'Tis The Season: General Motors, Mercedes-Benz Announce Major Grants

December 13, 2010

While many of us cruise the interweb (and, less enjoyably, the malls) for perfect holiday presents, two automakers have announced great giving plans of their own: General Motors and Mercedes-Benz USA have launched new philanthropic initiatives, and both earn big points in our book.

The General Motors Foundation will soon dole out the largest gift in its history -- $27.1 million -- to the United Way for Southeastern Michigan. The funds will be used to create "Networks of Excellence" among five Detroit-area high schools. The goal of those networks is to boost graduation at the five schools, which now see dropout rates hovering near the 50% mark. The Foundation launched a similar program in 2008, and within one year, the five participating schools saw 83% of their student bodies on-track for graduation -- up from 65%.

Mercedes-Benz USA has a different sort of giving in mind. The company has announced support of The Conservation Fund's ShadeFund initiative, a microloan program for green entrepreneurs. From the ShadeFund FAQ

Established by The Conservation Fund with a lead grant from the U.S. Endowment for Forestry and Communities, ShadeFund enables individuals, companies and foundations to help green entrepreneurs across America grow their businesses and create jobs. Tax deductible contributions to ShadeFund are pooled and lent to qualified small green businesses nationwide. As entrepreneurs repay their loans, those same dollars are recycled to help other entrepreneurs grow their businesses.

There's no specific dollar amount tied to Mercedes-Benz's contribution; rather, the company has said that it will support 10 - 12 "Mercedes-Benz Signature ShadeFund Entrepreneurs...select, small business owners who display an innovative, entrepreneurial spirit, commitment to environmental values and exceptional artisanship." Since ShadeFund applicants can request from $5,000 to $50,000, Mercedes' gift could run as low as $60,000 or as high as $600,000, depending on who's asking. The first two businesses supported by Mercedes are City Bench and Bluebird Hill Farm.

It's important to note that GM's contribution comes from its foundation -- a nonprofit that has been funded largely by the for-profit automaker over the past 34 years. Like all American foundations, the GM Foundation is required to give away at least 5% of its investment assets each year, but since the Foundation's holdings totaled around $138 million at last count (at the end of 2008), the $27.1 million gift seems especially large -- not to mention very commendable.

Mercedes' gift, on the other hand, comes from the corporation, which explains why it's significantly smaller. Corporate gifts are often meant for sponsorship of events, stadiums, and the like -- things meant to generate publicity for the corporation, though not necessarily improve the community. This gift manages to do both.

To learn more about these two charity initiatives, check out the press releases below.

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GM Foundation Donates $27.1 Million to Help Raise Graduation Rates

DETROIT – The General Motors Foundation will donate $27.1 million to the United Way for Southeastern Michigan to create Networks of Excellence from five existing area high schools with the goals of dramatically increasing graduation rates and ultimately rebuilding the area’s skilled workforce.

The money, which is the largest donation in the 34-year history of the GM Foundation, is aimed at reducing the nearly 50 percent dropout rate in parts of Metro Detroit where the most manufacturing jobs have been lost in recent years.

“The students we are trying to reach are the future,” said GM North America President and GM Foundation Board member Mark Reuss, who announced the donation on Friday at Cody High School in Detroit. “The GM Foundation can make a difference and helping create Networks of Excellence is a proven way to do it.”

The network, which will be the second administered by the United Way in Detroit and its suburbs, will choose five high schools from which to create up to 20 academies along with establishing five Early Learning Communities to help get young children ready for kindergarten.

The first Network of Excellence began with five schools in 2008. After the first year, 83 percent of the students at the turnaround schools are on track to graduate, up from a low of 65 percent, according to the United Way.

“The goal is audacious,” said Michael J. Brennan, president and CEO of United Way for Southeastern Michigan. ”We want to transform Southeast Michigan into the home of one the top five most skilled and educated workforces in the nation. Our measurement is 80 percent or greater readiness for kindergarten and high school graduation where the norm in at least five key communities is 50 percent.”

For the GM Foundation, which recently announced a $2 million GM Foundation donation to help upgrade two community centers near its Detroit-Hamtramck Assembly plant, the Networks of Excellence commitment is the latest and largest example of helping its hometown and its residents.

“We talk a lot these days about doing the right thing,” Reuss said. “It has to be more than talk. It has to be tangible, and it has to be done with the right partners to get results.”

The breakdown of the donation includes $5 million a year for the next five years plus $425,000 a year for the five Early Childhood Learning Communities.

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Mercedes-Benz USA and the Conservation Fund Kick-Start Initiative to Support Green Entrepreneurs

Mercedes-Benz' Investment in The Conservation Fund's ShadeFund(TM) program spurs creative conservation and green economy by investing in sustainable farms, forests and forest products, eco-tourism and small-scale renewable energy

MONTVALE, N.J. -- Mercedes-Benz USA and The Conservation Fund announced today a keystone investment in The Conservation Fund's ™ program, a new charitable endeavor to raise donated capital that will provide small loans to green entrepreneurs.

While most microloan charities focus on entrepreneurs in the third world, The Conservation Fund's ShadeFund program will tap into the growing trend of making loans to American small businesses. True to its mission, The Conservation Fund's ShadeFund program is aimed at giving a leg up to entrepreneurs and innovators who use natural resources creatively and responsibly to spur a greener economy.

As an inaugural sponsor of the program, Mercedes-Benz USA will invest in 10-12 Mercedes-Benz Signature ShadeFund Entrepreneurs over the next two years: select, small business owners who display an innovative, entrepreneurial spirit, commitment to environmental values and exceptional artisanship. The first two Mercedes-Benz Signature ShadeFund Entrepreneurs, Connecticut-based City Bench and Bluebird Hill Farm out of North Carolina, will receive their loans by the end of the year.

"Mercedes-Benz is a brand that traces its 125-year history back to the invention of the automobile. It is a history that started with the entrepreneurial partnership of its founders Gottlieb Daimler and Karl Benz," said Steve Cannon, vice president of marketing for MBUSA. "It is in that spirit that we are partnering with The Conservation Fund - to provide that opportunity to a group of talented and passionate entrepreneurs who are working to innovate in the area of sustainability."

During a time when even the most creditworthy businesses are having a hard time getting loans, green entrepreneurs face an especially steep challenge. Often, green business models are unfamiliar to traditional financial institutions and many banks, large or small, are unwilling to make small business loans of less than $50,000 because there is not enough profit to balance transaction costs and the risk.

"As an inaugural sponsor of ShadeFund, Mercedes-Benz USA is investing in the spirit of innovation by providing much needed seed capital for companies in emerging green sectors. Together we can create creative conservation solutions that spur economic development and reward environmental and social responsibility," said Shade Fund's director, Rick Larson.

Established by The Conservation Fund with a lead grant from the U.S. Endowment for Forestry and Communities, ShadeFund is asking individuals, companies and foundations across the U.S. to make donations to help green entrepreneurs grow their businesses and create jobs. As soon as the donations are received, they are pooled by ShadeFund and can be used to support qualified small businesses nationwide. Once the entrepreneurs repay their loans, those same dollars will be recycled to empower new investments in green endeavors again and again.

Eligible industries include sustainable farms, forestry and forest products, eco-tourism and small-scale renewable energy production. ShadeFund loans range from $5,000 to $50,000 and can be used for working capital, as well as for the acquisition of materials, supplies, equipment and certification.

To apply for a ShadeFund loan or support an entrepreneur, visit: www.shadefund.org.

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