#OTPSMatters

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.
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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.

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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 

 

[1] https://nonprofitquarterly.org/2008/01/25/why-every-foundation-should-fund-infrastructure/

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

[3] http://www.nycon.org/files/7814/2653/2398/Palm_Card_Template_2015.pdf

[4]http://survey.nonprofitfinancefund.org/?filter=state:NY%7Corg_type:Human%20Services

[5] Ann Goggins Gregory and Don Howard, “The Nonprofit Starvation Cycle”, Stanford Social Innovation Review, Fall 2009. http://www.ssireview.org/articles/entry/the_nonprofit_starvation_cycle/

[6] http://catholiccharitiesny.org/blog/tips-tweets-and-infrastructure-awareness-too?utm_content=bufferbf223&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer

 

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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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NYN Media Cause Award: #15andFunding

HSC is pleased to announce that we, along with our partners Fiscal Policy Institute (FPI) and FPWA, have been awarded a New York Nonprofit Media 2016 Cause Award! The award recognizes our joint commitment and success in the field of Employment; specifically, our efforts with the #15andFunding Campaign.

The statewide #15andFunding Coalition was formed to voice the impact of low wages on the human services workforce. The Coalition included over 90 organizations from across New York State including New York City (throughout all five boroughs), Long Island, Westchester, Hudson Valley, Capital Region, and Western New York.

We co-led this campaign to call on Governor Cuomo and the Legislature to invest in New York’s human potential and include human services providers and Medicaid-funded care workers in the minimum wage increase to $15 per hour, as well as funding by the State for the increased wage for nonprofits with State contracts. This work grew out of a successful initiative to institute a funded $15 wage floor for social services agencies with New York City contracts.

Although human services workers were included in the increased wage mandate, additional funding was not included in the State FY 2016 budget. As such, FPI, FPWA, and HSC will continue to advocate for the State funding of the increased minimum wage through our new campaign, Restore Opportunity Now (RON), and address the chronic underfunding of our sector.

The Restore Opportunity Now campaign asks the State to recommit to the human services sector so that we can continue to build well-being within communities by supplying critical interventions and support. We ask the State to provide:

  • Fully funded contracts that are reflective of the real cost of service provision,
  • Salaries and benefits which allow nonprofits to recruit and retain high quality staff, and
  • Program funding which meets the growing needs of New Yorkers.

It is crucial that the State recognizes the need of the sector’s work in building well-being which affects all New Yorkers and its communities. You can support the Restore Opportunity Now campaign by signing on here.

We would like to thank our funders, The Clark Foundation, the United Way of NYC, and New York Community Trust for continuing to support this vital work.

We would also like to recognize our members who also won NYN Media 2016 Cause Awards:

Congratulations to JCCA on your Cause Award for your work in Education.

Congratulations to The THRIVE Network on your Cause Award for your work with Disability Access.

Congratulations to The Children’s Aid Society on your Cause Award for your work in Education.

Thank you for your dedication to human services. The sector would not be the same without you!

Contributed by Janice DeRito of the Human Services Council.

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Cost Escalation and Nonprofit Sustainability

Those following the news in the human services realm over the last few years know that the financial situation of many nonprofits has become increasingly concerning. In our recent report on the precarious fiscal condition of New York’s nonprofit sector, we at HSC outlined how chronic underfunding of contracts, development of programs and metrics without meaningful input from service providers, late payments by government agencies, and failure to pay interest when it is due can lead to financial strain or collapse for even our largest and most robust organizations. You also know that the cost of living and the cost of doing business—particularly in New York City—have skyrocketed over the past decade, while funding of human services contracts has stagnated. For this reason, HSC has continuously called for the addition of cost escalation clauses to human services contracts.

A cost escalation clause, or escalator clause, guarantees that the funder will adjust payment to reflect any cost increases that are out of either party’s control, usually expenses that haven’t been adjusted for inflation.[1] Nonprofits report that expenses for rent, insurance, repairs to infrastructure, supplies, and improvements in technology have all increased at a rapid pace over the last decade[2]. In the absence of cost escalation clauses, agencies must scramble to cover rising costs by pulling money from other budget areas. For many organizations, this has meant laying off or furloughing staff, reducing salaries or benefits, freezing hiring, or even shuttering certain programs. Ultimately, these actions have the effect of reducing the quality of and access to critical services that uplift communities.

