City expands fast-pay pilot for small nonprofits

Mayor Zohran Mamdani and City Council Speaker Julie Menin said Thursday they are expanding a pilot that pays small nonprofits their City Council grants upfront, a fix for a contracting system that groups have long said leaves them fronting costs for months.

Under the expanded Discretionary Grant Pilot, nonprofits whose Fiscal Year 2027 Council discretionary awards add up to $25,000 or less from participating city agencies can receive 100% of the money within 30 days after both the group and the agency sign a grant agreement. The joint City Hall and Council announcement says up to 800 organizations could qualify. The process skips nine steps of traditional discretionary contracting and moves money up to nine months faster, according to the city.

What changes

The city is treating these small awards as grants instead of contracts. Participating agencies named in the announcement include the departments of Aging, Health and Mental Hygiene, Social Services, Veterans Services, Youth and Community Development, Housing Preservation and Development, and Small Business Services. The expansion also covers providers with expiring multi-year discretionary contracts.

In the coming days, the administration, the Council and the agencies will pick participating groups based on award size and clearance status and notify them. Grant agreements are scheduled to go out in November. Groups will have 30 days to return them, and payments are expected in late 2026 or early 2027.

Why it matters

The city says discretionary contracts make up nearly 70% of its human services contract backlog. During the pilot's first year, Fiscal Year 2026, it paid $1 million to more than 100 providers in about three months on average, compared with more than 12 months under the old process.

amNewYork, which covered the announcement at the Bushwick Starr theater in Brooklyn, reported that the expansion will not clear the older backlog. Asked about groups still owed money on contracts from fiscal years 2024 and 2025, Mamdani pointed to newer contracts, saying about 96% of FY2027 human services contracts were submitted for registration by Sept. 1. Council Member Lincoln Restler, who chairs the Contracts Committee, argued that pulling small awards out of the contract pipeline frees agency staff to process bigger ones faster.