For decades, Hispanic nonprofit organizations have been a great source of help for the Latino community, offering a range of services from health care to after-school programs and legal help with immigration. But at a time where great need remains, this sector is undergoing a deep crisis.
"Unfortunately, the advances we had achieved in previous generations have vanished in the past 12 years," says José Calderón, executive director of the Hispanic Federation, which represents about 60 of these organizations in the New York area.
According to Calderón, the economic crisis and policies under Mayor Bloomberg's administration have hurt these community organizations. "There has been a real focus on supporting large nonprofit organizations, which in many cases aren't community-based," he says.
New York has 40,000 nonprofits, which employ more than 490,000 people or 15 percent of the city's nongovernmental workforce—and 2,500 of them do business with the city.
Many of these organizations survive thanks to private donations. However, Latino groups depend mostly on public funds. "For our community, philanthropy is foreign to us," Calderón says. Charitable foundations give less than 2 percent to Latino institutions, "and that is tragic," he added.
Harmed by rules
Given that it's an uphill battle to raise private capital, Calderón complained that the rules imposed by the current administration to access public funding are "unfair" and have resulted in less money and fewer contracts for Latino organizations, because they're poorer.
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.
"Latino organizations don't have bankers on their boards of directors or the support of foundations," says Moisés Pérez, founder and ex-CEO of Alianza Dominicana.
The problem even affected one of the city's largest Latino nonprofits. The Institute for the Puerto Rican Hispanic Elderly, Inc., founded in 1978, recently lost a contract it had with the city for one of its centers, Leonard Covello in Spanish Harlem. The Institute's founder and director, Suleika Cabrera, had managed it for two decades.
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.
To address criticism about the lack of funding directed to the small nonprofit sector, the Bloomberg administration has created several initiatives that benefit these organizations. In 2009, the mayor announced that he would double the Returnable Grant Fund (RGF), which provides loans without interest so that organizations can manage administrative costs. His administration also decided to expand the eligibility criteria for nonprofit organizations to be able to access the funds. In 2011, the mayor also donated approximately $311 million of his own money to 1,185 nonprofits.
A history of hurdles
Latino nonprofit organizations grew during President Lyndon B. Johnson's "war on poverty" in the 1960s. "There was a need to serve the Puerto Rican population in the '60s," says Carmen Cruz, ex director of the Leonard Covello Senior Center.
When federal funds became scarce, that forced many organizations to seek more funding from local government. Cruz says that the crisis in the sector began during the administrations of Mayors Ed Koch and Rudolph Giuliani, who implemented major funding cuts. Nevertheless, everyone interviewed agreed that the policies of the current mayor were what ended up "choking" groups.
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.
In this race for funds, Latino groups are at a disadvantage against larger organizations. "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."
Cruz explained that the Covello Center served about 175 seniors on a daily basis with a staff of only seven people. "I directed this senior center for eight years, without getting any raises," she says.
In addition, Calderón complained that the board that evaluates proposals has no connection to the communities that receive the services offered by their organizations.
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.
Competing for funds
The funds that the City Council distributes, known as discretionary funds, are another source of public funding. Each Council member receives a specific amount at the discretion of the Council speaker, which is distributed to organizations in his or her district that have applied for them. The Council also has several committees that receive additional funds for various social programs.
The way these funds are distributed has come under strong criticism in recent years. In a 2012 report, Citizens Union found that the process is strongly politicized, and in many cases, it provides fewer benefits to the poorest districts.