But it could work even better if both conservatives and progressives stopped creating unnecessary burdens.
In a city as complex as New York, who really runs this town? Teachers, police, firefighters and sanitation workers are all government employees who work directly for the City, providing the essential services that make New York run. In the social services arena, the City has taken a different approach, relying on a network of nonprofit organizations to provide services in homeless shelters, food pantries, after-school programs, senior centers, legal assistance and other supports. City agencies drive resources and policy by contracting with nonprofits, who then hire staff to provide the services directly in the communities they serve.
Benefits of the ‘permanent government’
How does the nonprofit contracting model stack up? It is not without its challenges, but on balance, it generates substantial benefits. Contracting with local nonprofits can help increase the variety and range of services in a field such as homeless services. People are complicated: Not everyone needs the same thing. The capacity to be nimble and experiment are important features in a field that is still figuring out the best way to solve problems. In New York, our problems are as large and diverse as the city itself, and the ability to be responsive to the local community is better suited to a network of nonprofits than a centralized, government-driven response. For problems as complex as food insecurity or homelessness, competency with specific subpopulations is the key to success, and that is much better handled by a variety of different groups rather than by a single, large-scale City agency.
Local community organizations are also critical in times of disaster, whether it’s the Gambian Youth Organization supporting their community in the aftermath of the Bronx fire, or Chhaya helping people living in basement apartments during Hurricane Ida. Language and cultural competency, knowledge of communities on the ground and experience with specific subpopulations are all best handled by local community organizations rather than a top-down, government-centric approach.
A web of nonprofits working in the social services field also creates consistency during times of political upheaval. City Council members and mayors have term limits; they have at most an eight-year sprint to make the changes they want to see in the city. But the nonprofits who provide services on the ground create additional consistency in terms of operations and policymaking that outlast the vagaries of the New York City political cycle. The term “permanent government” is alternately used with pride or derision, but it does provide policy expertise, historical knowledge and a long view that can provide a base of stability during turbulent times and political transitions.
One common criticism of nonprofits is a lack of accountability, but I would argue there is actually a tighter web of accountability for nonprofits than for government: Nonprofit organizations are accountable to their boards, to the City, to funders and to the communities they serve. They don’t serve a specific mayor or a specific agency commissioner, which enables them to have a broader view that outlasts the current political moment.
The nonprofit model of social service provision has many benefits. Nonprofits can provide diversity, experimentation and nimbleness. They can be responsive to local communities and subpopulations. And they offer a consistency of leadership that can provide an important counterbalance against political winds.
Where the nonprofit contracting model goes wrong
Even given those significant benefits, major challenges remain.
Nonprofits can have a tendency to fall in love with the sound of their own voice and not take seriously enough the need to be accountable to people with lived experiences. To be truly responsive to the communities they serve, nonprofit leadership must respect the expertise of people who are directly impacted by their programs and find ways to incorporate this insight into their day-to-day operations. For example, a group of “impacted advocates” showed the way when they gathered at City Hall to help write Housing Our Neighbors: A Blueprint for Housing and Homelessness. When I was Chief Housing Officer at City Hall, I convened a couple dozen homeless and formerly homeless New Yorkers to help us write our plan to address housing and homelessness. While we also consulted leaders of nonprofits who ran homeless programs, it was the impacted advocates themselves who proposed the most specific and innovative new ideas. In a similar vein, some nonprofits have added a person with lived experience to their board of directors, or ensured such input in other meaningful ways.
The nonprofit contracting model also makes the City and its agencies less accountable to the frontline staff that have boots on the ground each day solving the city’s thorniest problems. If the City missed payroll for its workers by weeks or months, it would be front-page news, but the contracting model creates a series of extra steps around payments, and the City is often exceedingly late in providing payments, essentially solving its own cash flow problems on the backs of nonprofit providers. As a result, nonprofits spend too much time and energy trying to stay alive financially and too little time devising strategic and innovative solutions to New York City’s most intractable social problems.
