Project Update: Disaster Preparedness

As the Nation Focuses on the Response to Hurricane Harvey in Texas…

…Preparation for Disasters Progresses in NYC’s Human Services Sector

HSC stands in sympathy with those who are suffering the effects of Hurricane Harvey as well as the multiple human services organizations that are attending to them.

For many New Yorkers, this event stirs up sharp recollections of Hurricane Sandy and serves as a reminder that, regrettably, the City could be victim to another such disaster.

Over the years since Hurricane Sandy, HSC has been partnering with many organizations from the human services and public sector toward ensuring that human services organizations are prepared to play pivotal roles in the event of a disaster. A number of recent developments give us cause for optimism that the sector’s preparedness for disaster is improving, and will continue to gain strength:

Mayoral Taskforce

Following the passage of City legislation introduced by Councilmember Mark Treyger, whose district experienced first-hand the devastating effects of Hurricane Sandy, the Mayoral Administration established the Hurricane Sandy Houses of Worship and Charitable Organizations Recovery Taskforce to review the experiences of community- and faith-based organizations in the response to Hurricane Sandy and recommend strategies designed to lead to improved performances in dealing with future disasters.  Chaired by Allison Sesso, HSC’s Executive Director, the group produced a comprehensive report that sets forth numerous plans – such as enhancing inter-sector coordination and communications, better clarifying roles and responsibilities, and ensuring that participating organizations are properly resourced – that offer the promise of efficient systems and highly constructive partnerships going forward.  Along with many of our colleagues in the human services sector, HSC will be conferring with City government colleagues toward implementing the report’s recommendations.

Publication of HSC’s Human Services Disaster Work “Framework”

With major input from members of HSC’s Disaster Readiness and Resilience Workgroup, comprised of more than 25 leaders from disaster relief and human services organizations throughout NYC, HSC has developed and recently published the NYC Human Services Sector Framework for Serving New Yorkers after Major Disaster, a thorough guide to engaging in disaster work for human services organizations focused on such matters as integrating services, communications systems, the unique dynamics of the NYC landscape, and coordinating with government.  HSC will be disseminating the document in a variety of ways and making use of it as a basis for collaborative planning as well for supporting the efforts of organizations to develop individualized plans.

Upcoming Training – Save The Date 

HSC is partnering with colleagues from NYC Department of Health and Mental Health, NYC Emergency Management, and the Mayor’s Office on Recovery and Resilience to produce a training session designed to help human services leaders better understand changes to their command structure post-disaster and to set the stage for ongoing joint planning between the human service sector and City government. Taking place at HSC on October 26 from 9:00 am – 12:00 pm, the event will involve interactive discussions as well as a facilitated discussion about responding to a potential public health disaster.

Of course, we would all much prefer not to contemplate the specter of disasters, and at HSC we direct the majority of our efforts toward contributing to a healthy and equitable society.  At the same time, we recognize that should a disaster occur, the human services sector, in combination with government, is well positioned to reduce suffering and help affected New Yorkers rapidly recover, and that by preparing in advance we can maximize the effectiveness of our efforts.

Danny RosenthalConsultant to Nonprofits & Writer

 

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NYC COMPTROLLER AFFIRMS HSC’S LONG-HELD POSITION

Overhead Rates in City Government Contracts Are Inadequate and Injurious

Among HSC’s most critical charges is remedying the chronic underfunding by government of human services – and increasing the rates at which City and State agencies reimburse human services providers for overhead, also known as “indirect expenses,” is among our highest priorities.

With our advocacy partners, we have researched this matter, gathered data that makes the case, and sought relief from government – and while there remains a significant distance toward resolving the issue, we are gratified to have found allies and achieved incremental progress.

We applaud Comptroller Stringer for undertaking an independent study of the issue, and for recently releasing a report that arrives at conclusions similar to our own: that, based on a sizable sample, the average overhead reimbursement rate extended by City agencies to human services provided is 8.6%; that this percentage is considerably below the actual overhead rate of most providers; and that, as a result, “non-profits are severely hobbled and many vulnerable New Yorkers are deprived of high-quality, critical services.”

