Nonprofit Organizations Face Months-Long Delays in City Government Contracts
Nonprofit organizations around New York are still facing months-long delays in getting paid on city government contracts, recently forcing some to close their doors while others are worried about paying their staff.
Growing Needs, Shrinking Staff
The problems have hit a wide array of groups, from public defenders who are required by law to represent people in criminal court who can’t afford attorneys to organizations who feed and house homeless New Yorkers.
Delays in Payment
Earlier this month, a group of legal-support nonprofits including The Legal Aid Society and The Bronx Defenders sent a group letter to Mayor Eric Adams demanding the city address late-payment issues. "Delays in payment are existential and threaten payroll and our ability to continue doing this work, especially for smaller nonprofits," the letter read.
The Impact on Nonprofits
Nonprofit leaders say the problems persist. "The city’s dysfunctional contracting process needs a comprehensive overhaul," Twyla Carter, the CEO and attorney-in-chief at The Legal Aid Society, said in a statement. "Nonprofits that serve as New York City’s safety net can no longer endure this endless game of whack-a-mole, where resolving one contract issue is quickly followed by another."
The Financial Burden
More than 48% of respondents said they’ve taken out loans or a line of credit valued at more than $87 million, with $6 million in interest payments. A spokesperson for the Mayor’s Office of Contract Services, Yexenia Markland, said the transition to PASSPort has improved the procurement process and that 81% of contracts were submitted on time for the last fiscal year — compared to just 56% the previous year.
Conclusion
The payment slowdown is "catastrophic" for nonprofits, according to Dr. Jocelynne Rainey, the president and CEO of Brooklyn Org, a local philanthropy platform. "This hustle doesn’t last forever, and when they give you loans they don’t give you loans for the full contracts, leaving them struggling to make ends meet while waiting for payment," she said.
FAQs
Q: What is the main issue facing nonprofit organizations in New York City?
A: The main issue is months-long delays in getting paid on city government contracts.
Q: How many nonprofits are affected by the payment delays?
A: According to a survey by the Human Services Council, over 90% of respondents have delayed payments totaling $365 million.
Q: What is the impact of the payment delays on nonprofits?
A: The payment delays are causing nonprofits to take out loans or lines of credit, and are threatening their ability to pay their staff and continue their work.
Q: What is the city doing to address the issue?
A: The city has implemented the PASSPort online portal, which is supposed to streamline services, but nonprofit leaders say the problems persist.
