New York’s Overtime Rules: A Nonprofit Perspective

On Wednesday, December 28, the New York State Department of Labor finalized a wage order that significantly increased the salary thresholds for executive and administrative employees.  This wage order, which took effect a mere three days later on New Year’s Eve, was intended to bring the employee classification system into line with the recently increase minimum wage, and it resulted in thousands more workers across the state becoming eligible for overtime pay.[1]  The Human Services Council of New York (HSC) supports this effort to ensure that employees are compensated fairly for their labor.  At the same time, we are deeply disappointed by the government’s failure to provide the funding that nonprofit human services organizations need to comply with the wage order.  The latest wage order is yet another example of an unfunded mandate that will further destabilize a brittle but critically needed sector.

As noted in our public comment on the proposed rule, the government outsources much of its obligatory social service delivery to nonprofit organizations.  The nonprofit sector is an economic engine in our state, providing nearly 1.3 million jobs to 18 percent of the state’s workforce, with wages totaling $62 billion.  Contrary to popular belief, nonprofit human services organizations are not “subsidized” by government.  Rather, they are partners of government, delivering required services on behalf of the government agencies with which they contract.  They are no more subsidized than private school bus companies or defense contractors.

Unfortunately, government routinely imposes unfunded mandates on nonprofit organizations that compromise their financial and operational stability.  For example, copious and often redundant audit requirements divert already scarce resources from pursuit of an organization’s mission.  These mandates, paired with unrealistically low limits on indirect or “overhead” costs,[2] arbitrary and crippling restrictions on spending, and stagnant contracts that have not kept pace with inflation, create the very conditions in our sector that government, the media, and the public often malign.  They have left many organizations precariously balanced at the brink of collapse.  As such, few human services organizations can cover the cost of the state’s new wage mandates.

Of course, the new wage requirements affect employers in every sector.  As we explained in our comment, however, the nonprofit human services sector is unique because service organizations’ budgets are largely determined by the stagnant government contracts mentioned above.  These organizations are not at liberty to change their pricing.  For nonprofits that deliver services on behalf of government, the ability to pay staff is directly tied to the size of their contracts.  These contracts are notoriously inadequate.  The new wage requirements leave nonprofit organizations holding the proverbial bag.  Nonprofit organizations that do business with government should be good stewards of the public dollars that they receive, but they must be supported—rather than financially sabotaged—by government contracting practices.

The human services workforce is comprised mostly of people of color and is predominantly female.  Since the financial crisis of 2008, these workers were denied cost-of-living adjustments (COLAs) in state contracts for five consecutive years, while the cost of living increased at a rapid clip.  Many found themselves turning to the same public assistance programs that their clients use.  Furthermore, the sector delivers a wide range of services to diverse clients across the state, helping them cope with challenges and live healthy, safe, productive lives.  Care for children, seniors, the disabled, victims of violence, and the homeless; treatment for those suffering from trauma or addiction; and services for individuals facing barriers to employment or justice system involvement are just a few examples of the contributions of this important sector.  When service organizations falter, the communities that they serve suffer.  All of this makes the sector an ideal conduit for advancing the Governor’s equity agenda.

It is time for the state government, as an outsourcer of human services, to ensure that its nonprofit partners are set up for success.  One meaningful way to do so is to invest in the sector’s workforce.  Accordingly, HSC urges the Governor and the Legislature to appropriate funding to mitigate the financial effects of the minimum wage increase and the new exempt employee salary thresholds on its nonprofit partners.

[1] According to the Department of Labor, the increase in the salary thresholds was adopted in order to bring the thresholds in line with the newly increased minimum wage—a policy change that HSC, FPWA, the Fiscal Policy Institute, and many other partners vociferously advocated in conjunction with a call for additional funding.

[2] On this point, philanthropy is often guilty as well.  No one wants to pay the workers, but everyone wants the work to get done.

by Tracie Robinson

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HSC’s Semiannual Membership Meeting 2017

On Wednesday, February 08, 2017, the Human Services Council hosted our second FY17 membership meeting. The morning included:

  • a panel discussion on the impact of the federal election on the human services sector;
  • updates on HSC FY17 initiatives and strategy;
  • a vote on a slate of the Priority and Strategy Council;
  • HSC RFP rater and Government Agency Scorecard; and
  • updates on the Nonprofit Resiliency Committee.