Severely hobbled, indeed. No organization can fulfill its promise without sound management and infrastructure and this is certainly the case with nonprofit human services providers.  For services on the ground to achieve the desired effect, they must be supported by high-caliber financial management, human resources, information technology, facilities management, and research and evaluation functions.

To illustrate briefly, afterschool programs cannot help youth excel and forge paths to college without support in recruiting the dozens of specialists that typically staff these programs and serve as mentors and sources of inspiration for young people.  Senior centers, early childhood education facilities, mental health clinics, and supportive housing programs cannot meet their demanding missions if they are contending with the likes of leaky roofs or faulty HVAC systems. And, given that virtually all workplaces are highly dependent on e-mail, cell phones, and the Internet, no professional in any program can be productive without sophisticated technological support.

And, very simply, 8.6% does not cover these expenses. While overhead rates differ across the human services sector depending on variables like organizational size and content of program portfolios, we estimate that the average overhead rate is 15%. That means that an organization receiving $5 million in City contracts automatically incurs a deficit of about $320,000. This is a difficult and, for many human services organizations, an untenable way to operate. But because these organizations are deeply dedicated to service, they continue to accept these terms.  This is an unfair and, ultimately, a damaging practice, that needs to be rectified.

With the adoption of the City’s Fiscal Year 2018 budget last week, Mayor de Blasio and the City Council took steps toward accomplishing just that.  They committed $88 million over the next five years to increase overhead rates in City contracts to 10%, and included $17.6 million of that amount in next year’s budget.

Also very significant is that the budget included $22.7 million designated for a Model Budget initiative designed to increase budgets for selected human services programs to reflect the true and full costs of service provision. This initiative can begin to unravel chronic underfunding issues by examining the real costs of programs, address the salary disparities between human services staff and staff from government with similar responsibilities and qualifications, and understand the true indirect costs associated with running programs and contracting with government. This is not an easy undertaking, but imperative to moving the sector to financial stability.  Programs involved in this effort are services for families dealing with instability, senior centers, services for runaway and homeless youth, and adult protective services, and plans are to extend this practice to additional programs in the upcoming two Fiscal Years.

These investments mean an improvement for human services organizations, and the acknowledgment of the issue by City government leaders is reason for optimism that further gains lie ahead.

HSC will continue to keep this issue atop our agenda to ensure that human services organizations are positioned to help New Yorkers surmount barriers and realize aspirations, and to contribute to a truly equitable City.

Danny Rosenthal, Consultant to Nonprofits & Writer

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A deeper look at “sanctuaries”: next steps to protecting the undocumented population

As the federal administration continues to threaten funding cuts for self-proclaimed sanctuary cities, mayors from around the nation have spoken out to assure their commitment to this policy and their communities has not changed. For example, Mayor de Blasio has successfully taken steps to block Immigration and Custom Enforcement (ICE) agents from pursuing a federally mandated search-and-deport enforcement strategy by banning agents from entering public schools without warrants and emphasizing community policing.

But what else can be done to protect undocumented immigrants and their families? As more City officials position themselves against the Trump administration, ready to fight all the way to court, there is also the looming federal budget cuts that further threaten immigrants and the nonprofits they rely on for services.

For the human services sector, these potential budget cuts compound already realized issues of working in communities – like undocumented immigrants – where federal policies already have adverse impacts. Nonprofits are essential in providing legal services, along with support services like mental health, food, shelter, and case management. The City Council has recognized that human services are integral to sanctuary policy, citing that legal services for immigrant families as just one area of services that need to be sustained in order to follow sanctuary claims. The Council’s Finance Chair, Councilmember Julissa Ferreras-Copeland, connected sanctuary policy to human services by stating, as a sanctuary city with a plan, now is the time to right-size human services contracts,” pointing to the fact that human services organizations are not in a healthy position to continue their supportive services effectively without a financial adjustment to the sector.

Human services must face the reality that more and more people may have to rely on their services in this climate, while balancing potential cutbacks in their budget to continue to provide services. Chronically underpaid contracts, however, continue to drain the resources of these organizations and their ability to serve New Yorkers.

