DiNAPOLI RELEASES REPORT ON NONPROFIT INDEUSTRY

State Comptroller Thomas P. DiNapoli released a report showing that nonprofit organizations in 2022 provided 1.3 million jobs to New Yorkers, accounting for over 1 in 6 private sector jobs in the state. However, while the number of nonprofits increased nationally between 2017 and 2022, New York experienced a decline in both nonprofit organizations and jobs, with employment falling by 4.1%.

“Nonprofits play an important role in our state and local economies and are an essential part of the fabric of the communities they serve, but their numbers are shrinking,” said DiNapoli. “Many nonprofits rely on government funding to support their services, and contract delays and slow payments have contributed to some of the challenges they face. Policymakers need to ensure state agencies process contracts and payments for nonprofits on time so they can carry out the work on which so many New Yorkers rely.”

In 2022, there were over 344,000 nonprofit organizations nationwide, representing 3.1% of all private sector establishments. Of these, 33,536 were located in New York, accounting for 5% of the private sector statewide. Nonprofits provided 12.8 million jobs across the U.S., with New York leading the way at 10.6%.

Despite their importance, nonprofits in New York have struggled. Between 2017 and 2022, the state saw a net loss of 173 nonprofit was particularly hard-hit during the pandemic, with a nationwide loss of 580,426 jobs. One in every five of these lost jobs was in New York, making it the state with the lowest nonprofit job recovery rate.

By 2022, employment at other private sector establishments had fully recovered, but nonprofit employment in New York had regained only 7.4% of the jobs lost, leaving fewer positions than in 2017. Nonprofit job growth also lagged behind other sectors during this period. While nonprofit employment declined by 4.1%, public sector jobs decreased by 1.5%, and other private sector employment increased by 1%.

The Comptroller’s report highlights the regional impact of nonprofits, noting that almost 60% of the state’s nonprofit organizations and two-thirds of their employment are concentrated in downstate regions, with nearly half of all nonprofit jobs located in New York City. Upstate regions, however, rely more heavily on nonprofits for private sector employment. For example, in the Southern Tier, 1 in 4 private sector jobs is at a nonprofit.

Nonprofits also experienced employment declines in all regions between 2017 and 2022. The largest drops were in the Mohawk Valley (-12.3%), Western New York (-10.3%), and the Capital Region (-9.5%).

In addition to employment challenges, nonprofits face significant delays in state contracts and payments. Nonprofits provide essential services on behalf of the state, including mental health care, public assistance, storm recovery aid, food programs, and arts and cultural initiatives. Under state law, contracts must be executed within 150 to 180 days after funding is approved. However, DiNapoli’s 2023 report found that over 5,000 contracts—56%—were processed late by state agencies.

Late contracts have been a persistent issue, forcing nonprofits to delay services, defer hiring, lay off workers, or rely on loans and credit to continue operations. Comptroller DiNapoli has called for timely processing of contracts and payments to ensure nonprofits have steady funding and can avoid disruptions to critical services.