June 15, 2026 – “Nonprofit New York commends Governor Hochul and the NYS State Legislature for passing a budget that provides historic funding for education, childcare, and a hard-fought cost-of-living adjustment,” said Jacqueline Ebanks, NPNY President & CEO. “This budget represents a significant step forward in recognizing the baseline needs of our communities and the workforce that supports them. Securing a 2.7 percent targeted inflationary increase and historic expansions for early childhood care are undeniable victories. 3trHowever, the reality is that nonprofit organizations are heading toward a massive multi-billion-dollar fiscal cliff as federal pandemic aid expires and the cushion traditionally provided by the City’s operating surplus is all but gone. True partnership means securing immediate relief today, while structurally protecting the sector for tomorrow.”
Nonprofit New York highlighted the following key pillars of the FY27 budget landscape:
Critical Injections for Families and the Workforce
- 2.7% Targeted Inflationary Increase (TII): Up from 1.7% in the Executive Budget, this additional $104 million will stabilize human services providers and help cover the cost of surging overhead and workforce expenses.
- Historic Childcare and Early Education Expansion:
- $205 million to expand 3-K access across the 5 boroughs.
- $73 million to launch “2-Care” pilot program
- $561 million increase in Universal Pre-K (UPK) statewide funding, raising the minimum per-pupil reimbursement rate to $10,000.
- Civic, Legal, and Healthcare Expansions:
- $50 million to community-based organizations (CBOs) that support immigrant and local communities navigating federal enforcement threats.
- $8 million for the Daniel’s Law Pilot Program to support non-police, peer-led mental health and substance use crisis response teams.
Looming Challenges Remain
- The Federal and State Grant “Cliff”: State and federal categorical grants directly flowing to New York City are experiencing a sharp pullback. Current projections show a $1.9 billion decline in State grants alongside a $3.6 billion drop in federal funding.
- Declining City Operating Surplus: The City’s operating surplus is projected to plummet from $3.79 billion to just $238 million—a 94% drop. This shrinking safety net means the city will have little room to rescue local non-profits if state funding drops further in subsequent cycles.
- The 2.7% TII is Helpful, But Trailing Inflation: While the 2.7% adjustment for “O” agency providers is an improvement, it falls short of the actual cost-of-living increases felt on the ground over the past few years, and fails to account for all nonprofit workers, particularly the lowest wage earners.
- Nonprofit Contracting and Procurement Delays: The Legislature has acted to address longstanding challenges in the state’s contracting system by passing S9855A and S9761. We urge Governor Hochul to sign these bills into law and provide nonprofits with the tools and resources they need to continue delivering vital services to New York.
“With state funding lines locked in, Nonprofit New York is shifting its advocacy focus to the City’s budget process and timely passage of the FY 27 budget. Funding on paper remains purely theoretical if it is bottlenecked by bureaucratic delays,” said Matt Gonzales, NPNY Vice President for Policy and Advocacy. “We must ensure that the newly allocated education, health, and housing funding proposed in the Executive Budget materializes and is quickly dispersed to community-based organizations without the systemic procurement delays that historically exhaust nonprofit cash reserves.”
