NYC to fully fund initiative covering nonprofit overhead costs after cuts

Ed Reed / Mayoral Photography Office

New York City will commit $120 million to its initiative covering overhead costs for nonprofits, Mayor Bill de Blasio announced on Friday. The news comes after city officials made cuts last year that left charities with less financial support than originally anticipated.

The city’s investment will fund the Indirect Cost Rate initiative for the next two years. The funding has also been baselined, so $94 million will be committed to the effort for the future. Last year, $20 million was slashed from the effort, which was launched in 2019 to help nonprofits cover administrative costs and other expenses not directly related to their contracts. 

As a result, nonprofits were reimbursed for only 60% of their funding requests for the last fiscal year. They were expected to receive even less this year because more organizations sought funding through the initiative. 

“The baseline means that they’re not gonna have to worry about this happening again,” said City Council Member Ben Kallos, chair of the committee on contracts. 

The announcement was widely celebrated by nonprofits that have been pushing for the funds to be restored. Maria Lizardo, executive director of the Northern Manhattan Improvement Corporation, said her organization is expected to receive more than $130,000 after the announcement, which will be used to provide employees with laptops and support staffing for its food pantry program. 

“We move staff around to try to cover it, which means that we’re shortchanging other parts of the agency,” she said. “Now, we’ll have dedicated staff that can be allocated to manage the food pantry.”

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