Michigan distributes $100 million in start up capital

The state of Michigan gave out 61 grants totaling $100 million to several groups this past week. The grants were part of the state's new 21st Century Job Fund. Reminiscent of the week's readings on the competitive nature between nonprofits and for-profits, the 61 grants were distributed to both for-profit and nonprofit organizations. The organizations could have proposed to use the money for any type of project--though most went to innovative medical proposals. The most interesting part of the grant requirements is that there is an expected rate of return that the organizations must bring to the state in exchange for the start up capital.

Do you think this approach will be helpful for new nonprofits? It does give them the much needed start up funding, but is asking them to become self-funding in addition to giving back to the state too much?