She’s chief of the richest Rotary Charity on the planet, and lucky for Traverse City, she wields the power for local good. Meet Marsha Smith, and consider what an oil field can do for a small town. Find the original layout in the June 2015 issue of Traverse, Northern Michigan’s Magazine.

Greg Stone and his friend Terry Gorton shared a vision to take the most deeply addicted alcoholics off the Traverse City streets and provide them with a warm place to call home. They’d be supervised and expected to follow five simple house rules, but those rules wouldn’t require abstinence.

Stone sent out a trial balloon in the community going so far as to form a nonprofit called Stones House. But the idea took a beating in the media and was going nowhere. The two men met on a crisp November day in 2012 to discuss how to go forward.

“I kept saying, I’ve got to go see Marsha Smith. I’ve got to go see her,” says Stone, a casual kind of guy with a penchant for big hugs and even bigger visions. But budgets? Donor recruiting? Grants? Not so much.

“So one day, we were at a downtown meeting at Grand Traverse Pie Company, and I said, ‘Let’s go see if Marsha Smith is in,’” Groton recalls. “We had no appointment. Greg is just walking around with his dreams.”

When Stone invoked the name Marsha Smith, he was referring to the eminently approachable, redheaded executive director of Rotary Charities of Traverse City. Smith often looks slightly amused, and humor serves her well as things can get testy at the money-end helm of what’s often called the “richest Rotary Club in the world.”

So let’s clarify. It’s not the Rotary Club, but Rotary Charities, a separate public foundation, that holds the Rotary riches and is overseen by a 10-member board drawn from the Traverse City Rotary Club.

Just how much money? Throughout the years, Rotary Charities has collected more than $100 million in profits gushed from oil and gas wells drilled on a 450-acre tract of land in the Spider and Rennie Lakes area.

The fortune was a fluke. Rotary Club of Traverse City bought the land in 1923 and later leased it to the Scenic Trails Council Boy Scouts of America for 99 years for the sum of one dollar. Wisely, Rotary Club kept the mineral rights. Then they struck oil in the mid-1970s.

Seeing there was a small fortune to be made, Rotary Club formed the nonprofit Rotary Charities in 1978 to accept and administer the oil and gas revenues.

Since then, Charities has given away an astonishing $53 million to Traverse City and regional nonprofits. Smith calls Rotary the “secret sauce” that has helped the city and region thrive, as other downtowns in Michigan have crumbled. Traverse City would be a far shabbier place without its help. The Park Place Hotel might well be shuttered. The State Theatre might not have re-opened. The City Opera House and Old Town Playhouse may never have been restored.

These are just the brick and mortar projects. Millions more have gone toward preserving land, strengthening families, educating the underprivileged, and building affordable housing.
Someday, mineral revenues will trickle to nothing, but for now, they still net $500,000 annually, about a third of peak profits. Rotary carefully preserves its corpus, which now stands at $46.6 million, spending only 4.5 percent of the portfolio’s market value (using a five-year average).

To offset the diminishing oil profits, Charities decided in 2003 to form a management support program called NorthSky. The philosophy: help nonprofits help themselves. The formal term is “capacity building,” which, in layman’s terms, means soul searching, nailing down a mission, and strategizing donor and grant support. NorthSky also trains boards, helps resolve conflicts, fosters collaboration and has even brokered mergers. In other words, NorthSky gives nonprofits a fishing pole, but not a lot of fish.

Stone was seeking the help of NorthSky. He had painfully realized that StonesHouse, was in serious need of guidance. So he and Groton walked to the Chamber of Commerce Building and up to the second floor. The receptionist ushered the two into Smith’s spacious office, which oversees Grand Traverse Bay, and where Smith has proudly displayed the taxidermied “Rocky,” a 10.6-pound brown trout that snagged her first place in a fishing contest.

Smith heard the two out.

“She said, ‘Great idea,’” Stone recalls. “‘But you’ve got to get your act together.’” And then she flashed her brilliant, wide smile to soften the message.

“That’s what she told me. And she was right. And then things happened,” Stone says.

And they happened quickly. StonesHouse received an $8,000 capacity grant from Rotary Charities, which provided consulting and board training. StonesHouse expanded the board, and scored Jane Hayes as chairwoman, a key recruit that Smith had suggested. Finally, board member Karen McCarthy wrote a $35,000 grant proposal to the Michigan Department of Community Mental Health, which was later approved. “Marsha was our first validation that this was really important, that something needed to be done, but first, things had to be in order,” Stone says.

Re-christened Dann’s House, the shelter opened August 1, 2014, in Garfield Township and is now home to six formerly homeless men. One of its earliest residents died of stage-four lung cancer soon after he moved in. “He was in hospice at least,” Stone says. “We took care of him. He died with dignity. He didn’t have to die under the bridge.”

