NYC Council Presses for Faster Payments to Homeless Assistance Nonprofits Amid Ongoing Delays

City officials are under pressure to improve how quickly nonprofit providers receive payments for their services, particularly in the realm of homelessness assistance. During a recent New York City Council hearing, members discussed ongoing challenges and introduced strategies intended to resolve persistent payment delays that nonprofits face.

Testimony revealed that the delays hinder the ability of these organizations to fulfill their commitments to the community. Nonprofits often struggle with cash flow issues because late payments can leave them unable to cover operational costs, including payroll and vendor payments. Some organizations report being owed millions, with many providers forced to borrow funds to remain operational (Source: https://youtu.be/Oo8ZET9rUQ4&t=2113).

The Department of Homeless Services (DHS) acknowledged these challenges and noted they had disbursed significant funds recently—$288 million since November—yet the backlog of outstanding payments remains a major concern. The city’s adoption of a new passport system for invoice processing aims to enhance efficiency in the long run, though this transition has encountered difficulties, especially with a 50% increase in contracts compared to previous years (Source: https://youtu.be/Oo8ZET9rUQ4&t=2072).

During the meeting, council members highlighted that payment terms vary by the type of provider. Family service providers often receive upfront payments at the start of each month, while adult and street service providers rely on invoicing after services are rendered (Source: https://youtu.be/Oo8ZET9rUQ4&t=2005). Additionally, guidance for partial payments aims to address issues by allowing funding for uncontested portions of invoices to flow more smoothly (Source: https://youtu.be/Oo8ZET9rUQ4&t=2072).

Another significant point raised is the high interest costs nonprofits incur while waiting for funds. Providers are urged to borrow money to cover costs, resulting in substantial financial burdens not easily manageable for organizations already operating on tight budgets. The council noted that to avoid future crises, the administration must streamline the contracting and payment process and consider paying interest on late payments through proposed legislation (Source: https://youtu.be/Oo8ZET9rUQ4&t=1891).

City representatives committed to supporting nonprofits via technical assistance in navigating the complex contracting processes. They expressed determination to work collaboratively with service providers to ensure timely payments and better support the essential services they provide (Source: https://youtu.be/Oo8ZET9rUQ4&t=1968).

As the council continues to advocate for reforms, the necessity of addressing these systemic payment issues remains urgent. Timely financial support is essential to ensure nonprofit organizations can maintain their operations and continue serving New Yorkers in need.