Regardless of their documented status, human services not only provide legal support, but valuable opportunities for professional and familial support to immigrants, ensuring their ability to contribute back to their communities. From job training programs, to adult literacy classes and childcare centers, human services are the frontline providers of access and opportunity. Doing this work responsibly requires careful planning and adequate financial resources. For the Mayor, who promises to maintain New York City’s status as a place of safety and opportunity for immigrant populations, neglecting the human services sectors’ fiscal crisis during this time is problematic.

Undoubtedly the state and local government are overburdened in trying to protect all their constituents from imminent federal cutbacks. The Mayor’s decision to take a stand against federal criminalization of undocumented immigrants by designating NYC as a sanctuary city is a huge step, but this cannot be done effectively without a financially strong human services sector providing sanctuary.

As established by the Council, a direct investment in the human services sector is a direct investment in sanctuary policy. HSC’s “Sustain Our Sanctuary” campaign is asking for just that; a 12% across-the-board increase on human services contracts. Given that close to 1 in 5 New York human services providers are insolvent, delayed commitments are detrimental to New York’s stated sanctuary policy. By putting additional resources to shore up New York’s human services sector now, Mayor de Blasio will reinforce commitment to maintaining New York’s sanctuary legacy, allowing organizations to expand their services to meet the increasing demand from all New Yorkers.

Andrea Parejo, Government & External Relations Intern 

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HSC STRENUOUSLY ENDORSES NYC AS A SANCTUARY CITY…

And Will Vociferously Resist Federal Funding Cuts to Human Services

Among Donald Trump’s first acts as US President was to direct NYC and other local governments to pursue the deportation of undocumented immigrants with records of minor criminal offenses — and he signed an Executive Order decreeing that cities that do not comply, and that declare themselves Sanctuary Cities, will be stripped of federal funding.

Mayor Bill de Blasio, City Council Speaker Melissa Mark-Viverito, and NYPD Commissioner James O’Neill responded swiftly and forcefully — asserting that NYC will indeed be a Sanctuary City, that undocumented immigrants will not be harassed and that they will continue to be treated as full citizens.

HSC applauds these City government leaders for rebuffing Trump’s inhumane policy directive and blustery threat, and for standing firmly alongside our undocumented New Yorkers. Supporting immigrants and refugees has historically been one of the priorities of New York’s human services sector, and many organizations within our membership advocate on their behalf and offer such services as English-for-Speakers of other languages, employment assistance, early childhood education, and afterschool programs so they can contribute their diverse gifts and talents to the benefit of all our communities.

The details regarding Trump’s Executive Order that would deprive Sanctuary Cities of federal funding are unclear, and we are grateful that the Supreme Court has ruled that federal funds unrelated to immigration enforcement activities cannot be denied to localities refusing to adhere to Trump’s plan. We also appreciate Mayor de Blasio’s pledge to legally contest any effort to strip federal funds from NYC.

However, we must be vigilant about this matter. Many of the human services contributing to our vibrant City are financially supported by federal funds in large amounts. As examples, these include: Head Start and Early Head Start, which provide essential early childhood education to children from low-income families and enable their families to work and attend school; Child Welfare services, which help challenged families remain together and support children in the foster care system; and the Workforce Investment and Opportunity Act (WIOA) programs, which help un- and under-employed adults and youth gain access to decent-paying and meaningful jobs. The New York City Housing Authority (NYCHA), which provides affordable housing and access to a variety of human services to over half a million New Yorkers of all ages, is also largely funded by the federal government.

Reductions in funding to these and numerous other programs would have devastating effects to New York while also de-stabilizing human services organizations and diminishing quality-of-life for all New Yorkers.

As an organization whose mission is to strengthen New York’s nonprofit human services sector, ensuring all New Yorkers, across diverse neighborhoods, cultures, and generations reach their full potential, we will not permit our undocumented neighbors to be harmed out of fear for the loss of funding.

Instead, we will partner with leaders from government and from across the human services sector in a massive resistance to simultaneously secure the safety of undocumented immigrants and sustain the City’s human services network – while demonstrating that we will never — ever — relinquish our commitment to compassion and justice!