Life for Smith started in St. Joseph, Michigan. She grew up in a tri-level house her parents built in 1962 on a bluff overlooking the Lake Michigan coastline. Smith loved to rise early and swim, and she often sailed in the St. Joe harbor. Her passion for the outdoors imprinted into her DNA, a reason she later chose Traverse City as home.

Smith’s dad was a Whirlpool executive, and her mom stayed at home raising Smith and her younger sister and brother. Smith describes her mom as a “strong woman” who doled out advice in her distinct Kentucky accent. But life changed at age 16 when Smith’s father died suddenly of a heart attack. Her mom needed a job, but prospects looked grim. She had last worked as a telegraph operator for Western Union.

“She had an obsolete job and obsolete skills. Fortunately, Whirlpool hired her and trained her, and she adapted just fine. In fact, she was more comfortable working there than being the wife of an executive,” Smith says. “But what she really emphasized to us after that is you go to school, not to get an education but to get a job. You need the education and training to support yourself.”

But Smith, a pretty, fun-loving redhead who could have earned straight A’s if she wasn’t quite so sociable, was interested in more than getting a job. Early on she was imbued with a spirit of service, shaped from her years as a Girl Scout and Catholic school education. “They taught a commitment to community and serving the poor. They call it social justice now,” she says.
An equally compelling lesson was the devastation to Benton Harbor after her family and thousands of others moved across the river from Benton Harbor to St. Joseph. “In Benton Harbor, we had lived in a neighborhood that reminds me of Central Neighborhood. You could walk and ride your bike everywhere,” she says.

After the middle-and upper-middle-class white families emptied out of Benton Harbor, only the poorest families and a bare bones tax base remained. The city could no longer adequately fund its schools, infrastructure or services. “Benton Harbor went into a total downslide. I don’t know if it was seeing the extremes of what happens to a community neighborhood when a community deserts it, but I’ve never taken this place (Grand Traverse) for granted. The natural beauty. I never wanted to see that happen here.”

While in high school, Smith pondered her mom’s advice and career options. At that time, women could most easily get jobs in nursing, teaching and journalism. Smith dismissed medicine—she had fainted as a Candy Striper just helping a patient onto a commode. And she had little patience tutoring her 8-year-old brother. She decided on journalism at Michigan State University. Her adviser, though, didn’t think she was cut out for the job. “I decided to investigate how many MSU football players graduated. Not their grade point, but how many actually graduated. I went to every possible source. No phone calls returned. I went into my adviser two weeks before it was due. I told her, ‘I am really worried. This is all I’ve got.’ She says, ‘You don’t get this, do you kid? You think you don’t have a story. That’s your story. The fact you can’t find out is the story.’

“So she said to me later, ‘You’ve gotta face it. I don’t think you’ve got it. You’re never going to cut it. You care more about the people than you do about the story.’ That was a very wise insight. You know what? She was right.”

Still, Smith applied at the Traverse City Record-Eagle. Her fiancé had persuaded her to move to Traverse City, and Robert Batdorf, the newspaper owner, offered her a reporter’s job to start immediately after she graduated in 1973. Smith countered with a condition. She wanted to take the summer off since she was getting married.

“He told me, ‘You can take it off, but I can’t guarantee you the job will still be there,’” she says. “So I took it off, and then when I went in again, he didn’t own the paper anymore.”

But Batdorf did her a big favor. He invited her to lunch, and they walked together from the Record-Eagle to Bill Thomas’s restaurant (Sorellina’s now). It was Smith’s first glimpse of Traverse City’s “good ole boys” at work.

“That’s where all the local power guys met: Stacey’s for breakfast and lunch at Bill Thomas’s. Smith was the only young woman in the room, and Batdorf said to the group, “Guys, I have a problem. I offered this cute young thing a job. I don’t have one for her anymore. Anybody got anything?”

Les Biederman said, “I do,” and invited Smith to follow him to Midwestern Broadcasting, a media conglomerate that at the time included two TV stations, five radio stations, and a cable company.

Biederman’s plan was to create content to sell to the then-burgeoning cable channels, and Smith’s new job was to help build up the necessary capital. She would find free 8-millimeter films the cable channels could play, ranging from STP Racer’s Edge to U.S. Army Today. She wrote synopses of the shows and packaged them into one-hour programs for shipment around the country.

Meanwhile, she started attending a women’s RAP group, a women’s consciousness-raising group that “rapped” about books, women’s issues and politics. “There were several of them in Traverse City, and there was a lot of cross pollination among women,” Smith says.

