New York CIty Council Member Ben Kallos

Letter to Mayor de Blasio Concerning the Effect of COVID-19 on Nonprofit Businesses

Letter to Mayor de Blasio Concerning the Effect of COVID-19 on Nonprofit Businesses

Dear Mayor de Blasio:

The COVID-19 pandemic is causing Non-profit organizations, specifically human service providers, to operate under heavy financial burdens. Many are providing vital services under serious challenges, while others face mandated closures. One of the biggest challenges being faced, include not being able to meet contracted service requirements. While non-profits face these increasing challenges, they continue to have fiscal obligations such as rent, payroll, and other overhead costs that are primarily paid for by City provided funds. These funds are typically tied to unit of service requirements established in their City contracts.

Many providers are reporting that clients are not able to participate in person for safety reasons and many have started utilizing phone and video conferencing as opposed to in-person meetings. Although, these organizations are being innovative in delivering services, most are not currently equipped to do so and all have incurred increased costs creating cash flow concerns.

Providers are also communicating other issues affecting staff. Some have staff who are unable to work onsite safely due to social distancing guidelines but could work remotely. However for various reasons, including contractual language, providers cannot allow for telecommuting as an option for staff.  Still other providers have workers who cannot practically work from home, such as food servers, who they must send home without a guarantee of being able to pay these workers to stay home. The City must provide relief for these affected providers.

We ask that the administration act swiftly to provide the following measures to ensure that these non-profit providers continue to survive and provide these crucial services now and after this pandemic:

1.The City must suspend all unit of measure requirements in Human Service Provider Contracts impacted by COVID-19.

2. The City must provide reimbursements for any costs associated with increased costs for service delivery associated with the COVID-19 response.

3. The City must provide cash advancements to these non-profits, without the need to secure fidelity bonds or other administrative impediments, allowing them to manage this emergency efficiently continue to meet their obligations.

4. The City must delay the repayments on contract advances until the end of the fiscal year to allow these organizations to meet their current obligations.

5. For providers facing difficulties with staff working remotely due to contractual restrictions, the City must lift any contractual restrictions preventing providers from offering staff to work remotely and further the City must allow providers to pay staff who must stay home and are unable to work remotely.

I appreciate your immediate attention to these concerns and thank you in advance for a swift response.




Ben Kallos

Contracts Chair


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