Nonprofits with multimillion dollar revenues seek additional taxpayer funding

Rep. Tyrone Carter, D-Detroit, requested three grants for Detroit-area economic development organizations in the 2026 state budget. The grant requests, among others, will likely face constitutional hurdles to get the money approved.

While lawmakers craft the 2026 budget, organizations line up for taxpayer handouts.

The Southwest Detroit Business Association could receive $2.25 million from the 2026 state budget if the Legislature approves Carter’s request.

The request stated the money would support “two high-impact, community-led initiatives designed to stabilize and grow Southwest Detroit’s small business ecosystem, revitalize key commercial corridors, and transform underutilized properties into economic and cultural assets.”

The Southwest Detroit Business Association reported $1.4 million in revenue and $1.8 million in expenses for 2022, according to its most recent Form 990, which it filed with the IRS.

It did not respond to an email seeking comment.

Invest Detroit, which received a $500,000 state grant in 2023, could get another $1.5 million handout if the Legislature agrees.

The money, according to the legislative spending request, would be used to prepare a site for a new world headquarters for JJ Curran Crane Company/Fleet Cost and Care.

The nonprofit generated $29.6 million in revenue in 2023 according to its most recent Form 990. GuideStar reports that it has $136.4 million in assets.

Its president earned $660,076 in total compensation.

Invest Detroit did not respond to a request for comment.

In the third earmark, Carter requested taxpayers send $10 million to the nonprofit Michigan Central Center for Mobility and Society.

“Michigan Central Center for Mobility and Society’s Mission is to foster economic development, skills training, entrepreneurial activity, and inclusive innovation at the intersection of mobility and society,” the grant request says. “This spending item will be used to accelerate economic development growth in technology, entrepreneurship, and talent development, specifically in areas such as mobility, biotechnology, advanced manufacturing, agriculture, and digital health and lead to a number of outcomes.”

Funds would be used to help more start-up companies and build partnerships, according to the document Carter filed with the Michigan House.

Michigan Central requested that Carter pull the application, according to Pakelody Cheam of the public relations firm Berlin Rosen.​

“Earlier this summer, Michigan Central requested Rep Carter pull its application,” Cheam wrote in an email to Michigan Capitol Confidential. “We appreciate Rep. Carter’s support and partnership, as well as Speaker Hall’s transparent process.”

The nonprofit did not receive its Internal Revenue Service designation until 2023.

Michigan Central reported on its Form 990 that it had $4.4 million in total revenue in 2023, of which $1.6 million came from government grants.

It reported that several officers, including a vice president and treasurer who worked more than 30 hours per week. The form also included a box, filled with a check mark, next to a statement that ”neither the organization nor any related organization compensated any current officer, director, or trustee.”

The Michigan Constitution requires a two-thirds majority vote in the the Legislature to give money to a private entity. 

The money also must be used for public benefit.

The Mackinac Center for Public Policy filed a lawsuit against the Michigan Department of Labor and Economic Opportunity over two similar grants.

The Mackinac Center argues that most of the grants issued to private entities in previous state budgets are not constitutional.

“Instead of adhering to the process laid out in Michigan’s constitution, lawmakers have tucked funding for pet projects into late session ‘community enhancement grants’ or ‘special district projects,’ avoiding public scrutiny and amending procedures,” the Mackinac Center wrote in its case summary.

Carter did not respond to an email seeking comment.