The Corporate Citizen, May 2007

Interview with Eva Tansky Blum, 
SVP and Director of Community Affairs, PNC Bank

The following interview took place on May 23, 2007.

The Corporate Citizen: Have you seen a change in trends over the last five or 10 years in terms of how U.S. companies approach community investment?

Eva Blum: What has been an issue from the beginning of when I got involved in this, particularly around the beginning of the Community Reinvestment Act in the late '70s, is the issue of affordable housing — it's always an issue. 

The community groups really believe, and rightfully so, that to really stabilize communities they need to have mixed income-residents who own their own homes and who take care of their property.  That's always been an issue and unfortunately it still is.  We certainly see that continuing.

There's also a lot of activity around revitalizing the main street. That's often critical to turning a distressed community around and bringing businesses back.  Not only national businesses, but local businesses, local owners with small businesses that can really revitalize that community. 

Through our Grow Up Great program we have learned that it is crucial for businesses to join with community members and with the government to make sure that the education of children, even at their youngest stages, is emphasized in the community and is provided.  Every child should have access to high-quality preschool education.  It is so important for the child's development, for their ability to start school really ready to learn.  They do so much better in school, and they stay in school longer.  It is a benefit to society because it costs less, there's less crime, and the children get good jobs when they grow older.

What is also being discovered is that the children who have a really good start in life return to their communities having better jobs, and then they buy homes and cars and really are able to continue the cycle of having this stable population in the community. 

TCC: You touched briefly on how it's crucial for businesses to partner with their community groups and their governments.  Has that realization become more apparent recently? 

EB: It's interesting, because in Pittsburgh we have a very long tradition of public-private partnerships.  My understanding is that that is not the case in other cities.  We can see from where other bank offices are that there is just not this longstanding tradition.  I think there is more of a realization that it's important that we all work together, and certainly in a community like Pittsburgh, where there is a tradition to do that.

I remember there was an article in the New York Times a number of years ago about Pittsburgh, saying that Pittsburgh was able to come out of the steel crisis when the mills shut down, that we came out of it better than many other cities who experienced the same thing, because we had this tradition of the corporations and the government and the communities working together.

So it's very important.  I hope there is a greater realization of that across the country.  I'm not sure we're there yet.

TCC: Could you talk a little bit about why PNC has made the decision to be strategically involved in the development of Pittsburgh and other communities?  And as a follow-up to that, why is it important for the business sector as a whole?

EB: Well, we have always believed that you just can't have a strong bank or a strong business in a weak community.  So to the extent that you want to grow your business, you need to have a community around you that is vibrant.  And so we have always believed that it is very important for us to be intimately involved with our communities, to understand their needs, to really help in reaching their goals.

Now as a financial institution we are also subject to the Community Reinvestment Act, so we have certain regulatory responsibilities, particularly in the credit area, but also in the investment areas.  But even beyond the Community Reinvestment Act responsibilities that we have, we believe very strongly that our future is linked with the communities in which we live.  So it's important for us to be involved.

TCC: Could you walk me through the highlights of a specific community program that has really helped improve the condition of that community? 

EB: Let me discuss one in Pittsburgh that was actually part of the bus tour when BCLC brought a meeting here.  It's called Eastside. 

This is a development that is right between a thriving section of the city and a struggling area that is working to recreate its image.  The thriving area has a strong business district and a wide variety of housing where there are apartments and condominiums and homes and it ranges from very expensive homes to more modest homes. 

Right next door to that is a neighborhood that was once a very stable, middle-class, middle-income community that has deteriorated considerably and has a lot of the issues of the deteriorated area, deteriorating housing stock, crime, schools that are really losing population dramatically.   

So the thought of some of the developers and the community groups was to try to merge those communities in a way that would bring some of the success of what's called Shadyside over into the area that's trying to rehabilitate itself, called East Liberty, which is why the development is called Eastside.

We participated from the beginning in helping with this development.  It started with recycling a warehouse into a Whole Foods Market and we provided the subordinated debt that made it economically feasible. 

A few years later we did a big project with New Markets Tax Credits.  There's now the Whole Foods, a big Borders bookstore, and a beautiful wine store.  We moved our bank branch there.  There's a Starbucks, of course.  There's a children's clothing store.  It is bustling. 