The many RAP groups eventually gathered together at the old library and Smith led the initial goal-setting session. The group decided they needed a place of their own.

“That was the birth of the Women’s Resource Center,” Smith says. For two years Smith wrote grants for staffing and she became one of the Women’s Resource Center’s first employees—a move that launched her career into nonprofit fundraising.

Smith went on to raise funds for Paul Oliver Memorial Hospital in Frankfort, Traverse City Osteopathic Hospital and Interlochen Center for the Arts.

Outside of work, Smith became involved as a county planning commissioner in the 2020 Grand Traverse County visioning process, an early foray into thinking hard about what Traverse City should look like.

“We did 20 sessions on what the county should look like in 2020. That laid the groundwork. I took that to the Grand Traverse County Board of Commissioners, and it got poo-pooed at a couple of levels, but I finally got the county and chamber and Rotary to put up some money to do an independent public opinion survey to test the principles. It came back really strongly in favor of preserving natural resources, protecting water quality, revitalizing downtown—all of these later became tenants of the Grand Vision.”
They also became principles for the development guidebook called New Designs for Growth.

“I think it built community consciousness, a culture,” Smith says. “They’re intangible in many ways, but they’ve led to a lot of individual and group actions that you can’t necessarily directly route back there. It’s more of an ethic to how a community grows. You build the momentum, you build the consciousness. None of this happens in a vacuum.”

While fundraising at Interlochen, Smith’s life took a major turn. She was going through a divorce, and with her son nearing graduation, Smith did some soul searching. She began to wonder if she should move from Traverse City or if she should continue to raise money for the rest of her life. She considered the option of going to the “other side of the desk”—the task of giving money.

That’s when she called on her friend Rob Collier, then CEO of Rotary Charities.

“I told him, ‘I’m thinking of making a move to the other side of the desk. How should I educationally prepare?’” she says. “He said, ‘I got it! Meet me tomorrow at the Park Place. I’ve got the job for you!’”

Collier told her about Grand Traverse Regional Community Foundation, a nonprofit formed by Rotary to work with donors to build permanent endowment funds for area causes. It needed a development director. She was cool to the idea, but Collier was extremely persuasive and convinced her to take the job.

Smith remembers her first Rotary Charities board meeting when Collier introduced her as the Community Foundation’s development director in 1993. She was 42 years old and no longer “the cute young thing,” but a confident woman who had successfully wrested millions of dollars from some of the world’s richest philanthropists.

“There was a break in the meeting, and one of the board members said, ‘Marsha, will you get me a cup of coffee?’ There was dead silence, so I got up and I got the pot of coffee. The whole room is still dead silent. I brought it over to him, and I smiled sweetly and said, ‘Would you like it in your cup or in your lap?’ That was the last time anyone asked me to pour them coffee. It was just playing along with the boys, just kind of fun,” she says.

Collier left his Rotary Charities position in 1995 to head the Michigan Council of Foundations and recommended that Smith replace him, which she did, first as interim and then as permanent CEO.

One of Collier’s legacies was incubating the Grand Traverse Regional Land Conservancy. He explained in a phone interview that the desire to preserve land was sparked by a Detroit Free Press article.

“It said Traverse City was being ruined by unregulated growth and no planning, and it was simply going to become a planning mess,” he says. “That perturbed a lot of Rotarians.”
And it led to the first major decision to examine how Rotary Charities could become a strategic partner and leverage the combined interest of local government, business and nonprofits to make things happen.

In 1992, Rotary launched the Grand Traverse Regional Land Conservancy with a $100,000 grant.

“That was a big grant and a very risky grant and everyone agreed we needed to do it. It was all about making sure it was viewed as a multi-county effort,” Collier says. “We had folks from four counties involved, and it led to a decision to recruit Glen Chown as the first director, and the rest is history. It was a wonderful step to keep land in private ownership through the easement tool and public partnerships.”

It has since protected more than 38,000 acres and 114 miles of shoreline along the “region’s exceptional rivers, lakes and streams,” according to the conservancy’s website.
Tom Gilbert jokingly calls himself “Mr. Marsha Smith” because his wife is so well known in town.

But on Halloween night in 2002, he slowly walked two blocks home from the courthouse, thinking about how he was about to shatter his wife’s even-keeled life. They both sat down in the kitchen, and he confessed that someone had witnessed him inhaling a joint at a Rolling Stones concert 19 days earlier, and now his judicial superiors knew. He could lose his $138,272 job as district judge.

“She started crying. It was at the kitchen table, and she started crying. My thought was, My life was over. That was my thought. That was my feeling. And in retrospect, it wasn’t over. It was just never going to be the same again.”

The crazy part, he said, was he had already decided to stop drinking three days before he’d learned his superiors had been alerted. Then again, he had tried to stop drinking before. He knew this time, there was no going back.

