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Letter to Gov. Paterson

April 2, 2010

The Honorable David A. Paterson
Governor, State of New York
Executive Chamber
Albany, NY 12246

At a time when New York State's nonprofit organizations are being hit especially hard by the recession, we support State Comptroller Thomas DiNapoli's recommendations to improve accountability and oversight of State contracts with nonprofits.

Nonprofits across Tech Valley and throughout New York State enhance our quality of life and contribute to the social well-being and economic vitality of our region. These organizations make a difference in society, even as demand for their services is increasing while fundraising is on the decline. As of June 2009, New York State had 31,000 active contracts with nonprofits worth $14.6 billion. The Comptroller's recent report showed that 87 percent of nonprofit contracts valued at more than $50,000 each were not approved by the state prior to the work starting.

An audit found that 5,260 out of 6,033 contracts, worth $2.7 billion, took an average of 184 days for approval. New contracts were approved almost nine months after the contract start date, on average. In addition, nonprofits have seen a decline in charitable giving and a drop in endowments for philanthropic foundations by 29 percent between 2007 and 2008.

In 2008, according to the National Center for Charitable Statistics, 1,690 public benefit nonprofits, classified as 501(c)(3) in the Internal Revenue Code, operated in the four counties of the Capital Region -†Albany, Rensselaer, Saratoga and Schenectady. Using the same percent increase to estimate the number of current employees, 65,160 Capital Region residents work in nonprofits today. The combined revenues of the 1,690 firms total $6.9 billion.

For these reasons, we applaud Comptroller DiNapoli for his call to standardize State contracts with nonprofits, implement a centralized monitoring and audit management system to reduce processing time, and make contract payments timely to ensure nonprofits can properly plan and start newly approved and funded projects. We must act now to support our nonprofits and their mission of helping individuals, families and communities across New York State.


Mark N. Eagan, CCE
President & CEO
Albany-Colonie Regional Chamber of Commerce

Charles P. Steiner, CCE
Chamber of Schenectady County

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