DETROIT, MICH.- The Detroit Institute of Arts
announced that thanks to the generosity of corporations, foundations and individuals, it has raised enough money to satisfy its $100 million commitment to the grand bargain that was part of Detroits bankruptcy settlement.
Were thrilled that our generous donors have helped us reach our goal so quickly, said Eugene A. Gargaro, Jr., DIA chairman of the board. Not only have many long-time 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 Detroits pensioners and safeguard the museums collection for generations to come.
Under the grand bargain, the DIA is required to make payments of $5 million per year for 20 years. However, the museum will take advantage of the present value discount negotiated in the grand bargain settlement. Although the museum is still awaiting signed agreements from several donors, the DIA has secured payment schedules that will allow the museum to exceed its annual commitment of $5 million in the first five years, earning the museum a 6.75 percent present value benefit on those advance payments.
The most prominent example of the present value discount is the $194.8 million payment the State of Michigan will make in February. This one-time payment is equivalent to the initial commitment of $350 million over 20 years. The present value discount provides a benefit to donors for early payments.
The DIA made its first payment of $ 5 million to the Foundation for Detroits Future, administered by the Community Foundation for Southeast Michigan, immediately after the closing of the grand bargain in December. The next scheduled payment will occur in June 2016, with additional annual payments taking place through 2034.
The completion of grand bargain fundraising will allow the DIA to focus its fundraising energy on building its unrestricted operating endowment. A healthy endowment will provide the museum with financial stability and reduce or eliminate its reliance on public funding.