Government agencies often blame nonprofits for failing to properly oversee their financial affairs, and recommend that they should run their agencies more like for-profit businesses. Cost escalation clauses are a perfect example of how nonprofits can better plan for the future, and they come right out of the for-profit sector’s playbook. Any good contract lawyer would advise a construction company to include a cost escalation clause to account for future increases in the cost of materials and labor. Those who provide necessary and life-saving care for our fellow New Yorkers deserve the same protection.

While ideally every business that contracts with government would have a cost escalation clause in its contracts, human services organizations are particularly susceptible to inflation because so much of their business is tied to the astronomical rent increases that are happening across the City. Not only do these increases affect the spaces that the organizations operate from, but the lack of affordable housing[3] has also led to a drastic increase in homelessness, food insecurity, and overall financial pressure on New Yorkers, thereby increasing the number of individuals who are in need of human services.  This is to say nothing of the staff at these organizations, whose rent is also going up while their wages are not.[4] This keeps nonprofits in the position of being unable to attract and retain the most talented candidates for jobs and leads to high levels of turnover. This also doesn’t help sustain a well-run agency that can keep track of its financials and deliver the high-quality services that communities need.

Cost escalation clauses are only one thing out of many that we can fight for to make our organizations stronger and better equipped to serve. No organization whose mission it is to help everyone in our City live a fulfilling and healthy life should have to close its doors because of rigid contracts that fail to keep pace with rising costs. HSC will continue to advocate for contracts that are reasonable, fair, and equitable, and we look forward to working directly with the newly created New York City Nonprofit Resiliency Committee and New York State Not-for-Profit Contracting Advisory Committee to achieve this goal.

Meara Levezow, HSC Policy Intern 


[1] http://www.referenceforbusiness.com/encyclopedia/Ent-Fac/Escalator-Clauses.html

[2] http://nynmedia.com/news/nonprofits-call-for-contract-increases-to-cover-administrative-costs

[3] http://www.nytimes.com/2015/02/25/nyregion/new-york-rents-outpaced-inflation-over-3-years-census-data-say.html

[4] http://www.bizjournals.com/albany/blog/health-care/2016/01/15-minimum-wage-for-health-care-human-services.html

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HSC’s Annual Membership Meeting 2016

On Wednesday, September 14, the Human Services Council hosted our 2016 Annual Membership Meeting. The morning of #WorkingForChange included a panel discussion on the challenges faced by the human services workforce, a briefing on HSC’s FY17 work, an update on our governance change and vote on a slate of our new Board of Directors, and a presentation from Bridgespan on real costs of providing services.

Working for Change: Challenges of the Human Services Workforce Panel

Human service providers – and a diverse workforce – form the foundations of wellbeing by delivering services for physical, emotional, and economic health in communities served. There are many constraints that our sector faces as we work to support and implement progressive labor policies. It is critical that we overcome these constraints in order to strengthen the human services workforce and expand opportunity within it.img_0581

In a dynamic discussion facilitated by Jonathan Bowles from the Center for an Urban Future, panelists addressed said issues from an economic lens; they explored factors that drive wages and which policies can sustain and strengthen our sector’s workforce. The panel comprised the following individuals:

  • Heidi Shierholz, Chief Economist to U.S. Secretary of Labor Thomas E. Perez
  • New York State Senator David Carlucci, Chair of Senate Committee on Social Services
  • New York City Council Member Julissa Ferreras-Copeland, Chair of Committee on Finance
  • Melanie Hartzog, Deputy Director at NYC Office of Management and Budget (OMB)
  • Christine C. Quinn, CEO of Win

The discussion highlighted the way inequity manifests in the frontlines of the sector and emphasized the crucial role of direct service staff. Dr. Shierholz noted that, “Human services workers will take lower pay for meaningful work, but still need a living wage.” In conveying the harsh reality that many direct service staff in human services agencies need the same services they might be providing, Ms. Quinn alluded to a point made by Dr. Shierholz: the workforce of the social services sector is disproportionately women of color and individuals of low socioeconomic status.

