April 2021 Report: New York’s Safety Net In Jeopardy

This report from the Center for an Urban Future examines the extraordinary financial struggles nonprofits have faced since the start of the pandemic. Good Shepherd Services along with other human services nonprofits detail their fight to keep NYC communities fully supported during the crisis.

 

NEW YORK’S SAFETY NET IN JEOPARDY

Since the start of the pandemic, NYC’s human services nonprofits have stepped up to face the coronavirus crisis and meet new levels of demand for frontline services. But an alarming number of these nonprofits now are on the precipice of financial catastrophe—and their mounting fiscal problems have been compounded by city and state government.

by Sarah Amandolare

 

New York’s human services nonprofit organizations have been indispensable to the city’s response to the COVID-19 crisis, serving as the safety net of last resort for hundreds of thousands of struggling New Yorkers. In communities across the city, these nonprofits have stepped up to meet an unprecedented increase in demand for lifesaving services, providing food and cash assistance to immigrant families that lost all sources of income but didn’t qualify for federal relief, delivering meals and medicine to homebound older adults, providing tablets and technology assistance to low-income New Yorkers on the wrong side of the digital divide, and offering mental health counseling to teens struggling with social isolation.

Demand for emergency food services increased by nearly 4,000 percent at one Brooklyn nonprofit and by 900 percent at another organization in Northern Manhattan. At another organization, requests for mental health counseling spiked by 350 percent. Meanwhile, countless nonprofits, including many small community organizations that entered the pandemic with shoestring budgets, added entirely new programs and services to meet the massive uptick in need.

Yet despite their heroic efforts, an alarming number of the nonprofits that provide safety net services in New York are on the precipice of financial catastrophe—and their mounting fiscal problems have been compounded by city and state government.

As this report details, most of the two dozen human services nonprofits that we interviewed for this report told us they were experiencing a yearly budget deficit between 15 and 50 percent. The YMCA of Greater New York has lost more than $100 million in revenue, half of its annual operating budget. Citymeals on Wheels spent $3.5 million over budget last fiscal year and are budgeting a multimillion-dollar deficit in FY21. The New York Foundling lost $2.5 million, a 45 percent greater shortfall than normal. One quarter of the organizations we spoke with say that they spent more than $1 million in unanticipated costs during the pandemic, much of which was not reimbursed.

Due to these financial challenges, numerous organizations have already had to lay off large numbers of staff, even as they struggle to ramp up services and meet growing demand. For example, the Chinese-American Planning Council had to lay off or furlough about 200 staff out of a workforce of 700. Good Shepherd Services laid off 311 staff, or 20 percent of their total workforce, before later rehiring about 100 of them. Graham Windham laid off roughly 50 employees.

Read the full report here.