Every day, nonprofit organizations provide essential, life-saving services to New Yorkers. City agencies contract with nonprofits in every neighborhood to provide meals for homebound seniors. After-school programs for kids. Job training for young adults.
We shouldn’t take a year to pay them.
When the COVID-19 pandemic hit, nonprofit service providers leaped into action. They fed newly hungry neighbors, helped people access health services, supported children through trauma and assisted with millions of applications for emergency relief.
These nonprofits didn’t ask when they would be paid. They just got to work. But if they had asked, the answer would have been: many months after they fronted the funds to pay staff, buy food and provide services.
In a recent analysis, 81% of all contracts to nonprofit human service providers weren’t even registered — contract registration is required before they can begin to submit invoices — until after the contract’s start dates had already passed. Nearly 40% of contracts were registered more than six months late, forcing nonprofits into financial uncertainty or to take out multimillion-dollar loans to cover costs while they wait for payment from the city.
Meanwhile, while the vast majority of honest, hardworking nonprofits wait many months to be reimbursed, a few corrupt individuals in charge of organizations exploit weaknesses in the system for personal enrichment. Recent reports reveal how several homeless service executives enriched themselves by hiring relatives and subcontracting with companies they controlled.
Our current contracting system is failing to catch crooks, and making everyone else pay.
So as we get ready to lead this city from our new roles as mayor and comptroller, we’re partnering to hit reset on the city’s relationship with the nonprofits that are central to serving our communities.
This week, we’re co-convening stakeholders from a wide cross-section of the city’s nonprofit contractors to identify the root causes of the dysfunction, establish a clear agenda to fix it and implement the changes.
The mayor and comptroller are jointly responsible for procuring services and administering contracts, each playing a critical role to ensure that public funds are spent wisely, contracts are awarded fairly, and that we guard against waste, fraud and abuse.
Our joint transition task force will bring together leaders of nonprofits, large and small, as well as leaders from mayoral agencies and the comptroller’s Bureau of Contract Administration.
By partnering to bring agencies and nonprofit stakeholders into the same room, we’re focusing on what NYC needs: a government that’s delivering for communities that have been left behind, doing it on time and stopping those who try to abuse it.
We’ll identify roadblocks at slower-moving agencies by analyzing data from the city’s recently adopted contracting system, PASSPort. We’ll partner to implement long-delayed steps to speed up contract registration and payment. We’ll consider new procurement rules to prohibit subcontracting with for-profit companies controlled by relatives or associates. And we’ll strengthen our joint investigative and auditing capacity to find, stop and punish those who steal public dollars.
New York City’s recovery depends on a strong nonprofit sector, from cultural organizations to food pantries, that will care for the physical, economic and emotional needs of our neighbors.
Our nonprofit community generated nearly $78 billion for NYC’s economy last year, and employs over half a million people — almost 18% of NYC workers. An overwhelming majority of those workers are women and people of color, who are often paid far less than their private or public sector counterparts. Meanwhile, the organizations that employ them struggle to keep their heads above water with unstable income, constrained resources and rising commercial rents.
When nonprofits fall short — whether because the city fails to pay them on time, or because a small handful of rogues exploit the system — the most vulnerable New Yorkers are the ones who suffer most.
For years, as this problem has festered, mayors and comptrollers and budget directors and commissioners have pointed the finger at each other. Enough of the blame game. It’s time to roll up our sleeves together and fix the problem.
That’s the path to a better contract for the New Yorkers who need it most.
Adams is mayor-elect and Lander is comptroller-elect of New York City.