Panelists discussed the difficulty of retaining staff to maintain the quality services that serve communities without funding for organizations for wages and indirect costs. However, Councilmember Ferreras-Copeland challenged the sector to communicate our full costs to the City Council because “Nonprofits should not assume that elected officials know the real cost of running programs.” As such, our sector also needs to speak with a collective voice and what is needed to fully serve New York’s communities.

Updates on HSC and HSC FY17 Priorities

Following the discussion, Allison Sesso, Executive Director of HSC, presented HSC’s vision and plan for the upcoming year. She honed in on points discussed during the panel: “if we are to effect tangible change, we can no longer afford to allow the current approach in which providers are paid less than true cost, have no funding to invest in our institutions, and continue to employ a low-wage workforce.”

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Allison Sesso, Executive Director of HSC

HSC’s “Call to Action” Commission Report, released earlier this year, largely sets out the vision for the change we need and positioned HSC as a leading voice on nonprofit issues. HSC’s report has been referenced in stories found in mainstream media and national nonprofit publications and HSC has been asked to present around the country. As promised, the “Call to Action” is an active report and will continue to drive our work in the coming year.

Highlights of HSC’s work in the coming year include:

  • Risk assessment including the development of an RFP Rater; a Government Agency Performance Scorecard; and participation in Ahead of the Curve, a collaborative brainstorming amongst capacity building groups serving NYC nonprofits around risk
  • Program Collaboration through a new working group being launched by the City and partnership with State leaders like Fran Barrett, the Interagency Coordinator for Non-profit Organizations
  • Capitalizing the sector by understanding the real costs of running various programs and advocating for greater investments by the City and State for our organizations and the human services workforce
  • Disaster Preparedness by partnering with the DOHMH to develop a sector-wide plan for disaster response
  • Equity Agenda through encouraging our sector to appreciate our own biases at play and actively developing and moving strategies forward for these conversations

Additionally, she introduced the launching of HSC’s newest campaigns, Restore Opportunity Now and Fund the 15, with our partners FPWA and FPI to help highlight the role of human services and make a case for further investment by the state.

After detailing HSC’s development of statewide partnerships, legislative goals, and grassroots functionality with the Advocacy Institute, Allison spoke to the internal restructuring of HSC, and introduced changes to our Governance approach and membership engagement strategy.

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Sesso with Joel Copperman and Dr. Jeremy Kohomban

HSC’s New Board of Directors

Nancy Wackstein, the head of HSC’s Transition Committee, described the process HSC went through this year to change our Governance structure and introduced the new Board slate. Joel Copperman, HSC’s Board Chair, presided over the vote for our new Board of Directors, which can be found here. The vote decreased the size of our Board of Directors to thirteen members with an additional three “lay” individuals to be identified, recruited and vetted at a later date.

After a unanimous vote, we were honored to welcome Dr. Jeremy Kohomban as our new Board Chair and the rest of our new Board of Directors. Their leadership will be instrumental in building an even stronger and more impactful HSC.

We would also like to extend our deepest gratitude to Joel Copperman for serving as the Board Chair from 2010-2016. His leadership and partnership has been instrumental to HSC’s growth and positioning. We appreciate the amount of time, effort, and dedication Mr. Copperman has poured into HSC to make sure we continue to work towards our mission and vision. We are also very thankful that Mr. Copperman will be staying on for one more year in the ex-officio role to ensure a smooth transition.

Bridgespan Presentation – Paying What it Takes to Achieve Results

To conclude HSC’s Annual Membership Meeting, Alex Neuhoff and Leslie MacKrell from Bridgespan gave a presentation on the study found in their article, “Pay What It Takes Philanthropy,” on nonprofit indirect costs. In their presentation, they discussed the fact that indirect costs for organizations differ greatly across segments and sectors and that indirect costs at organizations are often greater than what is typically provided by funders.img_0584

Bridgespan led a conversation around their study’s methodology and previewed their upcoming research project on looking at the indirect costs of greater numbers of nonprofit organizations. To find a copy of their presentation, click here.

