Foundations are credited with resurrecting the Pittsburgh's economy after the 1980s' collapse
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Kate Dewey arrived in Pittsburgh in 1980 from Washington, D.C., just in time to witness the region's longtime economic base begin to deteriorate as steelmakers and other corporate heavyweights were shuttering plants -- and in some cases, leaving town altogether.
"It was a city at that point that saw its lifeline as steel, and I think the concern was, what could possibly be next?" said Ms. Dewey, who landed here as the founding director of Allegheny County's Child Sexual Abuse Task Force and then moved into a series of jobs in the nonprofit and philanthropic sector.
Among her early stints was manager of community affairs for Mellon Bank, where her tenure in the early 1980s coincided with well-publicized demonstrations by ministers and labor leaders who threw dead fish in the bank's safety deposit boxes as a protest against the city's corporate elite.
What helped rescue the Pittsburgh area from complete collapse, Ms. Dewey believes, was a recognition by private foundations that it was time to step up and play a role in economic development and neighborhood revitalization through investment and leadership.
"Though we lost many corporate dollars from this Rust Belt community, we had private foundations committed," said Ms. Dewey, who is leaving her current position as a nonprofit consultant to become president of the Forbes Funds on Jan. 1.
A TIDE OF CHANGE
Our regional economy barely resembles the one from 30 years ago. A full generation has passed since January 1983, when the southwestern Pennsylvania economy was at its nadir and unemployment was at its all-time peak.
Second in a series on how our economy has transformed since bottoming out a generation ago.
Sunday:In desparate 1983 there was nowhere for the economy to go but up
Tuesday: While Pittsburgh has found a new identity, other spots around the region haven't been as lucky. Could the energy industry help those pockets, such as Beaver County, that are still suffering from the end of Big Steel?
Wednesday: No sector of our economy has undergone more changes since 1983 than manufacturing -- technology improvements reduced domestic workforce needs, and foreign competition was stealing business. The manufacturers that remained were forced to adapt.
Specifically, she credited the Heinz Endowments and the Richard King Mellon, McCune, Hillman, Buhl and Pittsburgh foundations as prominent players in the philanthropic community's efforts to "re-engineer our identity."
The private foundations' commitments were especially important, Ms. Dewey said, because they filled the gap created when several major corporate foundations disappeared -- including Allegheny International, Rockwell International and Gulf Oil -- after their parent companies merged, downsized or left town.
Among the critical investments the foundations made, Ms. Dewey said, was providing funding for the rejuvenation of East Liberty -- a formerly thriving neighborhood that had disintegrated in previous decades.
Public-private revitalization plans that included the foundations helped East Liberty to eventually attract high-profile, national retailers -- including Home Depot, Whole Foods, Trader Joe's and Target -- to what was "a marginalized community," she said.
Other significant projects the foundations decided to bank on in their early stages and which have paid off for the local economy in terms of job and prestige, Ms. Dewey said, are health care initiatives such as the Pittsburgh Tissue Engineering Initiative and the University of Pittsburgh Cancer Institute.
Prior to the collapse of manufacturing, many foundations were reactive rather than proactive about civic issues, said Grant Oliphant, president and chief executive of the Pittsburgh Foundation.
Mr. Oliphant relocated to Pittsburgh in 1991 to work for a local medical products firm "when the city was still reeling from the collapse of the steel industry and trying to figure out what its future was," he said. "The foundation community was forced to re-think what it was about."
Foundations started to collaborate and develop a strategy and philosophy to leverage dollars to make a significant impact, he said.
Among the most important investments they made, he believes, was in redeveloping the area of Downtown now known as the Cultural District, which now features major entertainment venues like the Benedum Center and Heinz Hall, art galleries and restaurants.
"I believe Downtown would have gone the way of Cleveland and Detroit if not for that investment in the Cultural District. It gave the urban center a reason to exist and really gave Downtown Pittsburgh a reason to stay alive," Mr. Oliphant said.
Rick Stafford, professor of public policy at Carnegie Mellon University's Heinz College, was chief executive of the Allegheny Conference on Community Development from 1991 to 2003 -- a period during which the foundations "really responded to the big downturn of the '80s," he said, by investing in community development projects and new business initiatives like the Pittsburgh Life Sciences Greenhouse and Digital Greenhouse.
"Foundations have increasingly migrated from sort of quality of life and culture and arts and things that make for an attractive community [to] economic development and improving the product itself through workforce development, education and figuring out how government can work better," Mr. Stafford said.
After the national economy crashed in 2008 and through the ongoing recovery, local foundations were quick to respond, said Robert Vagt, president of the Heinz Endowments. "One of the things the '80s did was expanded how the endowments viewed their role."
The Heinz Endowments, for instance, increased its support of the Greater Pittsburgh Community Food Bank, and is constantly evaluating how to help nonprofits and social service agencies whose programs have been threatened by government budget cuts.
The Pittsburgh Foundation in 2008 teamed with the United Way of Allegheny County, private philanthropist Elsie Hillman, other foundations and the Allegheny County Department of Human Services to create Neighbor-Aid, a temporary fund to assist those nonprofits that provided basic services to families and individuals experiencing economic hardship.
"So the role of philanthropy is being changed," Mr. Vagt said. "Many things we were funding alongside government and now government has pulled the lion's share. ... So we talk about how the landscape changes and what's going to exist on the other side."
First Published December 24, 2012 12:00 am