Positioning themselves as a bulwark against Trump, nonprofits re-frame funding requests

Urban Pathways COO Ronald Abad asks for more funding at a Dec. 1 rally. He is flanked by HSC Executive Director Allison Sesso

Positioning themselves as a bulwark against Trump, nonprofits re-frame funding requests

December 2, 2016

Social services providers urged Mayor de Blasio to provide a $50 million increase to cover increasing administrative costs and stressed that supporting their organizations has only become more critical under a Trump administration.

“These are the organizations that we are going to count on as a city to step up and to respond for those who could be hurt during a Trump administration,” City Councilwoman Helen Rosenthal said during a Dec. 1 press conference in front of City Hall where she joined advocates demanding the funding increase, which has doubled since spring.

One immediate concern stems from de Blasio’s statements that New York won’t comply with attempts at the federal level to increase deportations of undocumented immigrants. President-elect Donald Trump has threatened to withhold money to so-called Sanctuary Cities like New York, which direct police to disregard or to not check the immigration status of individuals they interact with – purposely restricting local government's cooperation with federal immigration officials and denying them an avenue for identifying the undocumented.

De Blasio has said that presidents can’t make across-the-board funding cuts based on policy disagreements - an analysis that fact-checkers mostly agree with. Still, many in the social services sector fear that the incoming Republican-dominated federal government may reduce funding to the Democratic city and its programs.

“They are desperate to ensure that in this coming wave, given that we are a Sanctuary City and we don’t know what the future holds, that they can be strong and continue to be there for communities,” said Allison Sesso, executive director of the Human Services Council.

HSC and other advocates are urging City Hall to add money to the “Other Than Personal Services” (OTPS) budget line, which covers non-staffing costs such as utilities, rents, office equipment and repairs. The proposed $50 million in the preliminary budget expected to be introduced next month, would represent a 5 percent raise. The most recent budget, passed in June, included some discretionary funding increases, but advocates were disappointed it didn’t contain the $25 million they sought at the time.

New York spends about $6 billion annually on nearly 4,000 contracts, most of which goes directly to employees, Rosenthal said. Very little funding is directed toward OTPS or overhead expenses, a trend which, over the years, has resulted in fiscal instability within many nonprofits, according to an HSC report which found underfunding and delayed payments across the sector. The crisis has continued in the wake of the social services agency FEGS’ collapse in 2015 which led to layoffs of 1,900 employees and the shifting of 120,000 cases, the report found.

The nonprofit sector has a generally positive relationship with City Hall, though the fight for OTPS funding has proved a sticking point. Last year’s budget contained a 2.5 percent cost-of-living adjustment and an $11.50 hourly wage floor. The Mayor’s Office also empaneled a Nonprofit Resiliency Committee to help address some of the issues affecting the sector. But the de Blasio administration hasn’t committed to the OTPS increases and that’s kept some underfunded nonprofits living from payroll-to-payroll. Some have even talked of rejecting ungenerous government contracts to express their disapproval and protect their bottom lines.

Along with government contracts, many nonprofits have varying degrees of private funding which could theoretically help address OTPS expenses, but even among foundations and individual donors, raising funds for the administrative costs that directly correlate to treating homelessness, improving education and reducing poverty can be a hard sell.

United Neighborhood Houses Executive Director Susan Stamler said the need for administrative funding directly affects the settlement houses that comprise her group. “So, you walk into the front door and you’re possibly there for child care or after-school or mental health services, art classes, senior programs,” she said, but, “Who’s paying for the front door?”

Rosenthal, who chairs the Council’s Contracts Committee, said city services performed by municipal employees - whose unions bargain for benefits and annual raises - are just as essential as taking care of seniors, children and those with developmental disabilities. “We have one of two choices: We can either bring these services in-house, treat these workers as city workers that they are, fund them responsibly,” the councilwoman said. “Or we can continue on the path that we’re on now and we can continue to ask them to do the city’s mandated services.”

Rosenthal said the private funding nonprofits receive needs to be used to help develop new ways to provide services - “the extra special gems on top of the service" - not administrative costs. She added that investing $50 million more in nonprofits would counterbalance potentially more substantial federal funding cuts over the long term.

City Comptroller Scott Stringer, who joined other elected officials, advocates and representatives from groups such as Phipps Neighborhoods, Graham Windham and Sheltering Arms at Thursday’s rally, said that it was hard to get philanthropy to pay for infrastructure. “I do not want to see another worthwhile organization go under because we did not think strategically,” he said.

A spokeswoman for the mayor cited the across-the-board cost-of-living increases, increased salaries for 340 Department for the Aging social workers who help homebound seniors, raised rates for DFTA homecare providers and meals programs, more licensed social workers for shelters, realigned shelter costs, and reimbursements for EarlyLearn providers that are in accordance with actual program costs, among other initiatives.

Mayor de Blasio has made tremendous investments into programs that serve vulnerable New Yorkers and he’s done so with the human services sector as our partner,” said the spokeswoman, Freddi Goldstein. “He’s proven time and time again that these investments are a priority of his administration. Most notably, increasing wages and putting hundreds of millions of additional dollars into the pockets of human services sector employees.

Urban Pathways, which performs homelessness outreach and operates more than 600 units of housing, would argue that’s not enough. The nonprofit is facing rising health insurance premiums, and costs for rents and utilities. Chief Operating Officer Ronald Abad said they get multi-year contracts that stay flat as their costs increase. An OTPS increase, he said, could also pay for IT, vans for outreach, as well as beds, linens, appliances and furniture for supportive housing units. “A homeless person that we end up housing in one of our supportive housing developments, they go in basically with themselves, with the clothes on their back and we pay for everything,” he said. 

Dan Rosenblum