Panel Discussion: Federal Administration and the Human Services Sector

As we move forward from the federal election, it’s crucial that we understand how federal economic shifts will affect our sector and our organizations. Moderated by Pat Jenny, Vice President of New York Community Trust, we engaged in dialogue with Jared Bernstein, Chief Economist and Economic Policy Advisor, and James Parrot, Deputy Director and Chief Economist at the Fiscal Policy Institute. The panelists discussed how potential federal policies like the repeal of the Affordable Care Act, plans to cut taxes, and implementation of block grants might affect City and State budgets. Many of these suggested policies might result in decreased funding to the City and State which will have a negative effect on human services organizations and the people we serve. Jared stressed the importance of monitoring non-defense discretionary spending and other funding streams that might affect human services. James suggested that the City and State are well positioned to weather potential cuts; ultimately, the sector should remain flexible, united, and ready to take action if necessary.

Updates on HSC FY17 Priorities and Strategy

Following the discussion, Allison Sesso, Executive Director of HSC, presented updates on HSC’s priorities for FY17. After the federal election, we find ourselves as part of a continuously evolving landscape.  We at HSC realize that we must remain flexible and ready to shift when necessary, while maintaining a clear and consistent goal—to insist on a strong nonprofit human services sector so that communities receive the programming, support, and services they need to thrive.

Highlights of HSC’s current priorities include advocacy efforts at local, state, and federal levels.

  • 12% Campaign to increase funding for indirect and OTPS concerns, which we’ve identified as central to the sector’s sustainability.
    • We are in discussion with high level City officials, and are looking for a solution that offers flexibility and address part of the budget other than raises for direct program staff.
  • Restore Opportunity Now Campaign, in partnership with FPWA and the Fiscal Policy Institute, is the first time we’ve created a statewide coalition, with 360 organizations signed on. Asks for this year include:
    • 15% overhead or federal indirect rate
    • Pay for minimum wage in contracts
    • More funding for nonprofit infrastructure fund ($100 mm)
  • Federal Roundtable intended to track and analyze fiscal, policy, and legislative shifts in order to understand the impact on nonprofits and communities
    • In response to federal shifts, we are forming a roundtable with key partners:
      • Catholic Charities, Archdiocese of NY
      • FPWA
      • UJA-Federation
      • United Neighborhood Houses
  • Value-based Payment Commission, spurred from the Call to Action Commission Work, intends to strengthen our role as thought leaders and discuss:
    • Risks inherent in VBP for nonprofits;
    • What is needed to mitigate those risks and ensure nonprofits are able to participate effectively in VBP (g., contractual language, funding, oversight structures for our relationships with hospitals);
    • What we can contribute to achieving better health outcomes; and
    • How we can demonstrate our value.
  • Disaster Readiness and Resilience Work is a natural and inevitable pivot nonprofits will take in the time of disaster. HSC is at the forefront of these efforts to help the sector prepare in order to reduce the potential risk on individual agencies.
  • Media Strategy
    • Our media consultant has been an important tool to get our message out and to help encourage government to prioritize the things we are asking for
  • Advocacy Institute
    • Trainings direct lead advocates and coalition partners on making their advocacy more targeted, robust, and effective.
  • Reframing intends to shift the public mindset of human services and focuses on human potential and positive community impact.
    • Our new mission statement reflects this important change:
      • HSC strengthens New York’s nonprofit human services sector, ensuring all New Yorkers, across diverse neighborhoods, cultures, and generations reach their full potential.

HSC’s Priority and Strategy Council

Following HSC updates, the membership in attendance voted on a new Priority and Strategy Council. Thomas Krever, head of the Nominating and Governance Committee, described the process HSC went through this year to adjust our governance structure and create this group. The Priority and Strategy Council is chaired by Frederick Shack and works in tandem with the Board to set priorities and develop feasible strategies.

After a unanimous vote, we are honored to welcome the new Priority and Strategy Council which can be found here.


RFP Rater and Scorecard Updates

Following the recommendations in our Commission Report, HSC has created a new set of raters that will enable HCS to inform its members about risks and opportunities associated with bids for human services contracts with the State and City of New York.  The RFP rater will allow participants to rate Request for Proposals and the Gov Grader will produce an annual scorecard of the City and State agency contract management performance.

Update on Nonprofit Resiliency Committee

The final piece on the agenda was a panel discussion update on the Nonprofit Resiliency Committee, led by Jack Krauskopf, Director of the Center for Nonprofit Strategy and Management at Baruch College. All three co-Chairs provided an update on the work they are doing, including renewal and auditing processes and the creation of a service design toolkit for Request for Proposals (RFPs).

