Late payments force program cuts at NYC Haitian nonprofit, signaling broader equity issues

NEW YORK — After two years of waiting for more than $1 million in payments from the city for programs carried out through Haitian Americans United for Progress (HAUP), the nonprofit’s leader said she has begun to stop, phase out or delegate some services that hundreds of clients had come to rely on. Elsie Saint-Louis, CEO and executive director at HAUP, said she had already consolidated their two Queens offices into one, reduced staff hours, told them making payroll depends on when the city pays, canceled an annual fundraiser, and begged HAUP’s debtors for understanding on one too many occasions. She has also been vocal publicly about the late payments’ severe impact on payroll and other areas in hopes of garnering support.

Then last week, after sharing a news report about a nonprofit in the Bronx closing with HAUP’s staff, Saint-Louis received several scathing replies, calls and messages from employees. One blamed her for causing ‘considerable hardship for your employees.’  

In her reply, which Saint-Louis shared with The Haitian Times, she said she had already addressed the concerns of missed payroll repeatedly. She also sent a mass email to the community saying that explaining to staff why their paychecks are late or negotiating with vendors to extend grace was an ”exhausting cycle.” 

“The delays in funding not only compromise our ability to deliver services, but also jeopardize the very fabric of nonprofit organizations like ours,” Saint-Louis said in her message.

 “This is not merely a financial issue; it is a moral one. Nonprofits are the backbone of underserved communities, stepping in where government and other institutions fall short. Yet, when the systems designed to support us falter, the most vulnerable pay the ultimate price.”

Experts and advocates seem to agree. 

“It’s a huge equity issue. Because the newer, smaller organizations don’t have access, it ends up being that these [smaller] organizations are financing the government in a way,”

 David L. Thompson, acting CEO and vice president of public policy for the National Council of Nonprofits.

The city’s longstanding funding process for nonprofits, which calls for the organizations to spend the money contracted allocated first and then seek reimbursement, too often fails small groups serving low-income communities, according to industry experts, reform advocates and community members interviewed over the last few months. The entire process of contracting and payment is so broken, they say, it fails smaller nonprofits relying on money from the city to stay afloat. 

Such lengthy waits for payment can often lead to friction among employees and vendors and cause the community at large to either lose faith or outright accuse nonprofits of wrongdoing. In a larger landscape where nonprofits are competing for a smaller pool of funds, delays such as the one New York City is experiencing can even cause organizations to shut down, as other outlets have recently reported. 

One advocate went as far to say that communities that are already struggling to provide services end up indirectly funding the government since those groups must perform the contracted work before the city can reimburse them. 

“Across the country, the reimbursable grant versus upfront grants is a huge issue,” said David L. Thompson, acting CEO and vice president of public policy for the National Council of Nonprofits. “The larger, stronger organizations are getting all the grants. The rich get richer.”

“It’s a huge equity issue,” Thompson continued. “Because the newer, smaller organizations don’t have access, it ends up being that these [smaller] organizations are financing the government in a way.”

In a joint statement to The Haitian Times about the city’s efforts to pay nonprofits, the Mayor’s Office of Nonprofit Services (MONS) and Mayor’s Office of Contract Services (MOCS) said they are implementing recommendations from the Joint Task Force to Get Nonprofits Paid On Time formed in 2022. 

“We will continue to actively review City programs and policies impacting the nonprofit community,” the offices said in the statement.

Delayed funds failing underserved communities 

Nonprofits make up nearly 10% of the workforce nationwide and 17% in New York, according to the Bureau of Labor Statistics. In the city, they are a fixture in many underserved communities, including in the city’s Haitian communities – central Brooklyn and southeast Queens. In an interview with The Haitian Times, Mayor Eric Adams lamented the number of nonprofits, saying with more than 1,100 nonprofits serving immigrant organizations, a consolidation was overdue. 

“Everybody can’t have a nonprofit,” Adams said at the time. “I know it’s hard for people to accept that. They think their nonprofit is the best. It will solve every problem we are facing.”

Though it is no excuse for the lateness of funds, some say the expectation that nonprofits can provide a service or product and then submit the expenses for reimbursement is one reason Haitian groups falter or fail. 

