Open letter to city council candidates: City and nonprofits have nuanced partnership - Generocity Philly

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Mar. 20, 2019 3:03 pm

Open letter to city council candidates: City and nonprofits have nuanced partnership

The nonprofit sector in Philadelphia is responsible for billions in revenue and more than a quarter of all employment in the city. Columnist Tivoni Devor thinks candidates for City Council should better understand what can help nonprofits keep going.

City Hall.

(Photo by C. Smyth for Visit Philadelphia)

Tivoni Devor’s “Getting Good Done” column focuses on new models of enacting impact.


Philadelphia is often referred to as eds and meds city, but most of those colleges, universities and hospital systems are nonprofits. Indeed, we have close to 10,000 nonprofit organizations in the city.

The Philadelphia nonprofit sector accounts for about $16 billion in revenue and 29.9 percent of all employment in Philadelphia.

Maybe we should be calling ourselves a DotOrg city.

As a large but fairly unorganized sector that has to remain bipartisan, is limited by law on how it lobbies, and is largely funding by government, nonprofits tend to be fairly quiet during campaign season. They might fight for some policies that align with their mission, but as a sector we can’t endorse candidates who would support our sector.

So this is me, as a private citizen, writing this, asking you to consider a couple of things:

Fully-funded contracts

In December, Philadelphia passed a bill to gradually raise the minimum wage of workers employed via city contracts to $15/hr by 2023. That’s great, and it also applies to many nonprofits that contract with the city.

The issue is that if the city does not raise the budgets on the contracts that outsource essential human services to nonprofits, those nonprofits, which are compelled to raise their workers wages, which is a good thing, will have to make cuts elsewhere, which is a bad thing, or they will have to do more fundraising which is a hard and unpredictable thing.

Maybe we should be calling ourselves a DotOrg city.

If City Council doesn’t raise the budgets to match their mandated salary increases, many more nonprofits will simply request a waiver from this obligation, which will mean more people that are fighting on the front lines of poverty will be earning poverty-wages, making the bill pointless.

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A public bank for nonprofits

Some candidates have been talking about creating a public bank, which would require major legislation and lots of pushback from the existing banks. I support this myself. One thing that incoming council members should consider is that every nearly contract the city gives to a nonprofit is reimbursement-based, meaning the nonprofit has to front the upfront costs of the work and get paid back by the city.

During the the beginning of the fiscal year, that is easily at minimum 90 days. In NYC, it’s much worse: 210 days late. What this means is that nonprofits have to come up with 90 days of cash to cover expenses while it waits to get reimbursed. Most do this with a line of credit they borrow from a bank, if they can find a bank to approve the line, and nonprofits are forced to borrow at market rates. The cherry on top is that the interest rate expense on the money they borrow is not reimbursable.

The city could set up a speciality public bank just for nonprofits to get a line of credit from using the city’s own contract and receivables as credit. The city could even charge 3 percent or so and make a profit while stabilizing the many nonprofits they work with.

City government and the nonprofit sector work very closely with each other here in Philly, and it is important for every candidate know and understand the nuanced partnership that exists and how the fragility of Philadelphia’s nonprofit sector effects the goals of the city as so much of Philadelphia’s safety net rests on their shoulders.

Full disclosure: Tivoni Devor’s wife, Jennifer, is running for one of three Philadelphia city commissioner spots in the upcoming elections.

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