Penn and other major local nonprofits, which once made millions of dollars in voluntary payments to Philadelphia, pay nothing today. In a 1995 deal then heralded by the administration as a way to “pay our fair share,” Penn agreed to make a voluntary annual contribution of $1.93 million to the city. The agreement had been the city’s attempt to recoup the cost of maintaining essential city services from Penn, which — like most nonprofits — does not pay taxes on much of the property it owns. These payments in lieu of taxes, or PILOTs, have been struck between many nonprofits and local governments around the country, most prominently with hospitals and universities. Penn’s 1995 PILOT program — a five-year initial commitment — was not renewed. Even though Penn makes no voluntary payments today, administrators say the University contributes to the city in many other significant ways.
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