NYC Cash Flow Fears Loom Even As Nonprofits Secure Payments

NEW YORK, NY— The Mamdani administration will pay billions of dollars in scheduled July 1 payments to hundreds of nonprofit organizations after abandoning a proposal that would have delayed funding for social service providers across New York City.

The reversal followed mounting pressure from nonprofit leaders and City Council officials, who demanded answers after reports revealed City Hall had considered postponing payments because of worsening cash flow problems.

Dora Pekec, Mayor Zohran Mamdani’s senior spokesperson, told NBC New York the City would send nonprofits the full amount owed by the July 1 deadline.

The announcement halted plans for a protest outside City Hall, where dozens of nonprofit groups had organized around the message: “Our work is essential. Our pay should be too.”

The funding dispute intensified after City Council Speaker Julie Menin questioned why Budget Director Sherif Soliman failed to disclose the city’s apparent cash concerns during more than four hours of testimony before the council on June 9.

“During his entire four-plus hours of testimony, there was not one instance where Director Soliman mentioned any issue related to fiscal constraints that could delay the payments,” Menin wrote in a June 15 letter to the Mayor.

Despite the administration’s decision to proceed with payments, Menin said council leaders will move forward with an oversight hearing to examine the city’s financial position.

The dispute centers on a law the City Council passed in 2025 to address chronic delays in payments to nonprofits serving vulnerable New Yorkers, including people experiencing homelessness, domestic violence, mental health challenges and foster care involvement.

The law, which takes effect July 1, requires the city to provide nonprofits with 50 percent of their annual contract award at the start of the fiscal year. The previous requirement was 25 percent.

Although the law allows a delay of up to 180 days during periods of financial strain, nonprofit leaders argued their organizations depend on the funding to meet payroll and operating expenses.

City Comptroller Mark Levine said the City must take steps to control the budget through the end of the year.

“In large part a direct result of the structural imbalance in our City’s budget, in which in recent years our recurring expenses have exceeded our recurring income,” Levine said.

Mamdani said the City’s payment deadlines do not always align with when revenue arrives.

“Revenue collection does not always align with the timing of expense payments and that is during any given fiscal year,” Mamdani said.

The Human Services Council of New York estimates those payments will total approximately $3.5 billion.

“What I can say is no matter the conversation that is happening, there is no doubt in my mind or anyone’s mind in City Hall that every single nonprofit will be paid in full for the services that they have rendered,” Mamdani said.

The administration has not disclosed how it plans to address the underlying cash flow issues that prompted discussion of the payment delay.