Understanding the real or true costs of doing business and building funding approaches that take these into account is critical to the future of nonprofit human service organizations.  HSC is focused on this topic as it is a key component to the financial health of our membership and we are thrilled to be engaging Bridgespan in conversations on this topic.

Closing

HSC is looking forward to working on behalf of the sector in this coming year. We would like to thank our members and all of 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 look forward to working with all of our members, funders, and supporters this coming year!

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A Personal Look at Working in the Human Services Sector

Labor Day is the day we celebrate the social and economic achievements of the workers in this country and there are few better deserving of that praise than those employed in the human services sector. They provide an incredible array of services that reach a vast number of people each year- all with endless passion and patience.

Growing up the daughter of a social worker, the value of public service and helping others was instilled in me from an early age. I began my career as an assistant teacher at a preschool, hoping to make a significant impact in the lives of children at a pivotal time in their development. Despite my strong interest in education, I soon found myself frustrated by insufficient pay, a cap on my hours at 35 –  instead of 40 – depriving me of full time benefits, and the high rate of turnover at the school as many of the most talented teachers left their positions after only a few years (some even after just one) to pursue more lucrative endeavors. I did not realize at the time that this experience had prepared me for understanding the challenges faced by the entire nonprofit sector. Since leaving that profession myself, I switched gears and have spent the majority of my time interning with nonprofit organizations. However, as I see many of my peers graduating from law school, entering technology and engineering fields and generally building stable, professional lives for themselves, I find myself with some concerns about my choice of future profession.

The stereotype of life at a nonprofit is that you’ll be exhausted and you’ll never make any money but at least you’ll love what you do. There is some truth to that. The sector recurrently has problems offering competitive salaries and benefits to attract and promote young talent which can lead to high rates of employee turnover- 57% of those who left the sector cited compensation as the premier factor in their exit.1 Although the big win of the 15 and Funding campaign to get the New York State minimum wage raised to $15 per hour represents a move in the right direction, government has not augmented funding in human services contracts (15 and Funding) accordingly. This has the potential of leaving organizations without the resources required to execute the raise and forcing them to downsize and/or cut programs.2 In 2015, the New York City Council approved a 2.5% Cost of Living Adjustment (half of the amount advocated for by the Human Services Council) for workers with government contracts but with no provision for a perennial adjustment to keep up with inflation. Over a year later, many of the challenges in implementation have not been resolved resulting in many organizations waiting for funding.3

But much of this is caused or at the very least aggravated by what is possibly the largest contribution to nonprofits’ financial struggle- late and often completely underfunded contracts with government from which many nonprofits are paid only 80 cents on the dollar.4 Last year in New York City alone, fewer than 30% of government contracts were paid on time- a significant rise from only 13% in 2014.5 The lack of increase in funding for OTPS leaves many unable to make well overdue repairs to their infrastructure, pay for their rent and program supplies, and conduct crucial staff development trainings.6 How can organizations be expected to simply stay above water let alone provide services to the millions of people they support each year when their predominant source of revenue is inconsistent at best, and frequently overlooked or excluded entirely from political action, discourse, and platforms?

As a young person entering the job market, I want to know that wherever I choose to work will offer me ample opportunities to learn and to grow but this appears harder to find than one might think. Two thirds of workers in my age group are planning on leaving their current jobs by 2020, many even seeing themselves elsewhere within the year.7 A dearth of staff development, mentoring initiatives and employee retention strategies (frequently due to the aforementioned unreliable funding that might otherwise be put towards such initiatives) are cited as increasingly problematic by both employees and organizations. The advancement stagnation this results in perpetuates the high turnover at every stratum- at the lower levels, a reported 51% of organizations cited keeping entry level staff as their greatest retention issue8 and at higher management levels, internal promotion only represents 30% of appointments at nonprofit organizations.9 There is no way for this to be remedied without the attention and support of government.

