Opinion: Nonprofits keep New York running, but the city’s pushing them off a cliff

Nonprofit organizations are the unsung heroes protecting New York City’s social safety net. From caring for seniors to feeding our children to supporting at-risk individuals, they provide essential services that millions of New Yorkers rely on every day. Despite their critical role, these nonprofits are on the financial brink – not due to a lack of demand for their work, but because of chronic delays in payments from the very city they support.

A recent survey from the Human Services Council captures a grim state of affairs: 68 nonprofit organizations holding over 1,000 city contracts are struggling to stay afloat due to delayed payments. Many organizations have been forced to lay off employees and cut back on programming as a result of this fully avoidable mess.

Over 90% of these organizations report significant payment delays, amounting to a staggering $365 million in outstanding payments. Two nonprofits that provide critical social services and housing assistance to New Yorkers are owed an estimated $53 million alone. Overall, nearly half of these organizations have had to take out a combined $87 million in private loans just to keep their doors open. The interest on these loans amounts to $6 million – a financial burden that should be spent on services, not to help banks make record profits.

The root causes of these delays are manifold, but they all point to systemic inefficiencies within New York City Mayor Eric Adams’ administration. They stem from a range of bureaucratic bottlenecks, including contract registration backlogs, staffing shortages at city agencies, issues with the city’s digital procurement system and invoicing complications. With no mandated deadlines or time frames baked into the procurement and contracting process, there’s no accountability for long delays. It’s infuriating to see minor administrative technicalities leading to endless logjams in payment delivery, with some nonprofits waiting months or even years for their bills to be paid.

When Adams first took office, there was some hope that these delays would be addressed. To be fair, his administration launched a successful “clear the backlog” initiative early on, which temporarily improved the payment process. But that progress stalled out, and now the city is behaving like a disengaged, deadbeat parent. We’re back to a broken status quo where nonprofits are being forced to do more with less while waiting indefinitely to be paid for services they’ve already delivered.

This is not just a bureaucratic issue; it’s a very human one. When payments are delayed, it’s not just the nonprofit staffers that suffer – it’s the people in need who ultimately pay the price. Management is forced to spend time and resources chasing down payments rather than fulfilling their core mission. Some organizations have even reconsidered partnering with the city, opting out of contracts altogether because they can’t afford the risk of not getting paid.

Families in shelters, children in after-school programs and seniors relying on community centers are the ones who bear the brunt of these delays. When nonprofits can’t pay their staff or vendors, services are scaled back or delayed, leaving vulnerable populations without the support they need. The entire community suffers when nonprofits are forced to divert resources away from service delivery to cover interest payments on loans that they never should have needed in the first place.

How do we fix this? For starters, we’ve introduced legislation that will change course and offer a lifeline to nonprofits teetering on the edge. It’s straightforward: The city will be required to pay interest on late payments to nonprofits – period. This will create an accountability mechanism as well as providing an incentive for city agencies to process payments more efficiently. Nonprofits that have received interest-free loans from the city to cover expenses wouldn’t be eligible for interest payments, ensuring that this legislation only applies to organizations that truly need it.

This bill is not a silver bullet that will fix every problem in the system, but it addresses one of the core issues driving this crisis. Simply put, the city will no longer be able to treat nonprofits like a no-interest line of credit.

More than just a legislative fix, what’s needed is a big shift in priorities. The city’s failure to prioritize timely payments for completed work undermines the entire social service network, which is built on the backs of these nonprofit organizations. It’s time we recognize that nonprofits aren’t just nameless, faceless contractors – they’re partners that keep New York City functioning.

Real, lasting change will require political will and consistent action from the Adams administration and its successors. It’s clear New York City cannot operate without its nonprofit partners, and we can no longer simply take advantage of their goodwill and hope for the best. These organizations must be paid on time, all the time. The stakes are too damn high for anything less.