Danny Rosenthal, Consultant to Nonprofits & Writer

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Call to Action: Human Services Leaders to State Government

For Services to Achieve the Desired Effect,

Facilities Must be Tended

The facilities in which New Yorkers receive life-sustaining human services are the subjects of heavy wear – and too many suffer from deterioration.

These spaces are senior centers, early childhood education classrooms, youth centers, health venues, mental health offices, and supportive housing – and, frequently, they accommodate multiple functions – and are utilized constantly by all, providing myriad benefits to New Yorkers at all stages of life.

The majority of funds supporting the services provided in these locations are sourced from government, yet contracts between government and human services organizations to operate programs rarely include funds allowing for the improvement of facilities.

Providing the services that support communities responsibly requires careful planning and adequate financial resources. In the past, State legislators recognized the importance of properly maintaining these facilities and allocated funds in sizable amounts for this purpose ensuring that these programs and the communities that benefit from them were set up for success. However, this practice was discontinued nearly a decade ago – and, as a result, conditions at the facilities of many vital programs have increasingly worsened.

Budgeting is a matter of asserting values and making choices. Aged and energy-inefficient systems cause discomfort and disruption and tarnished settings diminish the morale of participants and staff – conveying to them the discouraging message that they are unvalued. When these facilities are in disrepair and unappealing, the quality of programs is threatened.

To remedy the situation, HSC and our partners advocated strenuously for State capital funding for human services to be re-instated, and two years ago Governor Cuomo accommodated the request and designated $50 million for a NYS Nonprofit Infrastructure Capital Investment Program, and last year the State legislature renewed the program. And, recently, following a competitive solicitation combining the funds allocated over both years, the funds were allocated to dozens of human services organizations, including 29 HSC members.

At Sunnyside Community Services, an outdated space dedicated to a variety of programs for seniors – including home care, case management, Social Adult Day Care – will be renovated to allow for optimal safety, repair of leaks, private meetings regarding sensitive matters, upgraded aesthetics, and a more efficient use of space.

At Forestdale, a Queens-based family services organization, three outmoded 75 year-old buildings will be converted into state-of-the-art centers focused on early childhood education, adult education, career and family support, greatly adding to the organization’s efforts to help young people exiting the foster care system, new parents balancing competing demands, and families healing from past distresses.

These and many other upgrades supported by the Nonprofit Infrastructure Capital Investment Program will undoubtedly translate to stronger outcomes for participants in programs, but a great many worthy proposals to the State program were declined, and the funds allocated only begin to address unmet capital needs for many organizations receiving the grants.

As policymakers develop the New York State FY18 public budget, slated to be adopted by April 1, HSC has been advocating in coalition with our partners to double funding for the Nonprofit Infrastructure Capital Investment Program. But, in a move that has confounded human services leaders, the Governor did not include funds for the program in his budgetary proposal, and neither the Senate nor Assembly has added the funds.

A failure to invest in the facilities that house these services is ironic and short-sighted. Inadequate facilities will undermine the efforts of human services organizations to help New Yorkers surmount barriers, thereby making it more difficult to achieve the progress we all desire, and likely leading to additional expenses.

It is imperative that human services leaders continue to loudly assert the necessity of renewing and increasing funds for capital projects.

Please take part in this critical advocacy effort. (Click for instructions)

Danny Rosenthal, Consultant to Nonprofits & Writer

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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.

new-hsc-structure

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

Closing

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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$15 MINIMUM WAGE

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.

[1] http://cityandstateny.com/articles/politics/new-york-state-articles/exclusive-for-the-first-time,-mwbe-contracting-drops-under-cuomo.html#.WIYmiNIrLcs

[2] https://cdn.esd.ny.gov/MWBE/Data/01282015_OFFICIAL_COMPILATION_OF_MWBE_REGS.pdf

[3] http://www.nydailynews.com/opinion/n-y-s-unfair-new-policy-underpays-nonprofits-services-provide-article-1.944833

Andrea Parejo, Government and External Relations Intern

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State Wage Order Raises Minimum Salary Levels for Overtime Exemption

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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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