FAQs

Economic development is the result of sustained, concerted, and collaborative efforts that advance the standard of living and economic health of a targeted geographic area. According to the U.S. Economic Development Administration, economic development creates the conditions for improved quality of life by expanding the capacity of individuals, firms, and communities to maximize the use of their talents and skills to support the innovation that drives economic growth.

One of SPARK’s primary objectives is to bring together private and public partners, like the Michigan Economic Development Corporation (MEDC), and Michigan Works! Association, city and municipal partners, University of Michigan, and others to support the growth of companies and the creation of jobs in Washtenaw and Livingston counties. We also partner with other regional economic development organizations, such as the Detroit Regional Chamber, on opportunities that will impact all of southeast Michigan.

Ann Arbor SPARK promotes Washtenaw and Livingston counties as a destination for innovation. We do this by amplifying the stories of entrepreneurial and business achievements from the region. Additionally, to support a culture of success, we offer entrepreneurs and businesses a variety of services that can help companies solve specific business challenges that may impede an organization’s growth. From talent attraction and retention to business incubation and acceleration, we work with a range of public and private partners at the state and local level to provide these services.

Ann Arbor SPARK operates two business incubators in Washtenaw County: The SPARK Central Innovation Center in downtown Ann Arbor and the SPARK East Innovation Center in downtown Ypsilanti. These business incubators provide affordable office space and business support services to startups. Additional services include connecting entrepreneurs to mentors and business consultants to help with marketing, financial planning, investor pitch preparation, and access to other expertise that would otherwise be unaffordable to these startup businesses. LDFA funding goes towards our business incubators. Learn more about the LDFA.

State and local incentives are tools that SPARK can use to attract a business to this region, or convince a company to stay here and expand versus choosing another destination for growth. We help companies applying for these programs through project management and process facilitation.

Each county identified its local stakeholders when convening a review committee. The links below are specific to Washtenaw and Livingston counties.

• Washtenaw Small Business Emergency Relief Fund Recipients
  • Learn more about this grant and read its FAQs.
• Michigan Small Business Survival Grant
  • Learn more about this grant and read its FAQs.
• Michigan Small Business Relief Program
  • Learn more about this grant and read its FAQs.

SPARK has a contractual partnership with the Economic Development Council of Livingston County (EDCLC) to provide economic development services to businesses in the area. The EDCLC Board oversees the work that Ann Arbor SPARK does to advance the economy of Livingston County. This partnership leverages project-based and strategic economic development services in the region through proactive outreach to local businesses in Livingston County that result in value-added services and connections. You can read more about our work in Livingston County through our Livingston portal, which includes information on: Livingston County Data and Metrics, a map of successful projects, Livingston County Entrepreneurial Services, Livingston Economic Action Plan, and other information.

View the 2021 Annual Report. View past Ann Arbor SPARK’s annual reports can be found online here.

Ann Arbor SPARK provides a full-funding report to the Office of Community and Economic Development at Washtenaw County. That office includes SPARK metrics in its report to the Board of County Commissioners, which is also a part of the board’s annual budget preparation process. The results included in the report include leveraged funding, jobs created and retained through the funding, and the location of the project. The most recent report is available here.

Ann Arbor SPARK provides quarterly reports detailing its work and results to the Economic Development Council of Livingston County. All reports are archived and can be accessed here.

Company growth projects, new investment commitments, and announced jobs are industry standard ways of measuring business development success. We track these data points throughout the year and include them within our annual report as both fiscal successes and cumulative data. These data are also reported on a monthly basis to the finance committee and executive committee of SPARK’s board of directors.

As part of its funding obligations for the business accelerator programs that are funded by the MEDC’s 21st Century Jobs Fund, Ann Arbor SPARK is required to report data back to MEDC on a regular basis. The MEDC requires different reports and reporting requirements for each of the programs — the Michigan Pre-Seed Capital Fund and the SPARK East Innovation Center. The information reported to the state is specified by MEDC, and SPARK has provided all data on time and as required.

