The Honorable Kathy Hochul

Governor of the State of New York

New York State Capitol Building

Albany, New York 12224

Dear Governor Hochul,

We, the undersigned 875 nonprofit organizations and individuals from across the state, respectfully urge you to quickly approve S.9761 (Mayer) / A.10741 (Paulin) & S.9855 (Mayer) / A.11179 (Paulin) into law. These bills will reform New York State’s Prompt Contracting Law and ensure nonprofits have timely access to operating funds adopted in the state budget and improve transparency and accountability that will strengthen nonprofit operational infrastructures. The measures will improve the grant administration process for state agency staff by providing needed clarity and consistency. As reliance on nonprofits grows, the sustainability of New York’s nonprofit sector — and the lives and rights of millions of residents we serve — depend on the enactment of these bills.

Nonprofits play a crucial role in the state’s safety net, economy, and community. They deliver vital services from early childhood education, mental health counseling, homeless housing, substance use treatment, to legal services and cultural programming, to name just a few. These otherwise underserved social safety net services and cultural resources are an extension of the State, providing resources to millions of New Yorkers every day. Nonprofits are also an important economic engine in the state. In 2025, nonprofit organizations employed 1.3 million people and paid $96.8 billion in total wages^i. Many of these positions provide stable benefits, including health insurance and retirement, and allow for public service loan forgiveness. Importantly, the deep connections nonprofits have to communities they serve provide direct pathways to employment that are unique to this sector.

Yet, the current contracting system directly undermines both service and business operations. Chronic contracting delays, inefficiencies and inconsistencies across agencies, burdensome processes, and reimbursements regularly delayed by six months or more totaling hundreds of millions of dollars leave organizations and workers to operate under impossible processes that make it nearly impossible to serve our communities.

A 2025 white paper from the Human Services Council, the New York Council of Nonprofits, the New York Legal Services Coalition, Nonprofit New York, and Nonprofit Westchester, titled “Nonprofits in Peril” emphasizes the detrimental effects these challenges have on New York’s nonprofit sector.

One heartbreaking example: “We have ‘floated’ this program with reserves for six months as we continue to wait on a contract, but are reaching the end of the line with our funds. Soon we will need to begin laying off the program’s 11 staff and communicating to low-income residents that we cannot offer these vital services.”

Additionally, a survey conducted among nonprofits throughout New York State, revealed that 33% of those with contracts with the state were owed funds for services already delivered – totaling at least $58 million. Applying that finding to all contracts held by nonprofits, New York State may owe nonprofits more than $650 million statewide. This is money that has already been appropriated by the legislature, but for which payment has been delayed beyond current prompt contracting and payment law. Meanwhile, 65% of nonprofits report concern about funding basic operations in 2026, a figure that has been trending upward post pandemic. After the veto of S.7001 Mayer/

A.7616 Paulin in the prior legislative session and given the federal attacks on nonprofits, immediate action is needed to protect New York nonprofits to ensure these organizations can keep serving clients.

More specifically, the legislation would:

● (S.9761 Mayer / A.10741 Paulin) create transparency, predictability, and timely reimbursement -- reducing financial uncertainty for nonprofits:

• It requires clear payment schedules in written directives;

• Raises awareness of the short-term revolving loan fund;

• Increases loan access to cover up to 100% of contract value; and

• Allows subcontractor invoices as proof for payment.

● (S.9855A Mayer / A.11179 Paulin) ensures nonprofits have working capital upfront, instead of waiting months to be reimbursed and be able to more fully cover the costs of actual operation by requiring:

• One automatic advance payment equal to 25% of total contract value in quarter one;

• Payments will be issued within 30 days of contract execution; and

• Clarifying that de minimis indirect costs are included in all contracts.

These are not radical demands; they are basic, good-government reforms that align State practice with State expectation. The legislation was carefully crafted in response to concerns raised in Veto Memo No. 94 of 2025, and is well positioned for action.

Governor Hochul: You have the power to right these wrongs. We ask you to prioritize and quickly sign these bills into law. It is time to treat nonprofits as true partners, not afterthoughts.

Thank you for your leadership and commitment to strengthening New York’s safety net. We welcome the opportunity to answer any questions or to discuss further with your staff.

Sincerely,

Empire Justice Center

Human Services Council of New York

New York Council of Nonprofits

New York Legal Services Coalition

Nonprofit New York

Nonprofit Westchester

Partnership for the Public Good

+ 868 signatures — See attached file for full list of signatures.