Some of the deteriorated housing and office buildings that are on the East Liberty side have now been bought up by developers and they're being converted into very nice, mixed-income condominiums. 

With us being involved as heavily as we were, working with the community to understand what was needed, we really helped to give them the opportunity to plan it out by providing some of the seed dollars.  It's taken a long time.  You have to be patient with these things.  We've been working on this project for probably over four years.

But it appears that it's going to be a huge success and hopefully we'll transform the side that really needed a shot in the arm.

I can give you another example. This one's also in Pittsburgh, but we do this in Philadelphia and in other places. We will enter into a partnership with a community for 10 years and give them a grant every year, so they know that for 10 years they're getting this grant from us.  The community organizations know that they can meet their payroll, they can turn the lights on every day. It's just good operating capital for them.  That enables them to really focus on the community and projects that transform the community.

For example, in Pittsburgh, where we're just ending a 10-year relationship in the South Side, the South Side has become just a booming area.  Again, mixed income, and the housing that was built just 10 years ago is much more valuable today. 

So it really does show that long-term working partnerships really do provide a huge benefit to the community-based organizations to get the job done.  It needs to be done.

A lot of times when you look at these projects, for one bank to take on the whole credit risk or the whole – it's too much.  So it really is hugely advantageous to be able to work in partnership and to be able to combine public money and private money and foundation money and put it all together.  That's what makes these projects work.

TCC: Could you paint a picture for me — what does a successful, thriving community that has successful public-private partnerships look like?  What elements will be there? 

EB: Well, again, I think we're striving for a stable population base that is mixed income, high-quality schools starting at the preschool level, recreation areas, parks, green spaces. And a thriving local business community that is made up of mixed businesses — so you've got some of the big box stores but you also have the local community members who have thriving small businesses, who are hiring people in their community, who know the people in their community and really deliver a service that is very personal.

There's also cultural aspects and good transportation.  If people can't get to where the jobs are they can't even apply.  So when we see so many employers moving out to the suburbs, if there's not a good public transportation system, people in lower-income communities can't get there.  And so it doesn't benefit anybody.

TCC: One of the findings from a recent BCLC survey was that the business sector prefers to partner with local-level charities, schools, and government agencies far more than it likes to partner with national charities or federal government organizations. Why do you think this is? Is this the way it should be, or should we be looking at how to strengthen national-level coordination?

EB: I think it's the proverbial where the rubber meets the road.

I think that, while there can be broad policy nationally, there should be funding flowing into a lot of these initiatives from the federal government, from the state.  But where the real work happens is at the local level.  And you have to know what the local personality is like.  You have to really understand what the community is made of, what it needs, what it wants. Someone in Washington can't tell you that.

TCC: What do you think are some of the currently untapped opportunities for the business sector to make an impact on communities in the U.S.?

EB: Well, I would put number one on the list as being advocates for the children in our communities.  They are the future workforces.  They're our future customers.  And to the extent that they are not being educated properly we are really going to be in trouble. Where communities are successful they are wrapping services around families and really supporting families and children.  So I think that is critical. It leads to everything else.

Certainly we have to make sure that crime issues are taken care of, people feel safe.  Again, if you educate children early and they have better jobs and better places to go after school, the crime diminishes. 

Others would argue that housing is the most important.  Others may argue it's small business.  But I'm going to argue that if we don't pay attention to our children and families and we don't give them the support that they need, everything else will fail.

TCC: Is there anything else you would like to add in closing? Any final thoughts for corporate citizenship practitioners?

EB: Well, one. This has been so interesting for us and I think it's becoming more and more of a topic around the country, and that is volunteerism for our employees.  Our employees are very involved in our communities, and we encourage it.  We pay 40 hours a year for our employees who volunteer in the Grow Up Great program. 

We have always encouraged a lot of volunteerism in the places where we live and work.  And what we find is that our employees just embrace this.  It's part of our culture. And it's great for team building. It builds a loyalty and a pride in the company.  It's very important to the new generation that's just coming out of college.

And so I would encourage more and more companies who may not have these kinds of volunteer programs to think about it because it is such a valuable part of who you are as a company and as a citizen.

TCC: Thank you so much for your time.

Eva Tansky Blum is senior vice president and director of community affairs for PNC Bank, a member of The PNC Financial Services Group. Blum also serves as chair of the PNC Foundation.