Mayor Zohran Mamdani's administration is considering delaying payments to hundreds of nonprofit organizations that serve some of New York City's most vulnerable residents, children in foster care, victims of human trafficking, people fleeing domestic violence, as the city's cash reserves sink to their lowest levels in years, NBC New York first reported.
Sources familiar with internal City Hall discussions told NBC New York that Mamdani's budget team is closely watching anticipated cash flow ahead of a July deadline to begin advance payments required under a local law the City Council passed last year. That law requires the city to pay social service nonprofits 50 percent of their annual contract award up front at the start of the new fiscal year, a measure designed to fix decades of chronically late payments to the organizations that run afterschool programs, summer youth services, mental health treatment, and domestic violence shelters.
Now, barely a year after the Council acted, City Hall may invoke a loophole in the very same law to avoid paying on time. The statute includes an exception allowing the mayor's budget team to defer the required advance for 180 days if timing is deemed "impracticable due to fiscal constraints."
City Comptroller Mark Levine's office reported that New York had roughly $9.4 billion in cash on hand as of May 29, down 24 percent from the same period in 2025 and the lowest figure in several years. Levine cited a $4.6 billion drop in Covid-related federal aid during the current fiscal year as one driver.
The comptroller warned the picture will get worse. He projected the city's cash reserves would average under $9 billion over the next four months and could fall to as little as $5.2 billion by the end of September. That compares with $7.7 billion a year earlier.
Michelle Jackson, executive director of the Human Services Council of New York City, estimated it would cost $3.5 billion to advance the required 50 percent to as many as 700 nonprofits covered under the law. Her organization represents more than 180 of those nonprofits.
For a city already running low on cash, that is a significant outlay. But the nonprofits did not write the law. The City Council did, and the organizations made plans accordingly.
The potential delay is not an abstract budget question. It lands on organizations that are already borrowing to stay afloat because the city has been slow to pay them for years. Jeremy Kohomban, executive director of The Children's Village, called the NBC New York report "an absolute gut punch." His organization serves children in foster care and victims of human trafficking.
Kohomban said that even if the city made the full 50 percent payment on time next month, his nonprofit would still be owed $4 million from past services already rendered. Children's Village spent a million dollars in 2025 alone on interest payments for loans taken out to keep programs running while waiting for the city to pay its bills.
Jackson described the broader pattern in stark terms. One legal services provider, she said, had to take out a $20 million line of credit and was paying $80,000 a month in interest, money that could have hired ten staff members.
"We have a legal services provider who had to take a 20 million dollar line of credit, paying $80,000 a month in interest. You could hire ten staff people for that. That money would be better spent preventing evictions or helping immigrants."
Jackson said nonprofits have already signed leases and hired staff based on the expectation that the advance payments would arrive. Delaying them now would stretch already thin budgets and force more expensive borrowing, shifting the city's fiscal problems onto organizations least able to absorb them.
This is a pattern that predates Mamdani, but it is one he now owns. His first 100 days in office were already marked by broken promises on housing and homelessness. Stiffing nonprofits that care for foster children would add another line to that ledger.
What makes the situation worse is that City Hall apparently kept the Council in the dark. Council Speaker Julie Menin said Mamdani's budget officials testified before the Council earlier in the week but never mentioned the possibility of delayed or reduced nonprofit payments.
"This is deeply concerning. This is news to us."
Brooklyn Council Member Lincoln Restler, who chairs the Council's Contracts Committee and co-sponsored the law that doubled the required advance from 25 to 50 percent, was blunter. He said he was unaware the administration was even considering a delay.
"We've heard crickets from the administration. We passed legislation just last year to increase upfront funding to nonprofits so they could consistently pay their staff on time. It would be very concerning to me and to my colleagues in the Council if the Mamdani administration failed to implement this law."
Sources told NBC New York that the mayor's office gave Comptroller Levine a heads-up only within the past day that officials were "zeroing in" on nonprofit advance payments. A spokesperson for the Comptroller's Office said it was "ready to work with OMB to take whatever steps we can to avoid short-term borrowing by the city and any substantial reduction in nonprofit advances."
The timeline matters. Budget officials testified before the Council without raising the issue. Then, within a day, the mayor's office quietly flagged it to the comptroller. The Council learned about it from a news report. That is not how transparent government works.
Mamdani senior spokesperson Dora Pekec offered a statement that promised full payment for services already rendered, but conspicuously did not commit to making the required advance payments on time in July.
"Nonprofit organizations play a vital role in our city, providing invaluable services for New Yorkers, and all nonprofits will be paid fully for their rendered services. We will work with our partners in government and the nonprofit sector to meaningfully implement this new law while continuing to manage the city's cash flow."
Read that carefully. "Paid fully for their rendered services" is backward-looking. It says nothing about the forward-looking advance payments the law requires. "Meaningfully implement" is the kind of phrase that leaves room for a six-month delay under the statute's fiscal-constraints exception. And "managing the city's cash flow" is the predicate for invoking that very exception.
The contradictions in Mamdani's governing approach are becoming difficult to ignore. He campaigned as a champion of working-class New Yorkers and the social safety net. Now his administration is maneuvering to use a legal escape hatch to avoid paying the organizations that actually deliver those services.
The fiscal pressure on New York City is real. Federal Covid aid is drying up. Cash reserves are declining. The mayor and Council must agree on a balanced budget by July 1. None of that is fabricated.
But fiscal constraints do not change who absorbs the consequences of delayed payments. It is not City Hall officials. It is not the budget analysts. It is the nonprofit workers who may not get paid on time. It is the children in foster care whose caseworkers are stretched thin. It is the domestic violence survivors whose shelter programs run on borrowed money at punishing interest rates.
Kohomban put it simply. He said his organization is "right there in the heart of Mayor Mamdani's promise to make New York a great city." He described himself as "heartbroken."
Jackson, who leads the Human Services Council, said she believes Mamdani inherited many of the city's budget problems. But she warned that delaying future advance payments would have "expensive consequences" for the nonprofits she represents, organizations that have already been planning and spending based on the law's promise.
The mounting political pressure on Mamdani from multiple directions makes the nonprofit payment question more than a fiscal footnote. It is a test of whether the mayor's progressive rhetoric matches his governing priorities when money gets tight.
Several important questions remain unanswered. Has the administration made a final decision? Will the budget team formally invoke the 180-day deferral? Which specific nonprofits beyond those already named would be affected? And what does City Hall estimate the total advance payment obligation to be?
The broader political dynamics surrounding Mamdani make those questions urgent. A mayor who came into office promising to clean up late payments to nonprofits now appears to be laying the groundwork to delay them further, using the fine print of the very law that was supposed to fix the problem.
The Council passed the law. The nonprofits relied on it. The mayor's team testified before the Council this week and said nothing. And now, through unnamed sources and carefully hedged statements, City Hall is floating the possibility that the money may not come on time.
When a city government cannot pay the people who care for its foster children and trafficking victims, the problem is not just fiscal. It is a question of what the government actually values, and whether promises to the most vulnerable mean anything at all when the budget gets tight.
