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Brooklyn nonprofits feel financial pinch as demand for services escalates

May 15, 2020 Raanan Geberer
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A report published this week by the Center for an Urban Future reveals that a growing number of nonprofit organizations, including many in Brooklyn and Queens, are experiencing financial losses of more than $1 million because of the COVID-19 pandemic.

The study shows that the nonprofits’ financial losses stem from two factors resulting from the pandemic: 1) they are dealing with a sea of new operational costs—from setting up new IT systems to purchasing protective equipment and hiring temporary workers to replace full-time staffers that are out sick; and 2) they are confronting sometimes staggering losses in revenue due to canceled fundraisers.

Several of the nonprofits interviewed for the report said that their financial losses from the first several weeks of this crisis have already exceeded $1 million, with one predicting $3 million in revenue losses.

For example, Flatbush-based CAMBA expects more than $1 million in unanticipated costs, including $150,000 for cleaning services and $200,000 in IT costs.

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And Queens Community House anticipates $1.1 million in revenue losses from the cancellation of the 17 summer camps it runs and another $500,000 in lost funds from the cancellation of the SYEP program.

Necessary cutbacks have been made at the same time that demand from clients has escalated.

For example, Heights and Hills, which serves Brooklyn Heights, Cobble Hill and nearby areas, “was getting 30-50 new requests for services each day and couldn’t keep up with the phone calls (we usually get about 35 requests per week),” said Executive Director Judy Willig. The group already had a growing waitlist for services before the crisis.

In another example, CAMBA estimated a 30 percent increase in call volume to its HomeBase homelessness prevention programs in Brooklyn and Staten Island. “We have many first-time callers who have never experienced a housing crisis and have no idea about tenant protections and housing law,” said President and CEO Joanne Oplustil.

Queens Community House has seen “a huge surge in demand for our services. With home-delivered meals, in a three-week time period we saw a 10 percent increase each week. At the two food pantries we operate, demand has also increased dramatically,” said Executive Director Ben Thomases.

With all these problems, nonprofits have started new programs and expanded outreach efforts. Arab-American Family Support in Cobble Hill, Brooklyn, has expanded efforts to make sure families are enrolled in health insurance and SNAP benefits “and have access to the culturally and linguistically competent information they need to remain healthy and safe,” said Development and Communications Kelly Sesil.

Red Hook Initiative, another Brooklyn nonprofit, has transitioned to meet the crisis. It is now distributing food to about 150 households per week; creating an emergency telemedicine system with volunteer doctors; and is providing adults with up to four mental health support sessions.

Although the city’s human services nonprofits are more vulnerable financially than ever, the study finds that New York’s government leaders may be magnifying the problem, the Center for an Urban Future said. Most of the nonprofit leaders interviewed for the report applauded the de Blasio administration for steps it took in the first weeks of the crisis to support the human services sector — including its pledge to be flexible with contracts already in place.

But many nonprofits now say that the city is backpedaling on that promise. Indeed, a letter sent out from the City Council in late April suggested that the city may no longer reimburse organizations for services already provided between late March and late April — a potentially devastating financial blow for many nonprofits.

“Human services nonprofits have been the unsung heroes of this health and economic crisis, but a growing number of them may not be financially strong enough to continue meeting the needs of vulnerable New Yorkers,” says Jonathan Bowles, executive director of the Center for an Urban Future. “It’s vital that city and state leaders ensure the financial stability of the nonprofits responsible for delivering vital safety net services in New York.”

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