New York City Mayor Is a Force for Philanthropy in Tough Times

New program designed to spur volunteerism and efforts to help charities weather the recession could be a model for other cities, nonprofit observers say

What industry employs more people in New York City than finance, contributes $20-billion a year to the city’s economy, and numbers more than 40,000 organizations? The answer — the nonprofit field — is no surprise to New York’s mayor.

Nonprofit officials and others say Michael R. Bloomberg, in part because of his experience as a philanthropist and his recognition of the contributions that charities make to the city’s economy, has been unusually sensitive to the needs of nonprofit groups and committed to helping them thrive.

He has turned the Mayor’s Fund to Advance New York City from a nonprofit organization that primarily supported parades and centennials to one that since 2002 has raised more than $167-million from private donors to support 70 programs.

In April, he created a citywide program to encourage volunteerism, and announced a slew of efforts to help charities weather the recession. They include plans to reduce charities’ costs, make it easier for them to work with the city, and strengthen their management.

Observers say Mr. Bloomberg’s efforts could provide a model for other cities.

“What’s unusual here is how explicit the mayor has been in not just looking at nonprofits as agents with whom he can contract but as important forces in and of themselves in the community and deserving of generalized support,” says Stephen Goldsmith, a former mayor of Indianapolis and a professor at Harvard University’s Kennedy School of Government.

Helping Charities

Mr. Bloomberg’s proposals come at a time when the city and state are cutting support for charities, and they probably will not be enough to save struggling organizations. But the plans, many of which nonprofit officials have been pushing for some time, could make life a little easier for some groups.

The city, for example, is testing ways that charities might use a group-purchasing company that negotiates lower prices for supplies and services.

The Bloomberg administration also plans to introduce a standard contract by the end of this year for all social-service groups, and to build more flexibility into its grant-making process. It has already begun to provide charities with weekly online updates about the status of their grant requests.

In addition, it has expanded a loan fund for charities and offered management assistance to nonprofit officials through a hotline.

Four donors, meanwhile, have started a program with the city called Greater NY that is pairing business executives with charity leaders.

“Mayor Mike Bloomberg sees the nonprofit community through a unique lens,” wrote Patricia E. Harris, the city’s first deputy mayor, in an e-mail message. “He recognizes that this sector is critical to our city’s economy, providing a crucial social-services safety net and vital access to arts and culture.”

Led by Ms. Harris, city officials who work with arts groups and social-service charities began to draft the proposals last fall amid deepening concern over the recession’s toll on nonprofit groups. The conversations came out of earlier discussions with nonprofit leaders about adjusting city grants to take into account the increased cost of living in New York City.

Linda Gibbs, deputy mayor of health and human services, says the Bloomberg administration wanted to both minimize headaches for leaders of charities that got money from the city but also find ways to improve the overall efficiency and health of nonprofit organizations.

“These are things that go beyond the city’s traditional role,” she says. “But by being a convener, and offering to use our resources and the weight of our presence, our goal was to help the nonprofit sector move forward with some of these improvements.”

Praise From Nonprofit Leaders

Many nonprofit leaders have applauded the mayor’s focus on nonprofit groups as well as the specific approaches he has introduced, despite the city budget cuts that are adding to their woes.

“I’ve been at Good Shepherd for 29 years this summer and this is the first time I’ve seen such a thoughtful process in place for helping nonprofits,” says Sister Paulette LoMonaco, executive director of Good Shepherd Services, a social-service group that receives about 80 percent of its money from the city government.

Nonprofit leaders also say they are excited about NYC Service, a program announced in April to make it easier for New Yorkers to volunteer. It includes a one-stop Web site for people to locate volunteer opportunities; a plan to cut the costs of screening volunteers by developing a centralized system; and a hotline would-be volunteers can call for advice.

Under the plan, all public schools in New York will draft proposals for encouraging service among students and using volunteers.