In 2017, the Ann Arbor/Ypsilanti SmartZone Local Development Finance Authority (LDFA) contracted Stevens Kirinovic & Tucer P.C. (SK&T) to assist them in evaluating the job creation reporting of Ann Arbor SPARK. SK&T’s evaluation included interviewing and observing SPARK’s management and operational personnel to determine how the information is gathered and reported, and also included direct confirmation of the information provided by SPARK with the companies it reported having served.

As a non-profit organization, Ann Arbor SPARK complies with specific legal reporting requirements under federal and Michigan law and has done so faithfully since its inception in 2006. One such requirement is the public posting of SPARK’s federal tax returns which are available here. You may also view a PDF of Form 990.

Ann Arbor SPARK is a 501(c)(6), which qualifies it as a business league devoted to improving common-interest business conditions and does not benefit a single individual or shareholder. The organization also manages the Ann Arbor SPARK Foundation which is a 501(c)(3) charitable organization. It is a very common arrangement for organizations to have both designations. For example, the Ann Arbor / Ypsilanti Regional Chamber has both as well. Because the organization maintains the two designations, we file two tax returns.

Most of our programs are through Ann Arbor SPARK. These include our business acceleration and incubation work with startups, business development services for established businesses, funding programs (the Michigan Pre-Seed Capital Fund, Ann Arbor/ Ypsilanti LDFA microloans and Eastern Washtenaw microloans), talent services, and marketing the region. The mission of the Foundation is to provide funding and support for the activities of Ann Arbor SPARK, for the encouragement, promotion and support of area development, re-development, and renewal. Examples of programs that the Ann Arbor SPARK Foundation has supported include the management of the Accelerate Michigan Innovation Competition, developing support for the American Center for Mobility, and community education about Angel investing.

The SPARK operating budget is funded through three sources: public (including grants and government and municipal funding); academic (University of Michigan, Eastern Michigan University, and Washtenaw Community College); and private (corporate contributions, foundation grants, and sponsorships). A portion of the public funding is provided by the State of Michigan through an annual contract with the Ann Arbor/Ypsilanti SmartZone (LDFA) for support of startups, and general fund allocation for business development activities, specifically, attracting and helping established businesses grow in this region. SPARK also receives funding from the state through the Michigan Economic Development Corporation (MEDC), and Michigan Works! Southeast. Washtenaw County also provides public funding from the general fund to support business development. Ann Arbor SPARK operates its SPARK Central Innovation Center under contract with the LDFA. The SPARK East Innovation Center is also supported by the LDFA, and by a grant from the MEDC. MEDC funds are used to administer the Michigan Pre-Seed Capital Fund, additional funding for the SPARK East Innovation Center, support for the Greater Ann Arbor regional marketing efforts, and support of regional talent attraction efforts.

Infographic In 2001, the Michigan Economic Development Corporation (MEDC) created 11 SmartZones throughout the state, including Ann Arbor/Ypsilanti. While SmartZone is the programmatic name given by the Michigan Economic Development Corporation (MEDC), the district is technically called the Local Development Finance Authority (LDFA). In August 2017, the Michigan Department of Treasury awarded a 15-year funding extension to the SmartZone designated to support entrepreneurial activity in Ann Arbor and Ypsilanti. The Ann Arbor/Ypsilanti SmartZone was one of only three in Michigan whose funding was renewed for a 15-year period. The state provides money to the LDFA specifically for economic development, for the purpose of creating new companies and diversifying the economy. This funding is made available from a tax increment financing (TIF) district that captures a small amount of incremental property tax increases. The Ann Arbor/ Ypsilanti SmartZone is funded by tax revenue collected within the geographic boundaries of the Ann Arbor DDA. The tax capture is based on the increase in taxable value due to new development and appreciation above the base year of 2002. So in effect, the state funds the LDFA which then provides SmartZone funding. The Ann Arbor / Ypsilanti SmartZone (LDFA) received approximately $2 million of revenue in FY2014. Per Ann Arbor SPARK’s LDFA contract, SPARK is required to report to the LDFA every quarter on our results, including specific metrics such as the number of companies that received services that were funded through the LDFA funds. Here is the most recent annual report.  