The co-Chairs are as follows:

  • Phoebe Boyer, Collaborative Service and Program Design
  • Louisa Chafee, Organizational Infrastructure
  • Frederick Shack, Streamline Administrative Process


HSC is looking forward to continuing our efforts on behalf of the sector. We would like to thank our funders for their support of our work:

  • Altman Foundation
  • The Clark Foundation
  • Department of Health and Mental Hygiene
  • The Leona M. and Harry B. Helmsley Charitable Trust
  • The Kresge Foundation
  • New York City Council
  • The New York Community Trust
  • United Way of New York City
  • UJA-Federation of New York

We have an ambitious agenda and we thank our members, supporters, and partners for your dedication and advocacy towards the strength and sustainability of our sector.

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Nonprofits Championed A Sorely Needed Boost For Workers; But the Law Adds to these Organizations’ Financial Challenges

A Missive from Human Services Council and FPWA
Second in a Series

Last year, New York and California adopted the historic $15/hour minimum wage law — an important vehicle for enabling self-sufficiency for workers and a defining symbol of the movement for an equitable economy.

The Human Services Council, FPWA, the Fiscal Policy Institute, and other organizations advocated strenuously for this measure – both out of our belief in its great value for those we serve and because many members of the human services workforce, whose salaries fall below the $15 per hour threshold and struggle financially themselves, would benefit.

These human services workers play vital and indispensable roles, helping low-income children, youth, families, immigrants, and seniors to rise above socioeconomic stresses, achieve stability, and pursue high aspirations. These efforts build well-being for those served directly and, they contribute to vibrant communities from which we all benefit. That these human services workers are contending with poverty is unacceptable, and a $15 minimum wage will translate to a meaningful quality-of-life improvement for them.

In New York City, the law will be implemented incrementally, rising to $15 per hour in 2018. To this point, the first installment has been executed, lifting the current minimum wage in the city to $11.50. Throughout the remainder of New York State, the current minimum wage has been raised to between $9.70 and $10 an hour depending on location, with the increase to $15/hour to occur in phases over the upcoming years.

To support the increase for human services workers functioning under City contracts, City government has extended the necessary funds to human services contracts, and City leaders have pledged to continue this practice until the law is fully executed.

But, with the exception of certain Medicaid-funded service providers, State government has not provided funds for the majority of human services workers functioning under State contracts and has not indicated a willingness to do so going forward — a move that has baffled and frustrated human services executives who are compelled to draw the funds from existing – and frequently highly compromised – organizational budgets.

The State has the ability to cover these expenses. Budgeting is a matter of asserting values and making choices and it is long past time that the State prioritized the human services workers and services that enrich our communities. The amount needed to fund the increase this year is $12 million and $25 million next year – sums that represents a mere .000007% and .000015% of the State’s budget this and next year, but that translates into sizable expenses for individual human services organizations. In dozens of interviews and focus groups conducted by Human Services Council, FPWA, and the Fiscal Policy Institute across the State, executives of human services organizations have described the budgetary pressures they continually face. One calculated that eliminating their entire senior management team would cover only a quarter of the increased expense associated with the minimum wage law.

Another factor, unacknowledged by the law, is that to avoid wage compression, human services workers with salaries currently at and above $15 per hour will be due increases and pay scales will need to be adjusted upwards across organizations. While these workers are deserving of raises, the budgets of most human services organizations cannot absorb them while still maintaining the same level of service provision — thereby compounding the difficulties of the unfunded minimum wage increase.

The primary reason for the budgetary dilemmas of human services organizations is chronic and systematic under-funding by government. Government contracts often fail to cover the full cost of services and they rarely provide overhead rates that permit programs to be properly supported by administrative functions. Also critical, government contracts frequently do not provide sufficient funds for the salaries and fringe benefits of human services workers while government employees (and those from the healthcare sector) with comparable responsibilities are far better compensated. This makes it difficult for human services organizations to retain and hire qualified staff, many of whom turn-over to government positions. In too many instances, these factors threaten the quality of services and prevent human services organizations from acting on bold and innovative ideas needed to reverse entrenched problems like high school dropout and homelessness.

State government’s withholding of the funds to cover the minimum wage increase is, then, highly ironic. The law was designed to support low-income people, but shortchanging human services organizations will have the effect of weakening these very entities that government has selected to carry out this mission.

