Report Finds NYC Nonprofits Plagued With Chronic Problems

A year after Federation and Employment Guidance Services (FEGS), a $250 million health and human services behemoth in New York City, went bankrupt, the city's human-services sector is struggling to serve an estimated 2.5 million people, a report from the Human Services Council found.

The report, "New York Nonprofits in the Aftermath of FEGS: A Call to Action," found that in addition to FEGS, a number of human-services organizations in the city have recently closed their doors. According to the report, underfunded government payment rates—80 cents or less per dollar of true program-delivery cost—are the primary driver of the sector's financial distress.