Pennsylvania’s Neighborhood Assistance Program (NAP) offers nonprofit organizations an opportunity to attract private investment for projects that benefit low-income residents and economically distressed communities. By providing participating businesses with state tax credits of up to 65%, 90%, or 95% of their contributions, depending on the program and, in some cases, the length of their commitment, NAP creates a powerful incentive for corporate support of local projects.
Unlike traditional grant programs, NAP requires nonprofits to secure financial commitments from participating businesses before applying. With the next application cycle expected in spring 2027, organizations considering an application should begin identifying and approaching potential contributors now.
Understanding the Neighborhood Assistance Program
Administered by the Pennsylvania Department of Community and Economic Development (DCED), NAP encourages businesses to invest in projects that strengthen communities, expand essential services, and improve economic opportunities for low-income Pennsylvanians.
Rather than providing grant funds directly to nonprofits, the Commonwealth offers eligible businesses state tax credits for contributions to approved projects. The nonprofit receives the full contribution, and the business receives a tax credit that can substantially offset its Pennsylvania tax liability.
For example, a business contributing $50,000 to an approved project eligible for a 90% tax credit could receive $45,000 in state tax credits, subject to program approval and applicable tax requirements. The nonprofit would receive the full $50,000 to support its project.
The program includes four primary components available to nonprofit organizations, each supporting different types of projects and offering different tax credit incentives:
Neighborhood Assistance Program (NAP) — Offers up to a 65% tax credit. Supports a wide range of projects that improve conditions in distressed communities, including educational programs, workforce training, social services, crime prevention, housing improvements, and neighborhood revitalization.
Special Program Priorities (SPP) — Up to a 90% tax credit. Offers enhanced tax incentives for targeted projects that address state-designated priorities, including homelessness and housing insecurity, services for vulnerable populations, blight elimination, disaster or economic recovery, healthcare equity, rural community needs, and veterans’ services. Projects must demonstrate significant impact and emphasize partnerships and collaboration.
Charitable Food Program (CFP) — Up to a 65% tax credit. Supports food banks, food pantries, emergency food providers, and innovative initiatives that address food insecurity. Eligible contributions may include monetary donations or in-kind food donations.
Neighborhood Partnership Program (NPP) — Offers up to a 90% or 95% tax credit. Supports comprehensive, long-term neighborhood revitalization initiatives. To qualify for up to a 90% credit, participating businesses must commit at least $50,000 annually for five years. To qualify for up to a 95% credit, they must commit for six years or longer. These projects require a strategic plan, an advisory committee, and at least $100,000 in project funding.
The Neighborhood Assistance Act also includes a fifth component, the Enterprise Zone Program Tax Credit (EZP), which provides businesses with tax credits of up to 25% for qualifying investments in designated Enterprise Zones. Unlike the four components outlined above, EZP supports direct business investment rather than contributions to nonprofit organizations and operates under separate program guidelines.
Eligible applicants must be recognized 501(c)(3) nonprofit organizations whose projects are designed to benefit low-income individuals or distressed communities in Pennsylvania.
DCED evaluates applications based on factors such as project eligibility, community need, organizational capacity, secured funding, project readiness, collaboration, and anticipated outcomes. For the 2026–27 program year, DCED identified affordable housing development, affordable housing support services, and access to affordable and reliable childcare as priorities. Priorities for the next cycle will be set in the applicable program guidelines.
Why Securing Contributors Early Is Essential For The Pennsylvania’s Neighborhood Assistance Program
One of the most important distinctions between NAP and traditional grant programs is that nonprofits must identify their business contributors before applying for NAP.
Under DCED’s March 2026 guidelines, nonprofit applicants were required to submit a signed Contributor Commitment Agreement for each participating business as part of their application. Each contributor was also required to file an electronic tax clearance form with the Pennsylvania Department of Revenue by the application deadline.
Critically, nonprofits cannot add new contributors or change contribution amounts after the application deadline. Commitment forms received after an application is submitted are not considered for funding.
The 2026 application window for nonprofits opened March 16 and closed May 29. Although DCED has not yet announced the dates for the 2027 cycle, organizations should not assume they will have sufficient time to recruit contributors once the application period begins.
Securing business support can require multiple conversations, internal corporate approvals, budget considerations, and coordination with accounting or tax professionals. Businesses that regularly participate in tax credit programs may also establish their charitable giving budgets well before the application window opens.
Waiting until spring to begin these conversations could leave nonprofits competing for corporate contributions that have already been allocated to other organizations.
Early outreach also allows nonprofits to develop stronger project budgets, establish partnerships, and demonstrate the financial commitments and organizational readiness that DCED considers when evaluating applications.
What Nonprofits Should Be Doing Now
Organizations interested in pursuing NAP funding in 2027 should use the coming months to identify eligible projects and to begin cultivating relationships with potential contributors.
The first step is to define a project that meets the program’s eligibility requirements. Applicants should be prepared to identify the geographic area and population served, document the community need, set measurable outcomes, and develop a realistic project budget.
Once a project is identified, nonprofits should begin reaching out to current corporate supporters and prospective business partners. Eligible contributors generally include businesses authorized to operate in Pennsylvania and subject to qualifying state taxes, including certain pass-through entities. Businesses should consult their tax professionals to confirm eligibility and assess how the credits may benefit them.
These early discussions should focus on securing commitments, not on collecting donations. Under the program’s requirements, contributions must be made during the applicable program-year contribution period, and nonprofits are advised not to formally accept contributions before receiving DCED approval.
Nonprofit organizations should also consult their DCED regional office before applying. This consultation is required under the current guidelines and offers an opportunity to discuss project eligibility, program fit, and application requirements.
Starting this work now can put organizations in a much stronger position when the next application cycle opens.
Planning Ahead for the 2027 Pennsylvania’s Neighborhood Assistance Program Application Cycle
NAP presents an important opportunity for Pennsylvania nonprofits to leverage private-sector investment in their communities. With significant tax-credit incentives available to participating businesses, the program can help organizations attract financial support for projects that might otherwise be difficult to fund.
But taking advantage of that opportunity requires advance planning.
The time to begin seeking business contributors is now, not when the application window opens. Signed contributor commitments are mandatory for a NAP application, so nonprofits must secure them before applying. Organizations that wait until the application window opens to recruit contributors risk missing the opportunity to apply altogether. Starting early allows nonprofits to develop their projects, build business relationships, and secure the financial commitments needed to pursue funding.
Duane Morris Government Strategies works with nonprofit organizations to evaluate funding opportunities, develop project strategies, identify potential contributors, and prepare competitive applications. Organizations considering NAP funding for the upcoming cycle are encouraged to begin those conversations early.
This article is based on DCED’s March 2026 Neighborhood Assistance Program guidelines. Application dates, program priorities, and requirements for the 2027 cycle remain subject to DCED’s forthcoming guidance. Nonprofit organizations considering an application should review the applicable program guidelines and consult their DCED regional office to assess project eligibility and the appropriate NAP category. Prospective business contributors should consult their tax or legal advisors regarding eligibility and the treatment of available tax credits.