The Human Services Council, FPWA, and Fiscal Policy Institute have created the Restore Opportunity Now campaign, a statewide coalition of over 350 organizations determined to secure greater investments in the human services sector. As Governor Cuomo and members of the State legislature negotiate the State budget, on behalf of our partners, we convey to them this message:

We applaud you for leading the effort nationally to increase the minimum wage. This policy will assist many New Yorkers, and it should serve as a springboard to others that further remedy our skewed economic systems. But if we are to achieve a truly equitable society, the human services sector – the engine for helping people transcend the barriers of class and race – must be entirely supported. It is imperative, then, that the minimum wage for human services workers is fully funded in the State’s 2017-18 budget.

-Contributed by Danny Rosenthal. Danny Rosenthal is a consultant to nonprofit organizations and a free-lance writer.

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Unfunded Mandate of Minority and Women-owned Business Enterprise Participation Goals

The story of the unfunded mandate is one that nonprofit organizations know all too well. When a policy requires agencies to allocate resources towards compliance and is implemented without additional funding, it is an unfunded mandate. The Minority and Women-owned Business Enterprise (M/WBE) participation goals set by Governor Cuomo is a prime example of the significant potential for negative effects from business-oriented regulations that are also enforced in the nonprofit sector without input from our sector.[1]

The 30% target set by Governor Cuomo for M/WBE participation is an attempt to incentivize businesses and nonprofits under government contracts to vend out to minority or women-owned business enterprises. This goal should be lauded as a socially progressive policy and a positive step in the effort to support economic development for these groups. However, it is one that the human services sector may find difficult to comply with and could potentially hurt the providers and beneficiaries of their services. Due to the financial difficulties faced by the human services sector, additional burdens or operational constraints with regards to compliance with new policies without appropriate funding can be detrimental to the services provided.

Nonprofit organizations want to be compliant with the M/WBE goals; however, the State has not created an environment where compliance is simple to accomplish for many organizations. Compliance can be difficult for nonprofits as compared to for-profit businesses because our subcontracting practices are drastically different. Usually, there are significantly more opportunities for for-profit businesses to subcontract to M/WBE firms in comparison to nonprofits. Despite this difference, the policy does not differentiate between the nonprofit sector and for-profit businesses.[2] Unlike for-profit enterprises, nonprofits do not have proprietorship; meaning they cannot be considered M/WBE’s themselves, so there is no way to include nonprofit subcontracts into these quotas. Allowing nonprofits to subcontract to other nonprofits within the M/WBE structure would increase their opportunity for compliance.

In addition, for human services organizations, it is not usual to have staff directly focused on dealing with reporting on M/WBE participation or other regulatory paperwork. An organization might need to reallocate or invest additional resources that could be used to provide services into the bureaucratic process of filing the required data on vendors and subcontracting plans in order to reach compliance.[3] This leads to an unfunded mandate if the funding levels provided by these State contracts do not increase, forcing organizations to use additional resources to be compliant. The regulations in their current state show how operating under the same regulations as a business can be detrimental to service provision if there is no additional funding to balance a mandate for increased investment of resources. Unfortunately, the State did not include our sector in the dialogue when creating these participation goals.

When it comes to the daily operational costs of a nonprofit, the best investment for a contract to provide services are in the workers providing direct services. The State should recognize that the human services sector mainly employs women and minorities, with its services largely serving to women and minorities. There should be more effort to adequately integrate nonprofit organizations into minority-owned and women-owned business initiatives without imposing business-oriented regulations that could prove to be detrimental to our vital sector.




Andrea Parejo, Government and External Relations Intern

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State Wage Order Raises Minimum Salary Levels for Overtime Exemption


The New York State Department of Labor finalized a wage order on Wednesday, December 28, that increases the weekly salary thresholds for administrative and executive work (the so-called “white collar exemptions”) effective Saturday, December 31, 2016.  This wage order will increase the number of workers who qualify for overtime pay.

The new salary thresholds will increase on a yearly basis as follows:

