Children’s Village President and CEO Dr. Jeremy Kohomban testified before the NYC City Council on April 4, 2016. The hearing, held by City Councilwoman Helen Rosenthal, was called to discuss the financial challenges facing nonprofit organizations in the city, particularly the need for city and state governments to provide funding for the indirect costs associated with administering programs.
The full text of his testimony follows:
Good afternoon, I am Dr. Jeremy Kohomban, and I represent four organizations that employ over 1,500 New Yorkers. Together, The Children’s Village, Harlem Dowling, Inwood House, and the Bridge Builders Community Partnership in Highbridge serve more than 20,000 New Yorkers each year.
We serve a broad range—from children considered to be at highest-risk for harm to children and families who simply need a meal or a safe and affordable place to call home.
The Children’s Village has benefited from the leadership and support of New York City, which has historically been exemplary in helping us do this work. The Mayor’s 2.5% COLA and the push for equity are examples of this leadership. In return, we, like the other nonprofits represented here today, have been there for New York City during the good times and in those difficult times. In fact, let me go even further by saying that charities like us created New York City’s safety net. Today, during crises, we are the lifeline that New Yorkers depend on. We are embedded in communities, many of us are available around-the-clock and, in many cases, we are the visible representation of responsive government.
However, I believe that government has taken us for granted. We lack the support needed to continue to make our City the envy of the world. The current status quo of underfunding, delayed payments and competing and confusing regulatory demands is draining us of resources and driving many mission-critical organizations into survival mode.
Our entire sector provides services at rates far less costly than any government agency. Despite this reality, contract reimbursement often refuses to take into account the annual escalations that include healthcare, cost of living and a living wage for our staff. At The Children’s Village, our Federally-approved indirect rate is 13%, but NYC caps indirect costs at 10%, forcing us to absorb the additional costs. In addition to this underfunding, we also deal with delayed reimbursement and the often hidden cost of unreimbursed interest payments that we are forced to make on extended credit lines.
While we are untiring in our fundraising, our donors are most interested in helping children and families and least interested in subsidizing what they are increasingly seeing as government shirking its responsibility. I would be remiss if I did not note that, without our generous donors, The Children’s Village would not be in a position to serve New York as we do today, perhaps not at all.
Mandate overload and confusing and competing regulations are an additional burden, with real human and financial costs. There continues to be a trend of well-intended mandates and regulations that are imposed on us with no additional reimbursement. We have also seen the intentional shifting of liability from government to nonprofits. These translate into additional costs for the nonprofit and also for government. This also make our front-line work extremely difficult by creating a “gotcha” culture–basically, a culture of fear among those employees who we depend on to be on the front lines, often serving in very difficult circumstances.
What’s stunning about all of this is that some, and possibly most of these mandates and regulations can be streamlined. Is it really necessary or useful to anybody to have a hundred-plus program and fiscal audits every year? We believe mandates and regulations can be streamlined to be supportive rather than repressive, if we work together.
In closing, I ask that you consider working on three problems that would make a significant difference in our ability to serve New Yorkers: fund nonprofits at fair rates; pay us on time; and work with us to streamline and reduce unfunded mandates.
Thank you for the opportunity to testify about these important issues.