I, of course, have specific human services and social justice issues I am personally inspired by and particular kinds of positions in which I can see myself performing best. But first and foremost I want to work somewhere that acknowledges my skills and my potential. I want to work somewhere that is dedicated to my advancement; dedicated to the support of its workers in a career climate that all too often sees their staff as expendable. My time at the Human Services Council has been a perfect example of that. The values I see reflected in the guiding principles and goals of human services client work- respect, self-determination, importance of community and creation of change from within- are indistinguishable from those I desire in my future place of employment. Those values, the commitment to public service and betterment of individuals, communities or society at large, are exactly what I hope to spend the rest of my working life espousing and I am confident in the ability of the sector to continue strengthening themselves while they strengthen the world.

By Caitlin Orzeck-Byrnes

Citations:

1 http://ssir.org/articles/entry/the_nonprofit_leadership_development_deficit

2 http://www.nyaprs.org/e-news-bulletins/2016/014855.cfm

3http://www.humanservicescouncil.org/Private_Documents/Statement%20on%20the%20FY17%20City%20Executive%20Budget.pdf

4 http://www.humanservicescouncil.org/Commission/HSCCommissionReport.pdf

5 https://www.osc.state.ny.us/contracts/reports/2015/pcl_report.pdf

6 http://nyslant.com/article/opinion/connecting-the-dots-on-nonprofit-underfunding.html

7 http://www2.deloitte.com/global/en/pages/about-deloitte/articles/gx-millennials-one-foot-out-the-door.html#report

8 http://www.nonprofithr.com/wp-content/uploads/2013/03/2013-Employment-Trends-Survey-Report.pdf

9 Thomas J. Tierney, The Nonprofit Sector’s Leadership Deficit, The Bridgespan Group, 2006, p. 17. The Bridgespan Group’s June 2015 “Leadership Development Deficit Survey” received replies from 438 nonprofit senior leaders. Jean Martin, “For Senior Leaders, Fit Matters More than Skill,” Harvard Business Review, January 17, 2014.

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Improvement in Disaster Readiness, But Rigorous Efforts Remain Necessary

Following a Comprehensive Research Initiative, HSC Reports on the State of Disaster Readiness in the Human Services Sector

Disaster Preparedness 2016 Report CoverAt a forum organized by HSC on August 3rd on the subject of disaster preparedness, HSC released a report of findings and recommendations of a four-month study examining the disaster-related practices and perceptions of NYC-based human services.

HSC performed the project in cooperation with the NYC Department of Health and Mental Hygiene, which provided funding and input, along with the Baruch College School of Public and International Affairs, which played a vital role in conducting research.

Of 582 human services leaders invited to participate in an extensive online survey, 210 took part, translating to a 36% response rate, which considerably exceeds average response rates – an encouraging finding in itself, suggesting a strong interest in the subject.  Complementing the survey were focus groups and individualized interviews.

Consistent with the high awareness demonstrated by the survey response rate, an encouraging finding is that the majority of respondents reported that their organizations have recently developed written Emergency Response and Continuity of Operations (COOP) plans. Large organizations are far more likely to develop such plans than small ones, and most organizations of all sizes have yet to enter into partnerships with other organizations allowing for coordinated planning around post-disaster service delivery.

This subject of coordination was explored extensively in the survey and what emerged, quite notably, is that many human services leaders are unsure as to which government entity they should relate. To a significant extent, they believe that NYC Emergency Management leads the immediate response to disasters, but they question which office assumes that role as short-term relief efforts give way to long-term recovery programs.

Begging attention, findings regarding funding were striking. Respectively, 92%, 93%, and 93% of respondents reported that they lacked funds for disaster preparedness, immediate response to disasters, and long-term disaster recovery.