NYC Service, which is being supported in part with federal stimulus dollars, placed 200 AmeriCorps Vista volunteers with 60 charities this month. The young people will work with the city and charities to develop and strengthen specific volunteer opportunities such as a roof-painting program to save energy costs, a mentorship program in middle schools, and a legal-services program.

The effort is led by Diahann Billings-Burford, a former City Year executive who now holds the title of chief service officer. Much of her job will be to determine the impact of the volunteer efforts — and raise private money to continue the program once federal stimulus dollars run out.

Setting a Trend

The service program has sparked some interest from other city governments, Ms. Billings-Burford said.

But even though the recession may prompt other mayors to look closely at the money their governments spend on charities, only one other big-city mayor — San Francisco’s Gavin Newsom — appears to have focused explicitly on ways to help charities through the recession.

In January, facing a big budget deficit, the city attorney of San Francisco and the San Francisco Foundation led a committee to examine how the cash-strapped city could save money by finding efficiencies in its relationship with nonprofit groups.

The high concentration of charities in New York and San Francisco may be one reason why mayors there have taken notice of the financial fix many nonprofit groups are in. New York has more than 40,000 nonprofit groups; San Francisco has 7,000 charities.

Still, many people in the nonprofit world hope that Mr. Bloomberg is at the leading edge of a trend.

Tim Delaney, president of the National Council of Nonprofits, argues that government has thrust increasing responsibility on charities over the past few decades without acknowledging their importance or reimbursing them adequately.

“If there is real substance behind his proposals of streamlining and his proposals of working with nonprofits in a constructive way, then I think he can really be a role model for other mayors and governors,” says Mr. Delaney. “The mere fact that he’s talking about nonprofits rather than ignoring them is huge.”

But others raise concerns about greater government involvement in charity management and wonder whether that’s an appropriate use of taxpayer dollars.

“I don’t quite understand why it’s the responsibility of government to try to strengthen the management of nonprofit agencies,” says Heather Mac Donald, a fellow at the Manhattan Institute. “There’s a risk of losing the multiplicity of viewpoints and approaches to solving problems that’s the advantage of having the independence of the civilsociety sector.”

Raising Private Cash

Some observers say more cities should take notice of how Mr. Bloomberg has raised private money to support his programs, especially ones too experimental for government dollars.

He has done that primarily through the Mayor’s Fund to Advance New York City. Started in the mid-1990s, the nonprofit group runs about 70 projects, including Million Trees NYC, an effort to plant trees around the city, and Opportunity NYC, which uses cash incentives to encourage people to make doctor’s appointments, pursue additional training, or take other steps that can improve their own and the city’s well-being.

The newest project at the Mayor’s Fund is Greater NY, started by two couples who approached the city during last fall’s economic free fall with ideas for encouraging business people to do more to use their expertise to help good causes. They have recruited 34 lawyers, financiers, and other corporate executives who will spend two years working with charity leaders, as well as contributing $60,000 each.

Cheryl Cohen Effron, who co-founded the program with her husband, Blair, and another couple, said she didn’t want to add another charity to what she believes is already an overcrowded marketplace.

“The Mayor’s Fund is the ideal vehicle for this because they have an infrastructure in place,” says Ms. Effron, whose husband is the co-founder of a financial advisory firm.

Some other cities have recently taken steps to work more closely with donors. Two years ago, Newark, N.J., created a “philanthropic liaison,” a job paid for by the Council of New Jersey Grantmakers. In 2008, the mayor of Philadelphia hired an employee to work with foundations and other donors, and Oakland, Calif., is in the process of establishing a similar position.

No ‘Band-Aid Solutions’

Mr. Bloomberg’s supporters say the steps in New York, if successful, could have an impact well beyond the recession.

“These aren’t Band-Aid solutions that they’re proposing,” says Bethany Godsoe, executive director of the research center for leadership in action at New York University’s Robert F. Wagner Graduate School of Public Service. “I don’t think the intention is to stop nonprofits from closing but to achieve real efficiencies in the system. These are really important changes that could be very useful in good times, too.”