BUFFALO, N.Y. — Nonprofit leaders and advocates in Buffalo urged Gov. Kathy Hochul on Oct. 20 to sign two bills passed by the New York State Legislature that they say would reduce chronic payment delays and provide working capital for organizations delivering government-funded services.
Organized by the Coalition to Fix Government Contracting, the event at Housing Opportunities Made Equal brought together six nonprofit and community leaders to discuss how delayed reimbursements and administrative hurdles force nonprofits to borrow money, deplete reserves and divert resources from clients.
Speakers included Andrea Ó Súilleabháin, executive director of Partnership for the Public Good; Katie Pieri, director of the Nonprofit Support Group; Matthew Parham, director of litigation and advocacy at the Western New York Law Center; Pastor James Giles, president and CEO of Back to Basics; Karen Nicolson, executive director of The Center for Elder Law and Justice, representing the New York Legal Services Coalition; and Megan Allen, CEO of the New York Council of Nonprofits.
The coalition said 873 organizations have endorsed a statewide sign-on letter supporting the legislation. Coalition research cited at the event, titled “Nonprofits in Peril,” found that one in three nonprofits with state contracts were owed money for services already provided, with at least $650 million outstanding. Nearly two-thirds of those organizations expressed concern about their ability to fund basic operations, according to the research.
Organizers said some providers have waited more than a year for reimbursement and that routine administrative discrepancies can delay payments for months.
“When the state pays late, it’s not some abstract budget line. It’s payroll. It’s a case manager in Lockport or a home care aide in Olean wondering if their paycheck will clear. And last year, 76% of state contracts with nonprofits were processed late … Meanwhile, organizations’ bills are piling up, and our communities are paying the price,” Pieri said.
Giles said community groups are essential partners in addressing local problems.
“Community-based organizations are at the heart of service to a community. The problems that we have in our communities are massive and the government itself cannot handle them without partnership with community-based organizations,” he said.
State Sen. Shelley Mayer, a sponsor of the bills, said the measures are intended to address persistent delays and improve accountability.
“New York’s nonprofits do tireless and important work throughout the state, and we depend on these organizations to deliver essential support to thousands of our residents. This legislation is critical to tackle the persistent delays in state payments to nonprofits and establish greater accountability to ensure non-profits are paid on time for the services they provide and the staff that they employ,” Mayer said.
Assemblymember Amy Paulin, the other sponsor, said the bills were revised to address the governor’s concerns.
“When the state contracts with a nonprofit to deliver care, it should pay on time,” Paulin said.
The two bills, which passed both houses in June, are S.9761/A.10741 and S.9855A/A.11179. According to coalition materials, S.9761/A.10741 would establish clearer invoicing and payment schedules, improve contracting transparency and provide nonprofits with information about the state’s short-term revolving loan fund.
S.9855A/A.11179 would require state agencies to provide a 25% advance payment within 30 days after a contract is fully executed, giving nonprofits working capital to begin delivering services. Coalition leaders said the bills were revised to require advance payments only after contracts are executed, providers are vetted and funds are appropriated, while accounting for potential federal funding restrictions.
Organizers said the nonprofit sector employs about 1.3 million people in New York, representing roughly 17% of the state’s private workforce. Coalition leaders said late payments threaten the financial stability of employers that provide health care, retirement benefits and other worker protections.