Among HSC’s recommendations are:

  • Establishing a high-level City government office responsible for coordinating disaster-related efforts with the human services sector and NYC Emergency Management and the numerous other government agencies which deal with disasters
  • Establishing a Human Services Operations Center to serve as a counterpart to the City’s Emergency Command Center and, related, developing a human services sector-wide system of post-disaster communication
  • Better integrating grassroots organizations into disaster preparedness and response efforts
  • Developing funding mechanisms that permit human services organizations to prepare and respond to disasters with less risk to destabilizing their budgets
  • Allowing for flexibility within ongoing government contracts for human services – as examples, enabling a child care center to convert to a community center, or a senior center to a senior-visiting program

HSC is concerned that the delays and disruptions that occurred following Sandy, which resulted in unnecessary distress to those affected, would be repeated if another major disaster were to occur imminently — particularly as lessons learned and relationships established fade.

At the same time, we are encouraged that a trend to greater preparedness is increasing and that heightened partnership between the human services sector and government is taking hold – evidenced at our recent forum, in the efforts of a Mayoral task-force on this topic that will soon issue recommendations, and in our own ongoing collaboration with NYC Department of Health and Mental Hygiene.

We anticipate much continuing progress over the next months.

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

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Let’s Get Ready: HSC’S Disaster Forum Sparks Inter-Sector Dialogue and Spurs Planning Efforts

On August 3, HSC asked a gathering of more than 100 leaders from NYC’s human services sector and the City, State, and Federal government: if we are beset by another disaster such as 9/11 or Sandy, Are We Ready?

The answer, decidedly, was No — but with the acknowledgement that we have achieved significant progress and that we are poised for an upgraded partnership between the human services sector and government that will position us to bring post-disaster support to affected communities in ways that are faster and better coordinated than ever in the past.

20160803_091026New York City Deputy Mayor Dr. Herminia Palacio, a veteran of the Katrina recovery, provided opening remarks that established a collaborative if sobering tone.  She spoke of the vital nature of the joint effort that must occur between government and human services organizations and she contradicted the axiom that disasters do not discriminate. Inequities with which low-income populations are already suffering are only amplified after disasters, she commented, and she asserted that our planning must take this factor prominently into account.

Disaster Preparedness 2016 Report CoverFollowing Deputy Mayor Palacio, HSC Executive Director Allison Sesso also expressed the importance of a structured and ongoing relationship between the human services sector and government, and she highlighted the findings of a just-completed research effort led by HSC in cooperation with the NYC Department of Health and Mental Hygiene and CUNY Baruch that gauged the degree to which the human services sector is prepared for disaster.

Among numerous recommendations, the report calls for:

  • establishment of a high-level City government office charged with coordinating with the human services sector and relevant government agencies regarding disaster-related matters;
  • better engaging grassroots organizations in disaster planning and response; and
  • ensuring that human services are financially equipped to deal with disasters.

For a summary of the recommendations, click here.

20160803_123140The session concluded with a panel entitled “Pushing Forward,” designed to arrive at consensus about the priorities to be collectively addressed. The group agreed about the imperative of a relationship between the human services sector and government characterized by candor and flexibility; a need for clarity about the roles and responsibilities of government entities; and that strenuous efforts should be made to ensure that human services organizations engaged in disaster work are equipped to do so while also continuing to pursue their everyday missions.

“We’re pleased about the tenor of this discussion and we expect that our collective state of readiness will improve, said Allison Sesso. But goodwill and a good conference cannot be cause for contentment.  We need to move forward aggressively.  What if disaster hits tomorrow?”

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

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Government Contracting Delays Hurt Nonprofits and Communities

Although New Yorkers from all walks of life rely upon nonprofits to provide vital services, nonprofits can neither count on the government to pay them on time nor in full, despite New York State’s preexisting laws. The State’s human services providers continue to face the epidemic of late contracting, which has a detrimental effect on both the organizations themselves and the communities they serve.  According to the most recent annual prompt contracting report released by Comptroller Thomas DiNapoli, State agencies processed 61 percent of their nonprofit contracts late in 2015.   While this is certainly an improvement from 2014, when the State processed a staggering 77 percent of its nonprofit contracts late, the percentage is still unacceptably high and jeopardizes the ability of nonprofits to carry out their mission. [1] Last year, the government spent $129,824 of taxpayer dollars paying interest on delayed contracts, which is money that could actually be spent providing nonprofits with the funds they need to aid the communities they support. Furthermore, the $130K is only a fraction of what the nonprofits were owed; indeed, the government paid interest on only 22% (303) of the 1,379 eligible contracts.

