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Cascade: No. 62, Summer 2006

A State Tax-Credit Program Becomes Even Better: CSP Becomes NPP

Beverly Coleman is not the kind of person who stands by and watches things happen. So in the fall of 2003 when she realized that the first partnerships of the 10-year Comprehensive Services Program (CSP) would end beginning in 2004, Coleman, program director of the Philadelphia Neighborhood Development Collaborative (PNDC), a citywide funders’ collaborative for neighborhood revitalization, took action. She convened a working group of key participants in the CSP, including banks, corporations, nonprofit community-based organizations (CBOs), state government, and community leaders around the state to make sure that the program had not only a future but also a bright one.

Several banks that had participated in CSP recognized that the program needed some fine-tuning to make it more attractive for banks and other corporations to invest. As diverse as the corporate and nonprofit partners are, under Coleman’s leadership they came together to improve CSP based on the common belief that transforming neighborhoods into healthy communities not only helps local residents but also provides substantial benefits to the entire region. The group included the Pennsylvania Department of Community and Economic Development (DCED), which administers the program, as well as the Pennsylvania Department of Banking.

The Original Program: The Comprehensive Services Program

CSP, a statewide program, was created in 1993 to encourage businesses to enter into long-term partnerships with CBOs, which develop comprehensive revitalization plans.1 The program sought collaboration among for-profit businesses, CBOs, and government agencies to improve the quality of life in distressed areas. Under the program, corporations made 10-year commitments to CBOs and provided cash and certain in-kind contributions. In turn, they received credits for 70 percent of their contributions against state business taxes, up to $350,000 per year.

A report prepared by PNDC states that as a result of CSP more than 1,600 housing units for rent or purchase have been developed or rehabilitated in Philadelphia. In addition, CSP-supported programs have enabled more than 4,000 Philadelphia residents to be trained or placed in jobs, created child-care centers and, in some neighborhoods, have lowered crime and high school drop-out rates and rid parks of drug dealers.

Perhaps most significantly, CBOs have learned to leverage CSP investments, resulting in nearly $17 in outside funding for each dollar in contributions made by their corporate partner. For example, Project H.O.M.E. CDC worked with its CSP partner, Crown, Cork & Seal, to raise more than $11 million for the development of a new community computer and technology learning center.

The Revised Program: The Neighborhood Partnership Program (NPP)

After nearly a year of discussions, the working group made several recommendations that were adopted by DCED and published in December 2004. Program changes are summarized in accompanying table. The changes lowered minimum corporate contributions and reduced the minimum partnership term from 10 to five years, making the program more accessible to community banks.

“Flexibility is the hallmark of the new NPP and there are no reams of paperwork to be completed,” said Ken Klothen, deputy secretary for community affairs and development in DCED. Once the investment is certified by Klothen’s office, the Pennsylvania Department of Revenue issues the credits. “We hope the changes will enable more organizations across the Commonwealth to use it,” Klothen said.

The benefits of CSP and its successor, NPP, extend beyond corporate partner contributions. Corporations share valuable expertise as well as grant funds, and CBOs offer structured volunteer opportunities for corporate employees and help train residents who will later enter the work force. Corporate partners also obtain favorable publicity and goodwill, help promote stable and healthy communities, and may add business relationships.

The theme of corporations and CBOs working together for their mutual well-being was reiterated by several speakers at an event on NPP revisions held May 16 at the Federal Reserve Bank of Philadelphia. As J. William Mills III, president of PNC Financial Services Group in Philadelphia/Southern New Jersey and an NPP advocate, succinctly put it: “What is good for our communities is good for PNC.”

For information on NPP, contact DCED’s Center for Community Empowerment at (717) 787-1984. Beverly Coleman, program director of PNDC, can be reached at (215) 665-2644.

