Seeking Neighborhood Revitalization in Philadelphia: Using Tax Credits to Link the Private and Nonprofit Sectors

Case Solution

Howard Husock, Christine W. Letts
Harvard Kennedy School ()

In this case, the connection between public goals, the revitalization of Philadelphia’s crisis neighborhoods, and nonprofits is conveyed through an unusual vehicle. A Pennsylvania state tax credit program is designed to direct funds from private for-profit corporations to community community groups. The case describes the first five years of what is known as the Philadelphia Plan and a series of specific projects supported by certain companies in exchange for a reduction in state corporate taxes. High-profile projects include a homeless housing program supported by Crown, Cork, and Seal Corporation; a neighborhood home improvement program supported by Allstate Insurance; and a community development company and subsidized housing developer supported by Mellon Bank. The case implicitly raises the question of whether it makes sense or is effective for the state government to direct funds to nonprofits in this way; whether the government should facilitate such “tripartite” agreements (public, private, non-profit) that could increase the commercial profit of companies; whether public sector involvement in fundraising for nonprofits supports or discourages its mission. For students of urban distress, the question also arises whether the work of nonprofits such as those described in the case can be an effective means of improving distressed neighborhoods and how such improvement could or should be measured. Case number HKS 1578.0

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