In Reading, Pa., Few Nonprofits Can Add Much to Mayor’s PILOTs Pile

June 8, 2012; Source: Reading Eagle

When one reads about Reading, Pa., the desperation of distressed urban centers looking to nonprofits for nickels and dimes to help defray the costs of municipal services is just so telling. At a time when more Americans live below the poverty level than at any time in the past 52 years, Reading has earned the title of America’s poorest city with a population above 65,000. Of Reading’s 90,000 inhabitants, 41.3 percent are below the federal poverty level.

Two months ago Reading Mayor Vaughn Spencer sent letters to nonprofits in the city asking for voluntary payments in lieu of taxes (PILOTs). Now the mayor has a new strategy in mind, the Mayor’s Partnership for a Cleaner City. Rather than asking for PILOT payments, he has mailed letters to 240 nonprofits in the city asking them to do clean-up projects or adopt-a-block or adopt-a-park efforts to supplement the efforts of the city’s Reading Beautification, Inc. Rather than PILOTs, this is a strategy of SILOTs—services in lieu of taxes.

Mayor Spencer hasn’t dropped his request for PILOTs, but he knows that Reading’s nonprofits aren’t necessarily financially flush to make cash payments. One church has already announced a neighborhood clean-up in its vicinity. Regarding PILOTs, 14 nonprofits have said they will start making payments and some others have upped what they were already giving. But it is small money, with a total of $38,000 in new or increased PILOTs received so far in response to the April letter.

This once prosperous Berks County municipality is hardly saturated with wealthy nonprofits. There are some colleges, some Catholic high schools, and two local hospitals, but much of the local nonprofit sector is comprised of service organizations doing their best to serve the residents of this poverty-stricken community, such as the Salvation Army of Reading, Reading Risk Reduction (helping people with AIDS), Opportunity House (homeless services), Neighborhood Housing Services, some religious groups providing homeless services, Centro Hispano Daniel Torres (immigrant rights), Berks County Women in Crisis, and the Greater Berks Food Bank.

That’s the reality facing a community like Reading. It’s not a matter of a bunch of wealthy, endowed, tax-exempt property owners going toe-to-toe with the mayor. For the most part, it’s a nonprofit sector largely devoted to trying to meet the needs of this terribly poor community—just like the city administration is trying to do. When Mayor Spencer looks to the nonprofit sector for PILOTs and SILOTs, he is looking to get drops of blood from a rock.—Rick Cohen