Contracts Chair Kallos has led the Fight to Restore Funding Cuts to Nonprofits by Mayor de Blasio Since the Pandemic.
New York, NY - After over a year of fighting for New York City’s nonprofits, today Council Member Kalllos joined the administration in announcing that deep cuts to the nonprofit sector will be restored. As chair of the Contracts Committee Council Member Kallos has been at the helm of the fight to support human services providers in the City of New York as they faced draconian cuts throughout all of 2020.
"Nonprofits are leading the recovery by supporting low-income black and brown New Yorkers impacted most by the pandemic and our city is finally doing the right thing by restoring cuts to operations that will help keep these vital services going," said Contracts Chair Ben Kallos who has been leading the fight for these funds. "Thank you to Speaker Corey Johnson and Mayor Bill de Blasio for their leadership and investment in our nonprofit community."
- August 22, 2020, during the height of the Covid-19 pandemic Council Member Kallos authored a letter to administration demanding restoration of indirect cuts.
- September 15, 2020, Contracts Chair Kallos joined the Human Services Council, Borough President Gale Brewer, Council Members, and providers to lead a rally demanding a restoration of these funds.
- November 24, 2020, Council Member Kallos held a hearing giving nonprofits the ability to testify on the urgent need and restorations of funding.
After promising to fully fund indirect costs with $54 million in November 22, 2019, Mayor
Bill de Blasio announced in July 2020 that he would be cutting the city’s reimbursement for these costs both retroactively and moving forward. Prior to this, Mayor de Blasio’s Executive Plan in April 2020 cut indirect funding by nearly 40% to $34 million under the guise of a “right-sizing” assurance for providers that reimbursements from that fiscal year would be completed. Human service providers were already in trouble having already spent funds relying on this reimbursement which was reduced to 10% of contract value or 60% of actual costs and must now continue through this pandemic without the city paying for indirect costs as promised.
Contracts Committee Chair Kallos along with more than 20 Council Members demanded a restoration of these funds by letter in August 2020. Last September, Contracts Chair Kallos joined the Human Services Council, Borough President Gale Brewer, Council Members, and providers to lead a rally demanding a restoration of these funds.
On November 25th, the day before Thanksgiving, the Contracts Committee held a hearing seeking to hear from providers on the importance of the city paying for indirect costs and the impact on services for providers and the people they serve. Several Human Service Providers and elected officials testified at the hearing including:
- Manhattan Borough President Gale A. Brewer
- Council Member Brad Lander
- Council Member Helen Rosenthal
- Ariel Zwang, CEO of Safe Horizon
- Wayne Ho, President & CEO of the Chinese-American Planning Council (CPC)
- Rodrigo Sanchez-Camus, Esq., Director of Legal, Organizing, & Advocacy Services at NMIC
- JoAnne Page, President & CEO of the Fortune Society
- William Scarborough, Account Manager in Employment Services at The Fortune Society
- Frederick Shack, Chief Executive Officer of Urban Pathways
- Janelle Farris, Executive Director & President of Brooklyn Community Services
Underfunding was an issue prior to the pandemic, more than half of NYC human services nonprofits could not keep even two months of cash on hand, due to underfunded government contracts, a problem that dates back years. This funding crisis was the main driver behind 2019's groundbreaking commitment to strengthening health and human services infrastructure through increased indirect funding. These retroactive cuts undermine the City’s progress and put providers at significant financial risk when the need for their services is skyrocketing.
The Indirect Cost Rate (ICR) Funding Initiative launched by the City in 2019 and is a result of the City Council pushing the Mayor’ s office and working with nonprofit sector leaders through the Nonprofit Resiliency Committee.
The announcement today of $120 million over two years brings the total investment for ICR to $94 M per year.