The City of Ann Arbor chose to outsource economic development to Ann Arbor SPARK at a rate of $75,000 per year rather than staff it internally or not have it covered at all. This aligns with economic development best practices, consolidating resources to ensure the most efficient and effective use of funds. These funds support efforts related to business expansion and attraction plus marketing the city as a great place to locate a business. Ann Arbor SPARK reports out as part of the city council’s annual budget process, detailing how the funding received from the city was used. As the economic development engine for the region, many other municipalities within Washtenaw County also provide funding to SPARK. Throughout the state, it is customary for other municipalities to contract out for economic development services. For example, Livingston County (population 182,000) through its Economic Development Council has chosen to contract SPARK for economic development services, at an annual amount of $367,028 during the most recent year.

A provision does exist in our agreements that companies will repay any LDFA funding if they leave Ann Arbor within one year of completing work associated with any loans or grants. Ann Arbor SPARK is earnest in collecting from those companies to the extent that the time and actual expense related to collecting repayment isn’t greater than the amount of funding to be collected.

We are not required to share our audited financials; however, in the spirit of transparency, we share them here.

Ann Arbor SPARK reports all possible conflicts of interest as part of its commitment to organizational transparency. As a non-profit, the IRS Form 990 examines whether a non-profit has a written conflict of interest policy as well as the process for managing conflicts of both staff and board members.

Yes. The IRS routinely audits tax-exempt organizations to ensure compliance with federal tax requirements. Ann Arbor SPARK was selected for a routine audit of its 2012 Federal 990 return, which was reviewed by the IRS Tax Exempt and Government Entities Division. As a result, Ann Arbor SPARK’s return was accepted as filed, and we continue to qualify for exemption from Federal income tax.

No, SPARK is not a venture capital firm. In 2007, SPARK was selected by the State of Michigan to administer the Michigan Pre-Seed Capital Fund which was established using 21^st Century Jobs Fund dollars. In 2014, the state established a new fund, the Michigan Pre-Seed Capital Fund II (MPSF 2.0), which is administered by Invest Michigan. SPARK still serves as the administrator of the original Michigan Pre-Seed Capital Fund portfolio companies. SPARK does not engage in the decision-making process or perform any of the due diligence or valuation assessments that a venture firm would do. The fund does not hold board seats or seek exit opportunities for the companies in the portfolio as a venture firm would do. SPARK’s involvement purely is as the fiduciary and administrator of the program. This program is an economic development tool to help retain talent and great startup businesses in the state.

The Michigan Angel Fund (MAF) is a for-profit, pooled, and professionally managed angel fund. MAF was established by Ann Arbor SPARK and supported by the Michigan Economic Development Corporation to help finance early-stage companies in the state of Michigan and to attract additional angel investors to the Michigan entrepreneurial ecosystem. The fund helps move companies from public funding to the private sector. As the managing member of MAF, Ann Arbor SPARK coordinates screenings of fund applicants, conducts due diligence, and works with the New Enterprise Forum to prepare companies for their investor presentations. Ann Arbor SPARK also works with business accelerator organizations around the state to identify quality companies for potential MAF investment. MAF is a distinct entity, of which Ann Arbor SPARK is the managing member. The Michigan Angel Fund has no impact on SPARK’s non-profit status. It is not uncommon for non-profits to have for-profit subsidiaries, usually to help support the non-profit. The IRS allows this as long as the for-profit entity is paying taxes on gains. 100% of the funds invested by the Michigan Angel Fund are private funds. No public money is invested in the companies. If successful, the fund will return capital to the investors until they are made whole, then there is a 20% carry-on profits that go to SPARK (the organization). These profits do not go to any individual (e.g. a SPARK board member), but instead, help support MAF.

Ann Arbor SPARK’s work is in direct response to the new and existing businesses in our region requiring assistance with expansion, investment, and talent in our region. To meet the needs of our growing economy, Ann Arbor SPARK has expanded its businesses and startup services every year. Recent examples include opening new space in our SPARK Central Innovation Center to accommodate second stage entrepreneurs as well as provide a “soft landing” space for international companies looking to establish a presence in the U.S. Another key area where SPARK has expanded services has been talent initiatives. As companies grow here, so does the demand for skilled and high-tech talent, and ways to reach potential employees. Ann Arbor SPARK has grown its talent initiatives to include annual, marquee events Tech Trek and Tech Homecoming, as well as talent mixers.