St. Martin de Porres School in North Philadelphia may have found the key to survival for inner-city Catholic schools.

Through a pioneering partnership with the Archdiocese of Philadelphia and local business leaders, the school at 2300 W. Lehigh Ave. has become an independent Catholic school overseen by an 18-member board but it retains ties to the archdiocese.

It is the only school in Philadelphia with such an arrangement.

Bolstered by an endowment of more than $4 million, a full-time development director, and fund-raising that covers a quarter of the school's $1.7 million annual budget, St. Martin de Porres has been able to increase enrollment and add programs without raising tuition.

"This has provided a growth and a transformation for the school and a real sense of stability," said Sister Nancy Fitzgerald, the principal. "When I register new families and I explain to them . . . that we are an independent Catholic school and that the archdiocese cannot close us, their eyes light up."

Her school has 400 students from kindergarten through eighth grade - 20 more than last year. Parents pay $2,460 per child.

The school's board, the archdiocese, and the nonprofit Business Leadership Organized for Catholic Schools (BLOCS) quietly signed documents in August 2010 making the school independent.

Officials are scheduled to publicly announce Tuesday the school's independence and its successful year-old transition.

"We're just thrilled that the group has come along to ensure that the school will continue," said Mary Rochford, superintendent of Catholic schools.

John F. "Jack" Donnelly, a business executive who is chairman of the Friends of St. Martin de Porres School Board, said the new approach shields the school from the cycle of rising costs and declining enrollment that causes several Catholic elementary schools to close each year.

"The goal is ultimately to use this as a model for other Catholic schools," said Donnelly, chief executive officer at L.F. Driscoll Co. L.L.C., a Bala Cynwyd construction-management firm.

A year ago, BLOCS pledged $4 million in matching grants to help St. Martin de Porres and six other urban Catholic schools create endowments. Although St. Martin de Porres has not yet raised the $5.75 million to qualify for its $225,000 match, the school is the first to become independent.

"We will be doing a full-court press" to get the match, Donnelly said.

Other area parish schools have become independent in order to continue serving low-income students in inner-city neighborhoods. In 1993, business leaders, the Jesuits, and the Sisters, Servants of the Immaculate Heart of Mary joined together to keep the Gesu School in North Philadelphia open after the archdiocese announced it would close it.

And when the lone surviving Catholic school in Chester was threatened with closure in 2006, the archdiocese, Neumann University, the Sisters of St. Francis of Philadelphia, and the St. Katharine Drexel Parish reached an agreement that created Drexel Neumann Academy.

The Gesu School has no ties to the archdiocese. Drexel Neumann Academy has received $100,000 per year from the archdiocese since the 2009-10 school year.

St. Martin de Porres is charting a different path.

To help St. Martin de Porres become financially self-sustaining, the archdiocese has agreed to provide decreasing levels of financial support for five years.

After giving $100,000 for the transition in 2010-11, the archdiocese will trim the amount by $10,000 each year through 2014-15.

Under the agreement, a representative from the archdiocese serves on the school's board. The pastor of St. Martin de Porres Church, the Rev. Steve Thorne, is the board president. Though he is involved, the parish no longer helps pay for the school.

"The parish is not burdened with our finances," Fitzgerald said. "It frees the parish up to be about its mission spiritually and socially."

And though her school is independent, it follows the archdiocese's curriculum, and staff receive health insurance and pension coverage through the archdiocese.

"It's a very good melding," Fitzgerald said.

Thanks to improved finances and independence, St. Martin de Porres has been able to do things that were impossible before, including adding advanced math and reading classes.

Bob Morrison, the school's development director, has brought in more than $80,000 in grants to cover everything from two electronic whiteboard systems to new desks and chairs for students in grades four through six.

"In all my 40-some years in education, I have never bought a new student desk!" marveled Fitzgerald, one of five Sisters of St. Joseph at the school.

St. Martin de Porres spends about $4,500 to educate each child but has kept tuition at $2,460 for three years.

"That never would have happened if we didn't have the board," Fitzgerald said. "They just bit the bullet and said they would bite off a bigger chunk of what they will assume as their responsibility to raise for the school."

Morrison said the board raises $425,000 for operating costs each year.

More than 80 percent of the students come from low-income families. Many receive financial aid from the Children's Scholarship Fund Philadelphia and other programs that benefit from the state's Educational Improvement Tax Credit program, which gives businesses tax credits for donating to programs that provide scholarships for low-income children to attend nonpublic schools.

Donnelly said the creation of the school's board and the move toward independence were outgrowths of ties that St. Martin de Porres forged a decade ago with its sister parish, St. Katharine of Siena in Wayne. Donnelly and a few other Wayne parishioners got involved through the Rev. Ed Hallinan, longtime pastor of St. Martin de Porres, who was transferred to another parish in the summer.

"We started to think about what is the future of inner-city Catholic education in that the diocese, more and more, was having to put tremendous sums of money into these schools to keep them going," Donnelly said.

He and others set up the Friends of St. Martin de Porres to aid the school, later found others to help, and then reached the agreement with the archdiocese last year.

Fitzgerald, who arrived at St. Martin de Porres after her former school - St. Stephen's on Broad Street - closed in 1993, calls the changes she has witnessed at the school "a miracle more than a blessing."

The key, she said, is the goal of creating an endowment of $6 million to $8 million "to provide a steady base of income."

She listed the recent upgrades to the stone building on Lehigh Avenue and the many academic improvements.

"We have all new sidewalks in front. They power-washed the whole front of the facade. I think the idea is that this is a new day, and they're committed to making this a zone of excellence, building on what was already in place.

"We are in a unique position," she said. "We don't want to just survive - we want to thrive."

Contact staff writer Martha Woodall at 215-854-2789 or