State halts contract funding to nonprofits

Woman reaches into food.

Woman reaches into food. Shutterstock

New York state’s ongoing budget crisis has put thousands of nonprofits in limbo as state agencies have delayed payments and stopped approving new contracts, the Times Union reports. 

The Cuomo administration has put the funding in jeopardy as it waits for clearer guidance on whether federal relief will arrive to help it contend with a $13.3 billion shortfall. 

This means organizations providing often-essential services – helping homeless New Yorkers, foster youth and others in need – may not receive full funding and don’t know whether their contracts will be renewed. And charities that have received aid through the Paycheck Protection Program may not be able to get state funding for the period of time they were supported by federal dollars, Doug Sauer, CEO of New York Council of Nonprofits, told the Times Union. 

Even in normal times, nonprofits with state contracts have griped about the process. Half of all state contracts with nonprofits in 2019 were approved late, according to a report from the state comptroller’s office, putting organizations in a financial pinch.

But the COVID-19 pandemic only worsened fears that nonprofits wouldn’t receive sufficient funding in a timely manner. State agencies early on gave varying guidance and flexibility with funding to allow nonprofits to use the money where it would most be needed.

State agencies eventually were allowed to amend contractual requirements for human services nonprofits – provided they produced documentation proving the coronavirus’s impact on their work. But now many New York nonprofits are staring down an uncertain future both for the work they do and the people who rely on them.