  • Employers in New York City
    • Large employers (11 or more employees)
      • $825.00 per week ($42,900 annually) on and after 12/31/16
      • $975.00 per week ($50,700 annually) on and after 12/31/17
      • $1,125.00 per week ($58,500 annually) on and after 12/31/18
    • Small employers (10 or fewer employees)
      • $787.50 per week ($40,950 annually) on and after 12/31/16
      • $900.00 per week ($46,800 annually) on and after 12/31/17
      • $1,012.50 per week ($52,650 annually) on and after 12/31/18
      • $1,125.00 per week ($58,500 annually) on and after 12/31/19
    • Employers in Nassau, Suffolk, and Westchester Counties
      • $750.00 per week ($39,000 annually) on and after 12/31/16
      • $825.00 per week ($42,900 annually) on and after 12/31/17
      • $900.00 per week ($46,800 annually) on and after 12/31/18
      • $975.00 per week ($50,700 annually) on and after 12/31/19
      • $1,050.00 per week ($54,600 annually) on and after 12/31/20
      • $1,125.00 per week ($58,500 annually) on and after 12/31/21
    • Employers Outside of New York City, Nassau, Suffolk, and Westchester Counties
      • $727.50 per week ($37,830 annually) on and after 12/31/16
      • $780.00 per week ($40,560 annually) on and after 12/31/17
      • $832.00 per week ($43,264  annually) on and after 12/31/18
      • $885.00 per week ($46,020 annually) on and after 12/31/19
      • $937.50 per week ($48,750 annually) on and after 12/31/20

The Department of Labor’s summary of the order can be found here.  The final rule can be viewed here (see § 141-3.2(c) on pages 141-14 through 141-16). Employers should seek counsel and take immediate steps to comply with the mandate.

As you know, these changes will have a significant impact on the nonprofit sector, which is why we submitted a public comment on the rule.  We continue to reach out to DOL staff and other relevant State officials and will keep you updated on our efforts.  We are also monitoring the federal Fair Labor Standards Act rule, which was enjoined (suspended) by a federal district court in Texas on November 22 and remains under court review.

As a reminder, the minimum wage will increase on December 31 as well. For certain New York City human services workers under City contract, the minimum hourly wage will increase to $12.00. The floor will increase to $13.50 on December 31, 2017, and $15.00 on December 31, 2018. This human services wage floor is fully funded.

In addition, the minimum wage will increase across the state. Beginning on the 31st, the minimum hourly wage for each region will be:

  • NYC – Large Employers (11 employees or more): $11.00
  • NYC – Small Employers (10 employees or fewer): $10.50
  • Long Island & Westchester: $10.00
  • Remainder of New York State: $9.70

The minimum wage will increase annually as follows.

General Statewide Minimum Wage Rate Schedule
Location 12/31/16 12/31/17 12/31/18 12/31/19 12/31/20 2021*
NYC – Large Employers (of 11 or more) $11.00 $13.00 $15.00
NYC – Small Employers (10 or less) $10.50 $12.00 $13.50 $15.00
Long Island & Westchester $10.00 $11.00 $12.00 $13.00 $14.00 $15.00
Remainder of New York State $9.70 $10.40 $11.10 $11.80 $12.50 **

Source: NYS Dept. of Labor

* Beginning in 2021, annual increases will be based on percentage increases determined by the Director of the Division of Budget, based on economic indices including the Consumer Price Index.

** Annual increases for regions outside of New York City, Westchester, and Long Island will continue until the rate reaches $15 (or $10 for tipped wages).

HSC continues to press for adjustments to human services contracts to cover the cost of these increases. For more details, visit the New York State Department of Labor website.

-Tracie Robinson, Senior Policy Analyst


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HSC’s 2016 Leadership Awards Reception

Tuesday, December 13 marked HSC’s 21st annual Leadership Awards Reception. The event was held at The Jewish Museum on 92nd Street and Fifth Avenue. We had over 250 guests in attendance and met our fundraising goal of $150,000. Thank you to everyone who was in attendance and for your support of HSC.

hsc-12-13-16_064The evening began with Jeremy Kohomban, HSC’s new Board Chair and President and CEO of The Children’s Village, welcoming our guests and introducing New York City Comptroller Scott Stringer and Deputy Mayor Richard Buery for opening remarks.


HSC recognized the following individuals for their service and dedication to the sector:

Advocate of the Year

  • Oliver Wyman & SeaChange Capital Partners

Equity Champion

  • Maya Wiley, Senior Vice President for Social Justice & Henry Cohen Professor of Urban Policy and Management, Milano School of International Affairs, Management, and Urban Policy

Next Generation Leaders

  • Nicole Bramstedt, Director of Policy, Urban Pathways
  • Jose M. Medellin, Director of Communications, Goodwill Industries of Greater NY and Northern NJ, Inc.