Smith and Gilbert had been married for just four years. The local media glare was on Gilbert. Jay Leno even made a couple of jokes at his expense.

Smith suffered as well, although her charities board supported her. They were sympathetic and suggested she take a few days off work. But when she returned, she still faced scores of Rotarians at their weekly Park Place lunch meeting, knowing they, too, were reading the editorial attacks on her husband’s decision to remain as judge.

The one thing they never asked her was if she was at the concert with Tom.

So was she?

“No!” She says, laughing. “He was going with his college boys, his (Michigan) Tech boys. When they get together, there is no female in her right mind who would want to go with them.”

In fact, Gilbert had purposely sat away from his college friends at the rock concert, thinking he didn’t want their rowdy behavior to reflect on him. But he didn’t exactly behave well, either. He quaffed down five beers on that sunny afternoon, enough to fuzz his judgment when a joint was passed down the aisle and reached his hand. He took a puff. And when it came back from the opposite direction, he puffed again.

An Elk Rapids couple was sitting closely enough to see what had happened and mentioned it to friends who worked in the courthouse. They, in turn, told their superiors. Then came the constant drumbeat of media that criticized Gilbert for staying on the bench after breaking the law.

Smith believes it was an issue of second chances.

“He was honest and admitted his mistake, and he apologized. He came back, and worked a really strong program of recovery. It could have been a story that helped other people learn from his experiences, but that part was never played out in the media,” she says.

Before Tom went into treatment at a Hazelden Betty Ford Foundation treatment center, the counselor interviewed him over the phone and asked what his wife thought about the prospect of him never drinking again.

Smith told Tom: “I’m scared. Tell the counselor I’m scared that you are going to change.”

“Well let’s hope so,” the counselor told her husband.

What Smith meant was she was afraid that her husband wasn’t going to be fun anymore. That he’d lose his joy.

“I was afraid he’d become what my mother used to call a teetotaler. She used to say, ‘If you took the cure, you’d become a stick-in-the-mud, not spontaneous, judgmental.’ I was worried that all the wonderful things I loved about him would change.”

He didn’t change, but life did change—for both of them. They became healthier. They began swimming and working out in the gym. They lost significant weight. Smith sips water during meetings, uses the stairs, and walks to Park Place Rotary meetings, even in a downpour.

“I believe in exercise with a purpose,” she says.

Each morning the two sit on the sofa in their home and read meditations, including those from Mark Nepo’s The Book of Awakenings, a combination of humanism and Buddhism.
After collecting a master’s degree in addiction counseling, Gilbert slowly built success with Touchstone Intervention and Professional Services (touchstonerecovery.net) that helps others achieve sobriety. He recently started a nonprofit organization called TC Retreat that will provide quality sober living homes for those in recovery.

In retrospect, Smith calls the past 10 years an amazing, positive transformation.

“One of the really key lessons that I learned and that Tom learned was, what other people think of us is none of our business. So when you’ve been a public persona for a long time and you base your own self-image on what people feed back to you, you realize that no matter what you do, people are going to think what they’re going to think. In many ways it’s freeing.

There is only person I can change and that’s myself.”

Smith is now thinking about her most recent passion before heading to retirement in a few years—affordable housing.

The Rotary has arguably improved the quality of life here to such a degree that Traverse City has become too pricey for those who work here. They often must drive in from the outlying rural areas. Charities has already invested more than $2 million over the years, but the time has come for a major initiative, she says.

“It’s a huge issue,” she says.

One that will require innovative thinking. And some of that “secret sauce.”

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The Quiet Engine of Traverse City

Rotary Charities’ gifts are listed in the newspaper each year with little fanfare, so we tend to lose sight of the cumulative impact. Here is an abbreviated list of where Rotary Charities has lent its support over the years:

• Grand Traverse Regional Land Conservancy
• The Biederman Cancer Treatment Center and the
Cowell Cancer Center
• The Dennos Museum at Northwestern Michigan College
• The Park Place Hotel 
 (The largest grant to date, Rotary invested in the downtown hotel in the wake of the Grand Traverse Mall opening)
• NMC’s University Center
• The Women’s Center at Munson Medical Center
• Twin Lakes 4-H Camp
• The Traverse City Bayfront Redevelopment
• Grand Traverse Bay YMCA
• The Grand Traverse Regional Community Foundation
• Old Town Playhouse
• Traverse City Visitor and Convention Bureau
• Home Stretch 
 (supports low-income housing)
• The Goodwill Inn
• Inland Seas Education Association
• Munson Medical Center’s Hospitality House
• City Opera House
• The Grand Vision 
• NMC Water Studies Institute