Program Changes

Program Feature
CSP
NPP
Per (investor) partner
Minimum annual contribution
$250,000
$50,000
Per project
Minimum annual contribution 
$250,000
$100,000
Number of investor partners
One primary
Up to three
Minimum length of commitment
10 years
5 years
Focus
All program areas2
Program areas with highest priority3
Oversight body
Board of directors
Neighborhood partnership
advisory committee
Goal
Transforming community
Improve quality of life & sustain community development

Source:  The Neighborhood Partnership Program, a publication created by the Philadelphia Neighborhood Development Collaborative and produced by Sage Communications Partners. The publication was based on a report prepared by DCED.

Partnerships Under the Former Comprehensive Services Program4

Corporate Partners Community-Based Organizations
Altoona
M&T Bank
Investment Savings Bank
Reliance Savings Bank
Greater Altoona Economic Development Corporation
Bethlehem
M&T Bank Community Action Development Corporation
Carlisle
M&T Bank Hope Station Opportunity Area
Harrisburg
Allfirst Bank Community Action Commission
Lancaster
M&T Bank The Inner City Group
Philadelphia
Allstate Insurance Company Fern Rock/Ogontz/Belfield CDC
M&T Bank Frankford CDC
Mellon Financial Greater Germantown Settlement
Greater Germantown Housing Development Corporation
Ace American Insurance Company
Comcast Corporation
Impact Services Corporation
Citizens Bank Nueva Esperanza Inc.
PNC Bank Norris Square Civic Association
State Farm Insurance Co. People’s Emergency Center CDC
Crown Cork & Seal Company Inc. Project H.O.M.E. CDC
PECO Energy Company The Partnership CDC
Wachovia Bank Women’s Community Revitalization Project
  Hispanic Association of Contractors and Enterprises Inc.
Tasty Baking Company Allegheny West Foundation
Pittsburgh
Dollar Bank Manchester Citizens Corporation
Citizens Bank Hosanna House Inc.
PNC Bank Southside Local Development Corporation
Mellon Bank Bloomfield-Garfield Corporation
H.J. Heinz Company Northside Leadership Conference
York
Waypoint Bank
Susquehanna Pfaltzgraff Company
Crispus Attacks Community Development Corporation CDC

Partnerships Under the New Neighborhood Partnership Program

Corporate Partners Community-Based Organizations
Allentown
Air Products and Chemicals Inc
PPL Corporation
Housing Association & Development Corporation
Easton
Easton Hospital
Lafayette Ambassador Bank
Community Action Committee of the Lehigh Valley, Inc.
Erie
Erie Insurance Group Bayfront East Side Task Force
Philadelphia
Ace American Insurance Company Impact Services Corporation
Beneficial Savings Bank Archdiocese of Philadelphia, Office for Community Development
PNC Financial Services Group Project H.O.M.E.
PECO Energy Company The Partnership CDC
York
Glatfelter Insurance Group Crispus Attucks Association
Kinsley Construction  
Susquehanna Pfaltzgraff  
People’s Bank
York Building Products Inc.
M&T Bank
Crispus Attucks YouthBuild Charter School
Fulton Bank Spanish American Civic Association
Glatfelter Insurance Group
The Wolf Organization
PeoplesBank
YWCA of York

Source: Pennsylvania Department of Community and Economic Development. Information shown is as of June 2006.

  • 1 CSP was created under the Neighborhood Assistance Act of 1967. 
  • 2 CSP and NPP program areas include community services, crime prevention, education, job training, and neighborhood assistance. (Neighborhood assistance is defined as financial assistance, labor, materials, or technical advice to aid in physical improvements for all or part of a distressed community.)
  • 3 Program areas with highest priority are based on the neighborhood partnership plan, which prioritizes projects according to relative need and existing community assets.
  • 4 Some CSP partnerships are still operating, while others have been completed.

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Contact Us

Federal Reserve Bank of Philadelphia
Community Development Studies and Education Department
Ten Independence Mall
Philadelphia, PA 19106-1574

(215) 574-6458 – phone
(215) 574-2512 – fax
info.communitydevelopment
@phil.frb.org

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