Crains New York - June 17, 2013 - (Page 11)
ERIC T. SCHNEIDERMAN
State’s red tape is
choking nonprofits
T
hink of a multibillion-dollar industry hamstrung
by absurd, expensive, outdated rules, yet one that
New York state relies on to address some of its most
pressing needs. It’s not financial services or health
care. It’s New York’s vast network of nonprofit organizations, and reform is long overdue.
New York is home to many of the most effective, innovative
and influential charities in the world.The state’s nonprofit sector generates close to $200 billion in
economic activity each year. In this
difficult economy, nonprofits create
jobs; they employ more than one in
six New York workers, from scientists to social workers.
Yet we burden this industry with
red tape. Just following state laws
and regulations costs nonprofits up
to 30% of their operating budgets.
Other charities never get started,
scared away by maddening bureaucratic barriers to entry. It’s economically foolish and morally wrong.
We can do better. My office and
leaders of the nonprofit community,
working with state Sen. Mike
Ranzenhofer and Assemblyman
James Brennan, have proposed a
package of reforms to reduce administrative burdens and improve
accountability and governance. The
Nonprofit Revitalization Act would
free our charities to do more of what
they do best.
In the age of electronic communication, current law requires charities to circulate a blizzard of paper
notices and hold in-person board
meetings. The act will let nonprofit
boards use 21st-century technology
like email and Skype to carry out
their responsibilities, and let organizations e-file annual disclosures.
The act will also slash compliance
and organizational costs. New York
requires even relatively small charities to hire auditors to review their fi-
On jobs, Democrats
are out to lunch
L
eave it to Anthony Weiner to take a major issue for
all the Democratic mayoral candidates—lowwage jobs—and find a bizarre way to grab the spotlight. “It ain’t enough just to say, ‘I created another
job at a Red Lobster,’ ’’ he said in claiming the city
is creating low-wage jobs at the expense of middle-class jobs.“I
don’t know what Red Lobster is; it’s like a Lundy’s for tourists
or something.”
Tourists do like Red Lobster,
which is why there is one in Times
Square, but that is beside the point.
Is New York City creating low-wage
jobs at the expense of other kinds of
jobs? And is New York’s record
worse than the rest of the country’s
in doing so? The answers are a little
complicated, but the bottom-line
response is no—and the way Mr.
Weiner put it is completely wrong.
The chart at right compares job
gains in key sectors in New York and
the nation. These are Eastern Consolidated’s most recent seasonally
adjusted numbers.
Let’s start with low-wage jobs.
The city is gaining those much-criticized restaurant jobs at about the
same rate as the rest of the country.
More retail jobs are being created
here, in large measure because New
York has traditionally been “understored” (as retailers say) and because
nances. That can eat up a staggering
percentage of their budgets. Our reform exempts charities with revenues up to $500,000. Furthermore,
it makes it simpler for nonprofits to
merge, sell real estate and take other
such measures without a court order.
Starting a New York nonprofit is
so difficult that one prominent
lawyer has joked that advising a client
to incorporate here should qualify as
malpractice. Many must get “preapproval” from one agency before filing
incorporation papers with another.
Applicants are rejected for typos and
minor mistakes,forcing them into an
expensive
merry-go-round
of
lawyers, resubmissions and delay.
For most nonprofits, our reform
will eliminate preapproval. For all,
applications will be dramatically
simplified. And applicants will be
allowed to let state agencies correct
small errors on their behalf, rather
than forcing them to start over.
The proposal also bolsters fraud
prevention, curbing self-dealing
and conflicts of interest, and protecting whistle-blowers. It gives my
office tools to stop improper transactions and unwind insider deals.
New York owes a debt of gratitude to its charities for the profoundly important work they do for
people and our economy. As models
of service and innovation, they deserve a legal framework to match.
Eric T. Schneiderman is the attorney general
of New York state.
GOOD JOBS, BAD JOBS
% of jobs gained by sector since
the end of the recession
SECTOR
Construction
Manufacturing
Retail
NYC
U.S.
+0.4% +4.4%
-0.1% +8.6%
+15.4% +11.1%
Information
+4.0%
Finance, RE
+2.9% +2.3%
Professional*
Tech, advertising
-0.7%
+1.5% +9.5%
+10.3% +4.0%
Education, health +25.5% +19.8%
Restaurants
+16.7% +15.2%
Government
-5.0% -10.2%
*Accounting, law, architecture
Source: Eastern Consolidated
GREG DAVID
gentrifying neighborhoods are attracting the kinds of shops that
shunned them in the past.This is bad?
As for higher-wage jobs, the city
is doing fairly well. Manufacturing
and construction are lagging,but factory jobs will do well just to remain at
the current level, and construction
didn’t implode here the way it did in
many other parts of the country.
Look at technology, advertising
and even finance. New York is far
outpacing the U.S. with what are
typically well-paying jobs. Professional services have lagged some because of the woes of big law firms,
but even there the worst is over, and
accounting is booming.
Oh, and there are those middleclass jobs Mr. Weiner keeps harping
on. Well, health, education and government are three major sources of
middle-class jobs, and New York is
doing very well in those sectors compared with the country as a whole.
Politicians exaggerate, of course,
but the level of understanding of the
city’s economy in the Democratic
race leaves a lot to be desired.
June 17, 2013 | Crain’s New York Business | 11
http://www.mogil.com
http://www.mogil.com
Table of Contents for the Digital Edition of Crains New York - June 17, 2013
IN THE BOROUGHS
IN THE MARKETS
THE INSIDER
SMALL BUSINESS
BUSINESS PEOPLE
OPINION
GREG DAVID
FOR THE RECORD
REPORT: FORTUNATE 100
THE LIST
REAL ESTATE DEALS
CLASSIFIEDS
NEW YORK, NEW YORK
SOURCE LUNCH
OUT AND ABOUT
SNAPS
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