have a lifespan of 20 years. “Ralph wanted to see the fruits of the foundation’s work during the lifetime of the foundation’s trustees,” he says.

The NEI, launched in 2008 when 10 foundations came together for a $135 million philanthropic initiative of up to eight years, was similarly created to be temporary. In 2014, most of the original funding organizations again anted up to enable the NEI to continue its work, and Egner says it’s funded until 2017.

“The question becomes, do you raise additional funds to take it to 2020? That’s being discussed now,” he says. “My opinion is that it would be premature to pull away, in particular with the changes going on at the [Michigan Economic Development Corporation].”

The MEDC, the state office in charge of economic development, supports many of Michigan’s entrepreneurial programs but has been embroiled in a game of political tug-of-war for the past two years, which has affected the department’s budget. “The MEDC has had to cut programs, and some of them have been in the entrepreneurial space,” Egner says. “These programs are important not just for today, but for the way future industries are developed in the state.”

The process to pick Egner’s successor at the NEI has just begun, he says, and he’s not sure when the decision will be finalized.

Sarah Schmid Stevenson is the editor of Xconomy Detroit/Ann Arbor. You can reach her at 313-570-9823 or sschmid@xconomy.com. Follow @XconomyDET_AA

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