City Money: Why Make Non-profits Responsible?

According to the New York Times article “Nonprofit Groups Hopeful but Wary as City Aims to Cut Red Tape,” Mayor Bloomberg’s administration is about to overhaul its system for distributing city money.

Having a centralized office for efficiently distributing money to non-profits is the goal. Currently, non-profits are promised funding for various projects through city council members who then tell the relevant city department to fund the programs. However,  each department has different rules and different deadlines for proposals and reports. I’ve talked to heads of a number of organizations who depend on city funds for soup kitchens and pantries, and they all throw up their hands. The money is always late and the paperwork is arcane.

So anything that simplifies the process is good.

However, I don’t think a simplified process for distributing money is what we New Yorkers need. I think our attention is being misdirected.

Why Can’t the City Oversee Itself?

I went to the morning session of a city-run program called “Capacity Building Training for City Council Community Partners” on April 9, 2010. Here is a list of the departments and organizations who sent speakers:

  • Mayor’s Office of Contract Services’ general counsel
  • NYC Department of Investigation
  • NYC Conflict of Interests Board
  • NYC Not-for-Profit Vendor Fraud Unit
  • Lawyers Alliance of New York, which you can call on for free if you think you might be getting into trouble

Hmm, all about fraud and conflicts of interest. Okay, fine, there have been problems with non-profits. But the most telling statement I heard that morning was this:

Since the city can no longer afford to run the soup kitchens, pantries, AIDS health programs, etc.,  and since the non-profits have had to pick up the slack, and the city is sending money to the non-profits to help run these programs the city can no longer afford, and the city doesn’t have the staff they need to make sure money isn’t being wasted, therefore the city is training the non-profits receiving the monies how to avoid fraud and what to do if the city sends an auditor to look at the books.

With all the city is spending on non-profit training, oversight, and accounting, plus the bureaucracy to support all that, wouldn’t it make more sense for the city to run homeless, food pantry, AIDS health programs, etc., themselves? Isn’t that the idea behind taxes being given to municipal governments–that the city provides services and a safety net? Who’s bad idea was it to turn over all this responsibility to non-profits?

Was it Reagan or Clinton who decided to stop funding food banks, low-income housing, and other social support programs? At the time, religious and social organizations started picking up the slack because the lives of people they cared about were being destroyed. The stepping-in was supposed to be temporary, however—no one expected church-based organizations to be able to run soup kitchens for years on end with volunteers. (But they did, and do. The Holy Apostles soup kitchen, for example, has served 6.5 million meals since 1982 with only 12 staff members and 40 to 50 volunteers a day.)

Holy Apostles Soup Kitchen
Holy Apostles Soup Kitchen

Why Should Volunteers Take Up the Slack?

Also at the training session was a representative of the NYC Service department, which manages the city’s volunteer program. It’s a lovely idea: If you have time, sign up and the city will help put you in touch with a non-profit that needs you.

But something the representative said made my antennae flick. This is a paraphrase: “The mayor knew we were going to be heading into a bad time, and knew that the non-profits were going to need help. That’s why we started this volunteer program.”

Right, heading into a bad time, with lots of people out of work and city and state tax income dropping…. Hey, I’ve got it! Let’s put all those unemployed people to work as volunteers! Then if we cut back even more on city funding, it won’t be so bad because the non-profits have all this free labor!

To Review…

A recent survey found that 80 percent of Americans don’t trust the federal government to solve the country’s problems. I imagine that many New Yorkers feel the same way about our state and city governments.

Is this mistrust part of the reason why the city, state, and federal government are redistributing tax monies to non-profits to take care of homelessness, theater, AIDS support, museums, and so on, rather than taking responsibility for these programs themselves? If so, wouldn’t it make more sense to figure out why we mistrust our governments so much and solve that problem?


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