The key to solving this problem is transparency, flexibility and hands-on management. New Yorkers have the right to expect that the social service organizations that run our homeless shelters, food pantries and senior centers will get paid on time. Hundreds of thousands of social service professionals should not feel the weight of financial uncertainty when they take on a job that is often underpaid and underappreciated. The City should cover interest costs when payments to nonprofit vendors are late. They should implement partial payments when some costs are straightforward and others merit more scrutiny. And all contracts should be registered within 30 days of the start date. Over the years, the City has made sporadic efforts to solve these problems, but they often sputter out. The public deserves regular and transparent reporting on nonprofit contracting and the efforts to speed up payments.
The impediments to good nonprofit service delivery
The administrative burdens, or “time tax,” of our social safety net programs are another major barrier to the effectiveness of nonprofit social service agencies. The “nonprofit industrial complex” is at its worst when policymakers design programs intended to help those who need it the most, but then make them so complicated as to be impossible to use — a brutal bureaucracy that serves no one. Benefits designed to help people become impossible to access, creating the need for new layers of bureaucracy to help people get access to the help. Instead of making the programs easier to use in the first place, nonprofits and low-income New Yorkers then get caught in an endless loop of case managers and navigators to help the case managers and train the trainers to educate the navigators. For example, the New York City Housing Lottery, Housing Connect, is immensely well trafficked — and immensely dysfunctional. Apartments sit empty for months at a time while applicants are asked over and over again for income eligibility information. Instead of fixing this broken system from the ground up, the City spent a million dollars on a “Ready to Rent” program to hire people to help New Yorkers navigate the Byzantine maze.
In a politically polarized time, this kind of problem unfortunately has stubbornly bipartisan roots. On the right, we still see vestiges of the Reagan-era “welfare queen” stereotype. Her specter haunts our public programs, demanding additional verification, extra eligibility steps and a constant need to justify “need.” Never mind that government programs not designed for low-income people never seem to have such requirements attached — when a New Yorker applies for a 401(k), or the mortgage interest tax deduction, no government form asks whether they need or deserve it, or whether they plan to spend the money wisely. These programs barely register to the public as government programs, and a customer-service orientation and streamlined process typically surrounds their administration. But applicants for food stamps or Section 8 face a very different landscape: They are awash in forms and questions and even investigations as to their eligibility and worthiness.
Progressives create administrative burdens as well. Instead of creating barriers in the name of fraud prevention or debating who “deserves” our help, the left opines on targeting in an effort to help parse the needs of specific populations. This can be done in good faith, but every time a program is created that is designed to help a specific subpopulation, a set of eligibility criteria (and evidence to satisfy that criteria) must be created as well. A program that specifically seeks to help survivors of domestic violence will inevitably generate procedures and processes to ensure that potential participants actually fall into that category. Ironically, the scarcity approach that leads progressives to argue for serving specific subpopulations can also scare them away or deter them from applying.
In this landscape, nonprofits must once again end up spending time organizing eligibility documents and learning new sets of paperwork criteria — staff end up pushing paperwork rather than helping people. Case managers and social workers who have devoted their lives to improve the lives of others spend their days helping their clients fill out forms and navigate bureaucracy. City agencies rarely even track how long it takes to get through an eligibility process, so nonprofits are left to hire more and more people just to navigate the bureaucracies that are poorly designed to assist the clients they serve.
New Yorkers need a safety net that is based on an ethic of customer service rather than rooting out the mythical millionaire who may try to fraudulently apply. We need to stop hiring navigators to plot a course through a broken system and instead design programs built for speed. We need to stop asking poor people to keep proving over and over again that they are poor and instead use administrative data that all three levels of government already have access to.
Nonprofits provide lifesaving services to New Yorkers in need every single day. The innovation and responsiveness that nonprofit social service agencies can provide make nonprofit contracting the right model for social services in New York City. But in order to get the best out of the nonprofit contracting model, we need to ensure that nonprofits are able to work to the best of their abilities. On the nonprofit side, this means taking pains to truly listen to people with direct experience receiving services. On the government side, this means removing administrative burdens and ensuring timely payments so that nonprofits can be as responsive as possible to the needs of New Yorkers.