A parochial-school fund-raising group headed by developer Michael O'Neill has set a five-year, $50 million goal for a new endowment to keep Catholic elementary schools in poor neighborhoods from closing.

O'Neill says the Business Leadership Organized for Catholic Schools has raised $6 million for the endowment since he succeeded retired cable-TV mogul H.F. "Gerry" Lenfest as chairman in October. The group, with 30 new board members, plans to raise an additional $4 million by June, and $10 million a year for the next four years. O'Neill declined to identify the donors.

"We want to take the financial burden of running these schools off the parishes that can no longer afford them," said O'Neill, who graduated from the elementary school at Our Lady of Lourdes at 63d and Lancaster in 1976. "Where the parish is barely hanging on, that model doesn't work anymore. We're trying to come up with an alternative way to make these schools work."

For the parishes and the archdiocese, that means working with business donors who expect regular financial reporting and offer their personal involvement with the schools.

One model: Drexel Neumann Academy in Chester, a parish school that was slated to close before a board including executives from Cigna Inc. and Pricewaterhouse Coopers L.L.P. committed resources, helping double enrollment to more than 200 this year.

The school still requires an archdiocesan subsidy, but it is an example of how Philadelphia schools backed by the business group's planned endowment and other salvage efforts are likely to work, said Bishop Joseph McFadden, who heads schools for the archdiocese.

O'Neill said St. Malachy and St. Martin de Porres in North Philadelphia and St. Francis de Sales in West Philadelphia are among the schools talking to the business group about long-term support. The Rev. Edward Hallinan, pastor at St. Martin de Porres, 24th Street and Lehigh Avenue, calls the group's proposal "a life saver."

"Every year, we are out trying to raise an additional $450,000 to $500,000 to keep our nose above water," he said.

Urban dioceses around the country have formed new organizations to back inner-city Catholic schools. A new foundation has helped the Diocese of Memphis reopen seven closed inner-city schools since 1999. "People are saying: 'We can't let these schools slip away, because they are good for the community,' " said Brian Gray, spokesman for the National Catholic Educational Association in Washington.

In the Diocese of Camden, where Catholic parochial school enrollment fell 27 percent since 2001 and more than one-quarter of the schools have been slated for closing since 2005, Bishop Joseph A. Galante announced a consortium last month that will group six Camden City and Pennsauken schools under "a new governance structure" including a board of trustees, executive director and business manager, and an endowment for tuition aid and operating costs.

In Philadelphia, the planned endowment would expand the mission of the Business Leadership Organized for Catholic Schools, which has focused mostly on financial aid to parochial school students since it was founded by an ecumenical band of executives at ARA Services (now Aramark), Industrial Valley Bank, and other companies in 1980.

The concept of Business Leadership Organized for Catholic Schools was "to make sure the Catholic schools don't fail, because, if you throw tens of thousands of students into the public school system, they wouldn't be able to handle it. And, these schools educate kids we hire," said William Mills, a PNC Bank executive and Lenfest's predecessor as the business group's chairman.

In the five-county Philadelphia archdiocese, the network of parish elementary schools fell from 86,000 students at 217 schools in 1997-98, to 59,000 students at 184 schools this year. Much of the decline took place in older neighborhoods where the Catholic population has left and taxpayer-funded charter schools are giving families more choices.

In the city, 30 percent of the 23,000 students at Catholic schools aren't Catholic. The typical parochial school charges about $2,200 a year, less than half the actual cost. The rest is paid by local parishes, or by the archdiocese. Separately, the archdiocese runs a network of 20 high schools in the city and suburbs. There are also private Catholic schools, which raise their own funds.

Last year, the Business Leadership Organized for Catholic Schools funded 3,890 tuition grants, averaging $300 for elementary school students and $1,000 for high school students.

The program raised $442,000 through its annual gala, up from $306,000 in 2005. The rest was raised from corporations, including PNC, Aramark, and Sovereign Bank, among others, through a Pennsylvania tax credit of up to $200,000 per company. Last year, that program raised $2.2 million for scholarships, up from $1.7 million in 2005-06, said the business group's director, John Hunter.

O'Neill says his group wants to raise more for scholarships, even as it builds the endowment.

This is not the first time the group has tried to go beyond tuition subsidies and raise a permanent endowment, Bishop McFadden acknowledged. He said daily operating needs overwhelmed earlier attempts to plan long term.

Group members also say it is a challenge raising money after the church in Philadelphia has been hammered by the public exposure, collected in a 2004 grand jury report, of the failure of former Cardinals John Krol and Anthony Bevilacqua to report or defrock priests accused of raping or molesting children.

On Thursday, a grand jury indicted former Archbishop Ryan High School principal Rev. Charles Newman for allegedly stealing school funds to buy drugs and pay hush money to a former student with whom he had had an illicit sexual relationship. The archdiocese fired Newman in 2003, and is cooperating in the investigation.

"That stuff can't happen when you're tracking the money" through an endowment that files data with federal agencies and reports to a trustee board, said Scott Tattar, spokesman for the Business Leadership Organized for Catholic Schools.

The group also faces competition from capital campaigns at rich private schools, such as the University of Pennsylvania, Episcopal Academy and Haverford School.

O'Neill is working to expand the group's traditional support base beyond City Avenue.

Gerard P. Cuddy, chief executive officer of Beneficial Mutual Bancorp, attended his first Business Leadership Organized for Catholic Schools meeting two weeks ago, and he said he was impressed by the energy of the suburban developers and other new members. "I didn't know everybody in the room, but I could see the type of people who they've attracted. They don't just give money. They're actually there to work."

Contact staff writer Joseph N. DiStefano at 215-854-5194 or jdistefano@phillynews.com.

For more information about Business Leadership Organized for Catholic Schools, call 215-587-0590, or point your Web browser to www.blocs.org.