The human services sector in New York is dependent on a wide range of private, nonprofit organizations that provide services under contracts with the City. With costs rising and reimbursements failing to keep pace, many of these organizations are now starving financially. If they haven’t already, many agencies may be forced to decide between paying the rent or the utility bill. Unfortunately, it’s the city’s most vulnerable children and families who will end up paying the price.
The organization I lead, The New York Foundling, is very fortunate. We are one of the largest and oldest agencies and are lucky enough to have an endowment that, although it greatly restricts how and when these monies can be used, has enabled us to make up some of these gaps; most others are not so positioned. Agency size and endowment aside, the current financial model is not sustainable for any in the sector. Consider our own experience over just the past four years. As contract revenue has grown by 8%:
- The cost of workers’ compensation has increased by 66%;
- The cost of rent and utilities has increased by 25%;
- The cost of general and auto insurance has increased by 37%;
- The cost of phones and internet service has increased by 20%.
During this time, we have been prudent stewards of taxpayers’ money and we have maintained our commitment to serving children and families in need. While our programs operate at a loss, we have managed to keep those losses at a relatively stable level and to make ends meet by using funds from other sources, including the more efficient use of our real estate.
While The Foundling may be able to ride out a financial storm or two, all New Yorkers should be concerned about the fallout among smaller or less financially fortunate agencies around the city, of which there are many. Like us, these agencies have close ties to their communities, they work with their families and other community based organizations. They play a vital and irreplaceable role in helping children and families and in keeping their communities strong.
Providing these services requires agency infrastructure and that requires money. We need space for the employees who work with our families and for the facilities in which we provide care and services. That requires us to lease or purchase space in various communities. We need to build technology systems – and continue to update them – to maintain medical and other types of case records. That requires the purchase of computers and software and the hiring of skilled IT staff. All these hard costs, and many others, continue to rise without corresponding increases in funding for them.
If funds aren’t provided to fill these gaps, organizations will fail. It will happen little by little, and then all of a sudden. Agencies like The Foundling will stand a better chance over the short-term, but no one – large or small, endowment or not – will be immune.
We and our colleagues at other organizations are committed to this work. It is challenging, extremely gratifying, but an often heart-breaking endeavor that enables us to keep children safe and keep families together. I know that every agency charged with this work does everything possible to perform at the highest standard possible.
Adequate funding for staff and infrastructure is what we all live on. We need it to survive. At a time of uncertainty in our country and the world at large, New York City has remained a beacon of hope for everyone who serves those in need. Mayor DeBlasio and his administration didn’t cause this problem – indeed, there has been no greater champion of vulnerable New Yorkers throughout their career than the Mayor. But with agency operations and infrastructure funding having been virtually non-existent for many years, some organizations are reaching a breaking point. All the progress we have made as a sector could come apart. We know the Mayor’s heart and we know he will be sympathetic to our challenges. The human services sector needs his help now more than ever.