Leaders of Influence

  • Don Crocker, Senior Fellow, Support Center/Partnership in Philanthropy
  • Igal Jellinek, former Executive Director, LiveON NY
  • Nancy Kolben, Executive Director, Center for Children’s Initiatives
  • Peter Pierri, former Executive Director, InterAgency Council of Development Disabilities Agencies, Inc.
  • John A. Sanchez, Executive Director, East Side House Settlement
  • Robert S. Schachter, DSW, Executive Director, National Association of Social Workers, New York City Chapter

HSC’s Leaders of Influence: Don Crocker, Igal Jellinek, Robert Schachter, John Sanchez, Allison Sesso, Nancy Kolben, Joel Copperman

Special Recognition for Outgoing Board Chair

  • Joel Copperman, Chief Executive Officer, CASES

Allison Sesso and HSC’s former Board Chairs: Joel Copperman, Nancy Wackstein, Gordon Campbell

We would like to thank everyone for their continued support of HSC and the work we do!

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First in a Series

The time has arrived for a set of damaging practices to be remedied.

For decades, funding from government to provide human services has fallen well short of covering actual costs – resulting in a continual struggle by human services leaders to operate high-caliber programs, maintain skilled and fairly compensated workforces, and exercise strong management functions.

Let us consider major aspects of this dilemma.

            Inadequate Salaries and Salary Disparities      

The budgets of contracts between human services organizations and government frequently do not allow for compensation for staff consistent with responsibilities and necessary qualifications. This occurs with such positions as early childhood education teachers, social workers, youth development specialists, and family counselors. Ironically, many human services staff, who have dedicated themselves to helping people contending with serious challenges find that they themselves are in need of the same sorts of services they are providing.

These insufficient salaries and benefits translate to a difficultly in recruiting and retaining high-performing staff, leading to disruptions in care and low morale among staff.  Moreover, in a number of cases, government agencies, hospitals, and universities offer compensation for these sorts of positions that is considerably more generous than that which human services organizations can afford.

Strong applicants continually express an interest in joining the human services field but indicate that given personal financial pressures, they often feel compelled to opt for employment in these other sectors.

            The Under-Funding of Overhead

When contracting with human services organizations, city and state government usually limit the amount of funds that may be expended on overhead, also known as “indirect expenses,” for such functions as financial management, human resources, information technology, and facilities management. The large majority of human services contracts allow for overhead rates of between 8% and 10% – but actual overhead rates for human services organizations usually range between 12% and 20%. This results in sizable deficits, compelling human services organizations to function without adequate management capacity and to scramble to raise supplemental funds.

However, the federal government employs a far more rational approach. It allows human services organizations, based on review of their financial data, to obtain standard overhead rates that are automatically applied in all cases in which they make use of federal funds. Human services leaders report that the process by which rates are determined is reasonable, and that receiving reimbursement for overhead that aligns with actual expenses goes far toward enabling high performance and financial stability.

We are, therefore, calling on the city and state government to adopt the federal practice.

             Innovation and Impact

Human services organizations aim to embrace bold ideas and forward thinking. Regrettably though, because they are so strained by insufficient funding from government, they too often lack the wherewithal to engage in innovation. If properly resourced, human services organizations would make use of philanthropic support to incubate, pursue data-driven strategies, and ensure superior services.

To achieve the highest impact, human services organizations must be enabled to stop operating in a climate of constant crisis. Like the people they support, they cannot be expected to thrive while their basic needs go unmet.

             A Renewed Partnership with Government

The relationship between the human services sector and government is symbiotic.  Government calls upon human services organizations to deliver the indispensible services that it itself is not equipped to provide. And human services organizations are equally dependent on government – indeed, government funds are the primary source of income for most human services organizations, often comprising more than 80% of their budgets.

We believe that public officials making decisions about funding for human services are well intentioned and that we share goals and ideals with them, and that fiscal austerity has been the primary factor limiting investment in the sector. But we must now address the fact that this practice is injurious: it jeopardizes the quality of services and the very viability of the organizations entrusted to deliver them, setting up a situation that will result in continuing social problems and increased costs later.

We are pleased that the city and state governments have taken steps to begin strengthening the human services sector. The city has established a Nonprofit Resiliency Committee designed to enable us to arrive collaboratively at solutions and we will take part fully in this effort. The state has created the Nonprofit Infrastructure Capital Improvement Program and is refining systems like Grants Gateway, which simplifies the process by which human services organizations engage in contracts with the state.

While these efforts are important, we know there are further opportunities to strengthen human services.  And toward this end, our organizations will be among the primary participants in a campaign called Restore Opportunity Now that will vigorously make the case for key investments and systems improvements in the sector.

We look forward to cooperating with our many partners throughout government and the human services sector to make the critical changes necessary to equip New Yorkers to realize high aspirations and support the organizations that serve them!