“That works in the Jewish community, but it’s a different story in the Haitian community,” said Gina Faustin, an entrepreneur who provides marketing and fundraising services to nonprofits. 

“Most of the Haitian organizations don’t have that kind of money,” she explained. “When a Haitian nonprofit receives a grant, the community has to raise the cash. If you’re doing business with the city and the state, you’re going to suffer unless you have a community that’s going to see it through.”

[embed: Mayor Adams right about Haitian agenda, but it’s no excuse for city’s failures, some say]

Thara Duclosel, a policy and advocacy coordinator at Nonprofit New York, said a delay in delivering services or lag in programs may damage trust within the community. When community members hear from government officials that a local service organization has been granted funds, but they see no improvement in their quality of life, that can raise questions. 

“On the outside looking in, it’s like, ‘Well, you got that money. Why aren’t you actually providing the services,’” said Duclosel, who is also Haitian American. “It creates the lack of trust in the community, and it’s an overall disservice.” 

With so many Haitian organizations providing an array of services — from housing and immigration support to childcare and eldercare, food insecurity to beautiful spaces and arts programming that the family can enjoy — failure to receive payments have a domino-like effect.

“[When] they’re unable to get paid on time, they’re not just not getting paid on time,” Duclosel explains. “The remainder of their time and resources are now spent on fighting to get the money that they were supposed to have, as opposed to continuing to improve their programming or bettering their services.”

Fixes in the works, but not soon enough

In recent years, advocates nationwide have sought to end the practice of government reimbursement to alleviate the burden of fundraising and spending first for some groups. But while they’ve had a few victories, the wins have not been on a scale large enough to have much impact on smaller communities. 

At the federal level, for example, the National Council of Nonprofits has provided guidance for the OMB to make upfront payments the default for its projects. Last year, California enacted a law for grantees to provide 25% of a grant they provide up-front payment. That alone, Thompson said, is acknowledgment that reimbursable grants are harmful. 

In New York, officials say they are taking steps to alleviate the burden on organizations by coming up with a plan to catch up on overdue payments. However, it’s not clear how much of it is being implemented or by when. Earlier in the summer though, the city appointed Johnny Celestin as a deputy director for nonprofits, one of the recommendations.

Creating MONS has helped pinpoint and address structural challenges to timely payments and how to foster better collaboration with nonprofits, the Mayor’s office said in the November statement. Improvements to PassPort and launch of PassPort Vault, as well as renewed investment in the Returnable Grant Fund for interest-free loans all helped communities, the office said.

For HAUP – among the Haitian community’s largest nonprofit with a budget of $6 million to $7 million to fund more than 20 programs and activities – the city’s efforts don’t see sufficient or speeding up payment quickly enough. Saint-Louis said waiting for the city has caused HAUP to fall deeper into arrears with vendors, consultants and some employees already owed back pay. And, it is harder to maintain some costly compliance requirements to receive payments or be eligible for loans.

On that Wednesday before Thanksgiving when the email exchange took place, Saint-Louis was busy withdrawing from two DYCD programs serving children at P.S. 189 and P.S. 241 and finalizing plans for HAUP’s annual Thanksgiving lunch. Part of that includes reaching out to board members and deep-pocketed individual donors, most of them Haitian, who have been setting up a legacy campaign that could help cover shortfalls or late city payments in the future. 

She also hopes the city considers moving toward the model some foundations use of providing all or 50% of the funds when a contract is signed. This week, according to The City, a Queens assembly member planned to introduce just such a bill requiring nonprofits to be paid within 30 days.

In the meantime, Saint-Louis said, HAUP must return to a bare-bones operation.

Yet, even though the organization has no money, so many clients called asking about the Thanksgiving lunch at Sacred Heart in Cambria Heights, Saint-Louis said she reached out to local eateries and her network to get donated food, drinks and supplies. 

“For some of them, they don’t have anywhere else to go,” said Saint-Louis, while finishing up an email to DYCD. “So we have to do what we have to do.”

The post Late payments force program cuts at NYC Haitian nonprofit, signaling broader equity issues appeared first on The Haitian Times.

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Late payments force program cuts at NYC Haitian nonprofit, signaling broader equity issues was first posted on December 4, 2024 at 8:39 am.