Skip to Navigation
University of Pittsburgh
Print This Page Print this pages

January 26, 2012

Will nonprofits continue city contribution?

upper campus view-downtown_colwell

Will local nonprofits, including Pitt, that are exempt from most property taxes continue to make voluntary contributions to the city? Right now, that’s an open question, according to a Pitt official.

Although the City of Pittsburgh’s 2012 operating budget approved by City Council last month estimates voluntary contributions from the local nonprofit community as totaling $3.17 million, that support has not been approved by the nonprofits themselves.

An agreement between the city and the Pittsburgh Public Service Fund, a consortium of 46 local nonprofits including the University, to donate $5.2 million over a two-year period expired Dec. 31 and as yet has not been extended. “There are no formal commitments to the city at this time,” G. Reynolds Clark, Pitt vice chancellor for community initiatives and co-chair of the service fund, said this week.

In 2005, the Pittsburgh Public Service Fund, then a consortium of more than 125 nonprofits, agreed to pay a total of $13.25 million over three years in lieu of taxes to aid the cash-strapped city.

Following a two-year hiatus (2008-09) caused by the inability of City Council and the fund members to agree on the amount of donations, a two-year agreement was reached pledging donations of $2.6 million in 2010 and again in 2011.

The contributions for 2010 have been paid in full, while the fund continues to collect the pledged funds for 2011, Clark noted. “Some [nonprofits] make only one payment for the year and usually pay at the end of the year. Those are the contributions that we are currently receiving,” he said.

Clark declined to specify Pitt’s share of the fund’s donations. “One of the guidelines of the fund is that we will not disclose the contribution amount of any participating nonprofit organization,” he said.

He noted that the number of fund participants had dwindled to 46 in the recently expired agreement. “When the first fund was established for the years 2005, 2006 and 2007, the city’s financial condition was very precarious. Nearly 130 member organizations of the nonprofit community stepped up to help. Now that the city has made significant improvement in its financial situation, some nonprofit organizations do not see the critical need to [contribute], but instead use those dollars to fulfill their respective missions,” Clark explained.

He declined to speculate whether a new agreement would be reached. “At this time there have been no formal discussions regarding a new agreement,” Clark said this week. But he did say: “It is important to the University that we are in a fiscally sound city and thus we will do what we can to help the city achieve that level of stability.”

He further noted that, independent of the Pittsburgh Public Service Fund, Pitt supports the city with services and programs, including providing a police force that extends protection to the neighborhoods surrounding the campus. “Over 40 percent of the calls that Pitt police respond to are non-University related. This amounts to nearly $5 million in annual costs to the University but provides an incredible service to the city,” he said.

The lack of an agreement between the service fund and the city represented a temporary stumbling block for getting final approval of the city’s $459 million 2012 operating budget by the Intergovernmental Cooperation Authority (ICA), a state-appointed body overseeing Pittsburgh’s finances since 2005.

ICA rescinded its conditional approval of the budget on Dec. 23.

But, according to a statement released this week by the mayor office, ICA re-approved the budget following further communications between the authority and the mayor.

City officials previously had expressed optimism that a deal between the city and the nonprofits can be brokered. At a press conference earlier this month, the mayor’s spokesperson, Joanna Doven, said that informal discussions between the two entities indicate that an agreement will be reached.

City Controller Mike Lamb noted that it is not out of the ordinary for the city’s budget to include estimated revenues that are expected but not ratified formally at the time the budget passes City Council.

—Peter Hart

Leave a Reply