Nonprofit leaders push for funding reforms


The Chinese-American Planning Council operates a senior center in Chinatown that provides meals and services to thousands of elderly New Yorkers, funded by the city’s Department of the Aging.

Recent news that chronically late government payments are being blamed for forcing another New York charity to close has CPC leaders evaluating their own books and future.

“The City of New York, for example, owes CPC nearly $10 million over the past two fiscal years for services we have provided to children and seniors and their families,” said Wayne Ho, CPC President and CEO.

Ho is among those who were stunned by last month’s announcement that Sheltering Arms was collapsing.

what you need to know

  • The news that after nearly 200 years of service to the city, Sheltering Arms is closing due to financial problems and late government payments has rocked the nonprofit sector
  • Wayne Ho, president of the China-American Planning Council, says the city owes his organization nearly $10 million for services already delivered to New Yorkers
  • Proponents say payments to nonprofits for contracted services for city and state governments are often seen as small

Since 1831, Sheltering Arms has provided services to vulnerable children and families including foster care, homeless shelters and mental health treatment.

According to a spokesperson, “financial challenges resulting from the pandemic — combined with chronic underfunding and late government payments — are forcing Sheltering Arms to transfer many of our programs and staff to other high-quality organizations.”

Ho says too often that community service organizations are hired by the city or state to deliver programs without getting paid on time for their efforts and sometimes taking years to get reimbursed.

“We use money raised through our annual gala or through our donors to fill the gap in our city and state contracts, which unfortunately don’t cover the full cost of providing services,” he said.

Industry advocate Michelle Jackson of the Human Services Council says it’s a long-standing problem, bigger than any single administration, blaming the competitive contracting process, which could work for a company hoping to work for the city to secure a To build a bridge, but not for a non-profit organization.

“If you’re in construction, you don’t start work until you have a signed contract, but social services can’t do that,” Jackson explained. “You can’t shut down a summer youth program waiting for a program to register and frankly the government is taking advantage of that.”

With Sheltering Arms closed, advocates say now is the time for reform.

“This is a wake-up call for elected officials and city officials to understand that we really need to change the system,” Ho said.

Mayor Eric Adams has pledged reforms. A task force formed in conjunction with City Auditor Brad Lander found that “more than three-fourths of the city’s nonprofit contracts were received after the start date for registration with the Court of Auditors’ office.”

A spokesman for City Hall made the following statement:

“Reducing bureaucracy, solving procurement problems, and making our city more efficient for the nonprofits that do important work for New Yorkers every day have been key goals of the Adams administration. In support of nonprofits, we announced the newly created Mayor’s Office of Nonprofit Services to work with government agencies, announced the creation of ContractStat as an oversight initiative to address issues before they arise, and launched the 12-week Clear the Backlog initiative to help helping nonprofits with overdue bills pay for their work. This administration has already worked to clear the existing $6.2 billion backlog, resulting in over 2,600 previously unregistered, retroactive contract actions being registered or submitted for registration, helping hundreds of vendors. While we are taking steps in the right direction, we know we still need to make more strides to support our nonprofits.”

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