In 1991, the State passed the Prompt Contacting Law, which was intended to prevent delays by requiring State agencies to process contracts within 150 to 180 days. Furthermore, a 2007 amendment requires the Comptroller to release an annual report detailing if agencies meet the time frame and if not, offer reasons for delay.[2]  The law provides for interest payments on late contracts to prevent financial hardship.  Unfortunately, the law also allows nonprofits to waive their right to these interest payments, and many human services contracts contain waiver clauses.  Providers believe that they have no leverage when the government presents them with a contract that includes a waiver clause; they are fearful that if they challenge the clause, the government will simply find another group to provide the service. As such, 25 years after the adoption of the Prompt Contracting Law, government continues to process the majority of its nonprofit contracts late, without paying interest in most cases—and nonprofits end up paying the penalty for government’s bad contracting practices. The law thus should be amended to include stringent criteria for when a waiver is permissible.

Through thousands of contracts, the State relies on the nonprofit sector to provide vital services to New Yorkers. In New York State, over 91,000 nonprofits provide a plethora of services including disaster relief, homeless shelters, food pantries, literacy program, and elder care.[3] The breadth of services available means that those who receive them are not just those living below the poverty line but those with differing races, genders, ages and socioeconomic statuses. In addition to providing services, the nonprofit sector also accounts for a significant portion of the New York State workforce; according to an analysis by the Fiscal Policy Institute, there are 250,000 private sector social service workers in New York.[4]

Nonprofits are forced to compensate for the government’s late contracting by taking out loans, furloughing staff or scaling back services. [5] These actions have the deleterious effect of not only compromising the wellbeing of the individuals employed by the sector but also risking the health of the estimated 2.5 million New Yorkers who utilize the provided services .[6] The real world result of the government’s late contracting is, perhaps, shutting down the local child care center, diminishing the amount of vocational training available to veterans or halting the provision of mental health counseling.

The monumental problems facing human services providers are epitomized by the disastrous 2015 closing of Federation Employment and Guidance Service (FEGS), one of the largest human services providers in New York. In the wake of the closing, HSC released an extensive report both with reflections on the current state of the human services sector and recommendations to prevent a similar scenario to FEGS in the future. One of these recommendations was “timely and reliable payments by government.” HSC identified that due to organizations’ lack of cash reserves, uneven payments on performance-based contracts make it extremely difficult to budget and pay personnel and operating expenses, which obviously do not evaporate even when payments are nonexistent.[7] Furthermore, as recommended by Comptroller DiNapoli, prompt contracting interest should be automatically calculated in order to help ensure that the non for profits receive their owed interest.[8]

Government relies on nonprofits, and nonprofits must be able to rely upon the government’s timely and complete payments in order to fulfill their mission. Ultimately, the government must become cognizant of the fact that by paying contracts late and by not providing interest payments they are harming both the nonprofit human services delivery system and the communities that rely upon the services the nonprofits offer.  Accordingly, HSC continues to advocate meaningful contracting and payment reform.

Contributed by Edith Herwitz of the Human Services Council.

[1] http://www.osc.state.ny.us/contracts/reports/2015/pcl_report.pdf

[2] http://www.bizjournals.com/buffalo/news/2015/06/01/nonprofits-continue-to-wait-on-contract-payments.html

[3] http://www.nycon.org/files/7814/2653/2398/Palm_Card_Template_2015.pdf

[4] http://fiscalpolicy.org/wp-content/uploads/2015/12/15andFunding-Report-Dec2015.pdf

[5] https://nonprofitquarterly.org/2016/06/16/making-nonprofit-management-as-hard-as-possible-absurd-delays-in-contracts-plague-ny-groups/

[6] http://www.humanservicescouncil.org/Commission/HSCCommissionReport.pdf

[7] http://www.humanservicescouncil.org/Commission/HSCCommissionReport.pdf

[8] http://www.osc.state.ny.us/contracts/reports/2015/pcl_report.pdf

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