-Contributed by Danny Rosenthal. Danny Rosenthal is a consultant to nonprofit organizations and a free-lance writer.

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With the largest population in the U.S., New York City has a variety of demands for essential social services ranging from after school programs and housing to medical care. Nonprofit human services providers meet this demand and provide critical interventions to millions of New Yorkers each year. They contract with government and leverage private dollars to build programs to meet community needs. The cost of providing these services is constantly increasing. They require the hard work, compassion, and dedication of an entire industry to implement them. For all of that passion and drive, the organizations providing programs throughout New York are impeded by a lack of funding.
More specifically, we must increase the funding for Other than Personal Services (OTPS) in order to help organizations provide these essential services. OTPS is a crucial part of nonprofit budgets and covers crucial things like rent, insurance, technology, and all other costs aside from salaries. These costs are imperative for any organization, nonprofit or otherwise, to function. A lack of funding for OTPS affects nonprofit programs and impedes them from providing the best services possible.

For example, let’s look at a nonprofit providing programs and services to children. Aside from the cost of staff, the organization has the cost of the facility where these services are located; the cost of health insurance for the staff providing these services; and the cost of liability insurance. Every year, more than 85% of the organization’s current leased properties sees an annual increase of 2% or greater. Their health insurance increases annually despite using brokers, going to market, and making plan changes/adjustments. Their liability insurance doubled over the course of five year, rising from $700,000 in FY10 to $1.4M in FY15. Additionally, government contracts have administrative requirements, like reporting and licensing, that cost money but are often not paid for as part of the contract. Reporting to the State Justice Center is an example of an important accountability requirement, but the costs associated with reporting and compliance continue to rise. When factoring in salaries for additional hours, paperwork, follow-up, and interviews, these processes cost at least $35,000 annually. As a result, the organization has had to postpone larger maintenance projects at sites.

bridgeAs this lack of investment continues, we will eventually see the quality of the program decline. The best solution is to invest in nonprofits. The 2.5% cost-of-living-adjustment increase that was implemented by Mayor de Blasio shows that the City is committed to the human services sector. To ensure that the sector continues to provide quality social services, we must also invest in OTPS as well. Now is a perfect time to take advantage of New York’s economy, which is expected to collect $53.4 billion in tax revenue for this year alone.

The current economic boom in the City as well as the uncertainty of the future of nonprofits in the face of the election results, makes this an important time to invest. Based on the campaign rhetoric of the President-elect, it is crucial we invest in the sector in the face of new federal policy under his administration. We do not know what the future holds and cannot assume for better or worse. What we do know is that the nonprofit sector needs an immediate change to survive whatever tomorrow holds.

Nicholas Galang, Government and External Relations Intern

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Building Well-being: Nonprofit Infrastructure Week

In a time of uncertainty and consternation, it’s heartening to look at something like the Governor’s Nonprofit Infrastructure Capital Investment Program (NICIP) and be reminded that our elected officials are doing vital and inspiring work every day, even if that work will never make national headlines. Last year, the State recognized the sector’s urgent need for improvements in infrastructure and pledged $100 million dollars to lend support to nonprofit organizations that enhance the well being of our communities.

Infrastructure is something that we all take for granted. No one spends much time thinking about bridges or electrical grids until the power goes out or the bridge begins to crumble. Likewise, nonprofit infrastructure is often overlooked . The nonprofit world has seen massive cuts in funding over the last few years, seriously constraining their ability to invest in the basic necessities that keep them in business. Things like working elevators, electricity, up-to-date technology, proper heating and cooling equipment, computer equipment, and functioning sprinkler systems and fire alarms. Funders want their dollars to go directly toward the services they are supporting, but oftentimes narrowly earmarked funds leave organizations with no way to deliver them [1].

The NICIP was created to help human services nonprofits address their infrastructure needs. The first NICIP request for applications (RFA), issued in 2015 [2], elicited over 600 applications with requests totaling $280 million dollars. In a state with around 97,700 nonprofit organizations [3], it isn’t surprising to discover that so many nonprofits have unmet infrastructure needs. Faced with almost $1 billion dollars in funding cuts since the Great Recession [4], nonprofits have been struggling just to deliver services, and many have been unable to invest in things like updating their computer systems or replacing outdated heating and cooling systems.. For this reason, we are advocating making the NICIP an annually recurring investment of $100 million dollars.

