Nonprofit organizations in New York are facing significant delays in receiving payments from city government contracts, leading to financial struggles and closures for some organizations. The delays are attributed to issues with the city’s payment system, understaffing at city agencies, and the transition to the PASSPort online portal. Nonprofit leaders are expressing concerns about layoffs, financial strain, and the impact on their ability to provide essential services. Efforts to address the payment delays have been ongoing, but nonprofit leaders continue to face challenges in receiving timely payments.
In New York City, nonprofit organizations are experiencing significant delays in receiving payments for their government contracts, leading to financial struggles and the risk of closure for some organizations. One such organization, Hester Street Collaborative, recently announced its decision to shut down due to financial unsustainability caused by delays in payment from city-issued contracts.
The delays in payment are attributed to issues with the newly integrated PASSPort online portal, which was implemented to streamline services but has instead created challenges for nonprofits. Many organizations are owed millions of dollars, forcing them to consider layoffs, take out loans, or fundraise just to cover interest payments on loans. The situation has been described as the worst it has ever been by nonprofit leaders in the city.
The Human Services Council, an umbrella organization representing around 170 nonprofits, conducted a survey revealing that half of the respondents experienced delays in the city’s procurement process, resulting in delayed payments totaling $365 million. The delays are primarily due to PASSPort issues, regulation delays, and invoicing problems. Over 32% of respondents reported delays of more than six months, with many organizations resorting to taking out loans or lines of credit totaling more than $87 million, resulting in $6 million in interest payments.
Despite efforts to improve the procurement process, such as the transition to PASSPort and the establishment of the PASSPort Vault, nonprofit leaders continue to face challenges. A task force formed by Mayor Eric Adams and Comptroller Brad Lander aimed to address these issues but has not yet resolved the ongoing problems with late payments.
Various nonprofit sectors are affected by the payment delays, including legal support organizations, homeless services providers, and community development groups. Legal aid nonprofits, such as The Legal Aid Society and The Bronx Defenders, have raised concerns about the existential threat posed by delayed payments to their ability to continue providing essential services. Manhattan Borough President Mark Levine also urged City Hall to address the late-payment issues affecting nonprofits.
Nonprofit leaders emphasize the urgent need for a comprehensive overhaul of the city’s contracting process to prevent further financial strain on organizations that serve as essential safety nets for vulnerable populations. The delays in payment not only impact the financial stability of nonprofits but also hinder their ability to meet the increasing demand for services, such as shelter for the homeless.
In conclusion, the payment delays faced by nonprofit organizations in New York City have reached a critical point, jeopardizing their ability to continue serving the community effectively. Urgent action is needed to address the systemic issues causing these delays and ensure timely payments to support the vital work of nonprofits in the city.
Source: TheCity.NYC
