The Chinese-American Planning Council runs a senior center in Chinatown that provides meals and services for thousands of older New Yorkers. It’s one of several CPC programs funded, in part, by the city.

Recent news that chronically late government payments are being blamed for forcing a different New York charity to shut down has CPC leaders evaluating their own books, and their own future.

“The city of New York, for example, owes CPC close to 10 million dollars over the last two fiscal years for services that we’ve already delivered to children and seniors and their families,” Wayne Ho, CPC’s president and CEO, said.

Ho is among those stunned by the announcement last month that Sheltering Arms is folding.

What You Need To Know

  • News that Sheltering Arms is closing down due to financial problems and late government payments after nearly 200 years serving the city has sent shockwaves through the nonprofit sector

  • Chinese-American Planning Council President Wayne Ho says the city's owes his organization close to 10 million dollars for services that have already been delivered to New Yorkers

  • Advocates say payments to nonprofits for contracted services are often considered low-priority for city and state governments

Since 1831, the Sheltering Arms has offered services for vulnerable children and families, including foster care, homeless shelters and mental health treatment.

According to a spokesperson, “financial challenges resulting from the pandemic—combined with chronic underfunding and late government payments—are forcing Sheltering Arms to transfer many of our programs and staff to other high-quality organizations.”

Ho says too often, human services organizations are contracted by the city or state to provide programs, without being paid on-time for their effort and reimbursements sometimes taking years.

“We are using money that we raised through our annual gala or through our donors in order to fill the gap of our city and state contracts, that unfortunately do not pay the full cost of providing services,” he said.

Industry advocate Michelle Jackson of the Human Services Council says it’s long running problem that’s bigger than any one administration, and blames the competitive contracting process, which might work for a company hoping to work for the city to build a bridge, but not a nonprofit.

“If you’re in construction, you don’t start work until you have a signed contract, but human services can’t do that,” explained Jackson. “You can’t close a summer youth program waiting for a program to be registered, and honestly, government takes advantage of that.”

With Sheltering Arms shutting down, advocates say the time for reform is now.

“This is a wake up call for elected officials and city officials to understand that we really need to change the system said Ho.”

Mayor Eric Adams has pledged reforms. A task force formed in partnership with city Comptroller Brad Lander found that "over three-quarters of the City’s contracts with nonprofit organizations arrived at the Comptroller’s office for registration after the start date.”  

A City Hall spokesperson sent the following statement:

“Cutting red tape, fixing procurement issues, and making our city more efficient for nonprofits that do important work for New Yorkers every day have been central goals of the Adams administration. To support nonprofits, we announced the newly created Mayor’s Office of Nonprofit Services to cross-collaborate with agencies, announced the creation of ContractStat as an oversight initiative to address issues before they surface, and launched the 12-week ‘Clear the Backlog’ initiative to help get nonprofits with overdue bills paid for their work. Already, this administration has worked to clear the existing $6.2 billion backlog, resulting in over 2,600 previously unregistered, retroactive contract actions being registered or submitted for registration, helping hundreds providers. While we are taking steps in the right direction, we know we still have more progress to be made to support our nonprofits.”