Research shows that “[o]rganizations that build robust infrastructure—which includes sturdy information technology systems, financial systems, skills training, fundraising processes, and other essential overhead—are more likely to succeed than those that do not.”[5] Investing in infrastructure is an important way to make our communities and our State stronger, and when we have organizations that can operate at their full potential, the results are well worth the cost. This idea drove our advocacy for the creation of the NICIP and continues to drive our efforts.

To build momentum for the coming legislative session, HSC launched the first ever Nonprofit Infrastructure Week campaign as a way to celebrate the creation of the NICIP and to advocate for its expansion. This statewide campaign engaged nonprofits in online and offline advocacy.

  • We devoted the first day to thanking our State leaders, including Governor Cuomo, for creating the NICIP. Their generous support not only directly helps organizations, but raises awareness of our needs on a statewide level.
  • “Tech Tuesday” was next, highlighting the crucial technology updates that nonprofits need to be effective in today’s connected world and to comply with ever-increasing mandates.
  • Wednesday was focused on the perennially important needs around heating, cooling, plumbing, and all the other things we take for granted but without which we simply could not operate.
  • Thursday was devoted to accessibility, which is especially important since many nonprofit organizations’ sole purpose is to serve seniors and people with disabilities.
  • Friday culminated in a look at investing in things that keep clients and employees safe and secure.

The social media component of the campaign garnered significant engagement, and our hashtag, #buildingwellbeing, even reached trending status.


We are grateful to the many providers and supporters who liked and shared our posts and came up with their own content. We are especially thankful to Catholic Charities of New York’s for writing their own guide to help their members get involved! [6]

As we move into the busy winter months, HSC, UJA, UNH, and Catholic Charities will ramp up our advocacy for this important part of our mission. We hope that you will join us in our campaign to make the NICIP a recurring program of $100 million dollars a year.

Although Nonprofit Infrastructure Week has passed, it’s not too late to make a personal visit to the district office of your Senator or Assembly Member, so they can get to know you and your organization before the crazed lobbying season begins after the first of the year.


The NICIP and the campaign for its expansion have energized and inspired us, and we hope that you join us in fighting to get organizations the resources they need to do their incredibly important work.

Meara Levezow, HSC Policy Intern 


[2] The first solicitation was issued on October 28, 2015. That solicitation was cancelled, and a new one was issued on August 5, 2016.



[5] Ann Goggins Gregory and Don Howard, “The Nonprofit Starvation Cycle”, Stanford Social Innovation Review, Fall 2009.



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Moving Beyond the Election

This election cycle was rough, to say the least. And for good reason, many of us are feeling anxious about what lies ahead. To move forward, I think we need to reflect on some of the deeply held beliefs this process unearthed and the implications they have for our work.

Some extremely concerning privilege based values surfaced in this election process. How we choose to move forward and heal as a country has real repercussions for the communities we work in and our ability to effectively meet our missions.

During this election cycle, it seemed to me that personal responsibility as the key driver of success or failure was pitted against oppressive dynamics as if it’s wholly one or the other that determine one’s fate. The framing of the work we do and beliefs about what causes communities and people we serve to struggle matters because they drive public policy choices and resources.

As a mission driven sector focused on maximizing human potential, we know the answer is more complex. We are intimately aware of the intersecting systemic biases at play driving opportunities and success. Much of our work seeks to harness individual determination and resilience, to help people succeed despite the odds; yet the oppressive dynamics facing those we serve are undeniable. We need solutions that appreciate both of these truths and right now it does not seem like we are likely to achieve the policy changes or investments needed to realize the progress we are desperate for any time soon. This is, at best, frustrating.

But I am trying to harness my feelings of anxiety, frustration, fear, and disappointment by thinking about how we as a sector can find our voice and proactively counter the “personal responsibility” narrative which fails to appreciate systemic biases and perpetuates inequity. We engage with people and communities every day; we are well positioned to contribute to a counter narrative that better appreciates the systemic reasons people are struggling and highlights how nonprofits work to counteract the systematic failures that bring so many people to our doors.

At HSC, we will continue to do our part and work to develop the voice of the sector in these areas and create space for collective reflection and thinking on workable solutions. It is critical that together, we also engage in the very difficult work of self-examination to better appreciate how our own actions or inactions contribute to the oppressive systems at play and contribute to the “personal responsibility” narrative. Our failure to take on these challenges will only serve to undermine our collective success.

We look forward to taking an active role in the nation’s healing process and contributing constructively to the dialogue about how to move forward.
Allison Sesso
Executive Director
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