Mayor Zohran Mamdani and City Council Speaker Julie Menin said Thursday that the city will expand a program to speed up payments to hundreds of small nonprofits, allowing up to 800 organizations to receive their funding upfront rather than waiting months for reimbursement.

Under the expanded program, eligible nonprofits receiving a cumulative $25,000 or less in City Council discretionary funding from participating city agencies will receive their full awards within 30 days after both the organization and agency sign a grant agreement.

The program, launched under former Mayor Eric Adams' administration last year, distributed $1 million to more than 100 nonprofits during its first year, cutting average payment times from more than a year to roughly three months, according to city officials.

The announcement, made at the Bushwick Starr Theater in Brooklyn, comes amid longstanding complaints about a city contracting system that requires nonprofits seeking relatively small grants to navigate much of the same paperwork as organizations receiving awards worth hundreds of thousands of dollars.

"Too many not-for-profit organizations have not been receiving their funding on a reasonable timeline," Menin said at Thursday's announcement.

"This is funding they need to literally keep the lights on and get their employees paid, and it's funding they were promised," she added. The program will cover additional city agencies and providers with expiring multiyear discretionary contracts. Participating agencies include the departments of Aging, Health and Mental Hygiene, Social Services, Veterans Services, Youth and Community Development, Housing Preservation and Development, and Small Business Services.

City officials expect to identify and notify eligible organizations in the coming days, with grant agreements scheduled to be issued in November. Payments are expected to begin in late 2026 or early 2027.

The city's problems paying nonprofits are a long-running saga.

As amNewYork reported in June , a report by former City Comptroller Brad Lander found that New York City owed nonprofit service providers more than $1 billion, while advocates described the difficulties smaller organizations face navigating paperwork and waiting for payments.

Some providers said they had been expected to begin work before their contracts were formally registered, leaving them to cover payroll and other expenses while waiting for city funding.

The Mamdani administration also faced scrutiny earlier this year over reports that it was considering delaying implementation of a 2025 law requiring larger upfront payments to certain nonprofits because of cash flow concerns. City Hall announced in June that those payments would proceed as planned.

But Thursday's expansion won't resolve the city's larger contracting backlog. Asked about nonprofits still awaiting payments on contracts dating back to fiscal years 2024 and 2025, Mamdani said his administration had submitted approximately 96% of fiscal year 2027 human services contracts for comptroller registration by Sept. 1, allowing providers to begin receiving advance payments.

That figure, however, relates to newer contracts and does not indicate how much of the older backlog has been cleared. "When it comes to this work, it has to continue. It has to scale up," Mamdani said. "Anything that works to expedite these payments, we will do."

Mamdani said discretionary contracts account for nearly 70% of the city's human services contract backlog, contributing to payment delays for providers.

Council Member Lincoln Restler, who chairs the Council's Committee on Contracts , said processing a $5,000 contract requires roughly the same administrative effort as one worth $500,000.