Mismanagement and City Policies Trigger Latino Nonprofit Crisis

Community leaders attribute the financial crisis facing Latino nonprofits to rules imposed by the Bloomberg administration when it comes to accessing city funding. However, it's not only problems obtaining public funding. As in the case of the iconic Alianza Dominicana, its downfall came from problems within. (Photo by Zaira Cortes via El Diario-La Prensa)

Community leaders attribute the financial crisis facing Latino nonprofits to rules imposed by the Bloomberg administration when it comes to accessing city funding. However, it’s not only problems obtaining public funding. As in the case of the iconic Alianza Dominicana, its downfall came from problems within. (Photo by Zaira Cortes via El Diario-La Prensa)

Latino nonprofits have served the community with services like child care, ESL classes, health services and immigration support, oftentimes filling in the gaps created by language or cultural barriers. But these groups are facing what an El Diario-La Prensa article by Marlene Peralta calls “a deep crisis” when it comes to survival.

Unlike many of the city’s 40,000 nonprofits which rely on private donations, Latino organizations depend heavily on public funding. This reliance on city money has triggered the “crisis” in light of not just the economic downturn but also the policies of the Bloomberg administration, said José Calderón, the executive director of the Hispanic Federation, which represents about 60 New York-based Latino organizations. However, the city is not entirely at fault for the sector’s current struggles. Some organizations also have their own internal problems to confront.

In a translation of the El Diario article, which appears in City Limits, Calderón called city rules to access public funding “unfair.” He attributes the decreased dollars and fewer contracts for Latino groups to the fact that they lack the money or resources to access the funds they rely on to operate.

One of the requirements to land city funds is that an organization have capital available. In addition, funds are given through reimbursements, meaning the organization must spend money in advance before receiving compensation. This puts Latino organizations—which according to the most recent Census data, represent the poorest group in New York City—at a great disadvantage.

To present a glimpse of the dichotomy between groups with connections and those without, Peralta uses the example of the Institute for the Puerto Rican/Hispanic Elderly, one of the largest Latino nonprofits in the city. It recently lost a city contract for one of its center, the Leonard Covello Senior Center in East Harlem, in favor of of a well-connected senior center.

Instead, the Department for the Aging recently awarded the contract to the Carter Burden Center for the Aging on the Upper East Side. This major agency, which has a budget that comes mostly from private contributions, has solid connections with the city’s elite, as well as large institutions Bloomberg himself has funded in his role as philanthropist.

Obtaining funding means competing in a race for a limited number of contracts, which pits modest Latino organizations against much larger ones, putting the former at a disadvantage. According to Calderón:

“Our agencies are short-staffed, they lack resources, and then the executive director ends up writing the proposals and being in charge of program development, among other things,” Calderón says. “It’s tough to compete against organizations that have 10 directors of development and fancy brochures.”

The article details the competitive process involved in seeking public funding.

The majority of these small institutions get a large part of their funds as contractors for city agencies, with contracts awarded through a process known as Requests for Proposals (RFP). During this process, nonprofit organizations must compete for a limited list of public contracts. The Department for the Aging (DFTA) and the Department of Youth and Community Development (DYCD) are two of the agencies that offer this bidding process and select the organizations.

Calderón cited another problem that lends itself to limited funds for Latino nonprofits: the board that considers the proposals have nothing to do with the communities that are applying for monetary resources. In response:

DYCD Commissioner Jeanne B. Mullgrav said through a statement that her agency, when evaluating proposals, “uses a wide variety of both program and contract managers within the agency as well as outside readers, with an emphasis on selecting readers who are familiar with the program and the scope of work we are seeking.”

Mullgrav also said that contracts are granted according to data indicating which groups and sectors with the biggest need for resources.

But it’s not just city policies leaving the future of Latino nonprofits in limbo – some groups have been entangled in cases of “corruption and mismanagement.” One major example is Washington Heights-based Alianza Dominicana, whose once 350-strong staff and $15 million budget provided support and programs in domestic violence and childcare, among other areas. However, its downfall came after a probe by the city’s Department of Investigations found misuse of funds among the agency’s employees. After the city froze Alianza’s funding, it practically wiped the organization off the radar.

What remains of Alianza, which had $2 million in debt, is being managed by Catholic Charities. Now its services are few and limited to youth programs.

In light of all these factors, a bigger picture emerges: the problematic dependence on the local government and the seemingly give-and-take relationship that ensues between nonprofits and politicians.

Political scientist Angelo Falcón says that the “excessive dependence” of nonprofits on local government has a “detrimental effect,” causing the loss of “much-needed independent activism” that is able to put the issues that impact the community at the forefront.

“Before, the money wasn’t coming from the city,” says Falcón, director of the National Institute for Latino Policy (NiLP). The federal government was the main resource for this sector, giving nonprofits some independence from local leaders. The New York Times reported that in 2008 Bloomberg pressured nonprofit organizations funded by his administration to advocate for his proposal to extend term limits to three terms.

While at the core of the financial struggles is the reliance on the local government, what is crucial to solving these problems is, in the end, the support of the community.

Experts recognize that being almost absolutely dependent on the local government is at the root of the financial problems of these organizations, which at one time were also the major activist voice of the community. Calderón says that as long as the community isn’t an important part of the progress of the organizations serving it, the problem will continue. “The Jewish community is the best example,” he says. The big difference is that Latinos have the highest growth and are the poorest group in the city.

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