The New York City Council on April 17 released a report detailing widespread delays in contract payments to nonprofit organizations and introduced new legislation and budget proposals aimed at addressing the crisis that threatens the stability of critical human service providers.
The report reveals that 90.59% of nonprofit contracts in fiscal year 2024 were registered late, forcing providers to begin delivering services without finalized contracts or city payments, according to a press release.
That figure marks an increase from 88.19% in FY 2023. In 2023, the median cycle time for vendor payments to nonprofits stretched to 355 days. Council Speaker Adrienne Adams said delaying payments of nonprofits organizations compromised the sector, workers and the beneficiaries.
“Nonprofit organizations deliver essential services that are critical to the health and safety of all New Yorkers, but they can’t sustain operations or make payroll when city contract payments for completed work are delayed," she said. "It’s unreasonable to expect them to effectively function under fee-for-service contracts without timely reimbursement."
Council Member Justin Brannan said delayed payments were a crisis for the nonprofit sector.
“Our city leans on nonprofits to do the tough work government can’t do alone. They’re not asking for a pat on the back — they just want to be paid what they’re owed,” said Brannan. “These procurement delays aren’t just red tape anymore, they’re a full-blown crisis. When nonprofits can’t get paid, people lose services. With safety nets under attack nationwide, we need our nonprofit partners more than ever. No procurement, no peace.”
The Council’s new legislative package looks to accelerate payment timelines, require mandated reforms when delays occur and restore budget cuts to city contracting staff that have contributed to the problem.
The legislation will be reviewed during an April 30 hearing by the Council’s Committee on Contracts.
