With the largest population in the U.S., New York City has a variety of demands for essential social services ranging from after school programs and housing to medical care. Nonprofit human services providers meet this demand and provide critical interventions to millions of New Yorkers each year. They contract with government and leverage private dollars to build programs to meet community needs. The cost of providing these services is constantly increasing. They require the hard work, compassion, and dedication of an entire industry to implement them. For all of that passion and drive, the organizations providing programs throughout New York are impeded by a lack of funding.
More specifically, we must increase the funding for Other than Personal Services (OTPS) in order to help organizations provide these essential services. OTPS is a crucial part of nonprofit budgets and covers crucial things like rent, insurance, technology, and all other costs aside from salaries. These costs are imperative for any organization, nonprofit or otherwise, to function. A lack of funding for OTPS affects nonprofit programs and impedes them from providing the best services possible.
For example, let’s look at a nonprofit providing programs and services to children. Aside from the cost of staff, the organization has the cost of the facility where these services are located; the cost of health insurance for the staff providing these services; and the cost of liability insurance. Every year, more than 85% of the organization’s current leased properties sees an annual increase of 2% or greater. Their health insurance increases annually despite using brokers, going to market, and making plan changes/adjustments. Their liability insurance doubled over the course of five year, rising from $700,000 in FY10 to $1.4M in FY15. Additionally, government contracts have administrative requirements, like reporting and licensing, that cost money but are often not paid for as part of the contract. Reporting to the State Justice Center is an example of an important accountability requirement, but the costs associated with reporting and compliance continue to rise. When factoring in salaries for additional hours, paperwork, follow-up, and interviews, these processes cost at least $35,000 annually. As a result, the organization has had to postpone larger maintenance projects at sites.
As 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