How New York City Routinely Fails to Pay the Nonprofits It Relies On

New York|How New York City Routinely Fails to Pay the Nonprofits It Relies On

As protest slogans go, “Payment on time, every time!” may sound like a modest demand.

But for many of the nonprofit organizations that New York City hires to provide billions of dollars in social services, prompt payment is a distant dream. Workers from organizations representing hundreds of nonprofits rallied outside City Hall last week to beg the city to simply pay them what they are owed.

According to a new report by the city comptroller, Brad Lander, the city is sitting on at least 7,000 unpaid invoices from nonprofits, some dating back years, totaling over $1 billion.

This is money for groups that shelter the homeless, provide child and elder care, feed hungry New Yorkers, counsel the mentally ill, protect domestic violence victims and provide legal services to immigrants and defendants who can’t afford lawyers.

“The city says to these organizations, ‘Look, we don’t have the capacity to do this lifesaving work — we need you to do it,’” Justin Brannan, chairman of the City Council’s Finance Committee, said at the rally on Wednesday. “But then when it’s time to get paid, they treat you like a deadbeat parent and they don’t answer the phone.”

Mr. Lander says the $1 billion is most likely an undercount. His review found that as of April, nonprofits with active contracts might have performed up to $4.9 billion in work that the city had not yet paid them for.

Here’s what to know about the city’s chronic late payments.

Why is the city so bad at paying its bills?

It’s not a cash flow issue — the city has the money. Rather, delays are built into the contracting and payment process at every step.