FEGS Collapse Sign of ‘Dire’ Conditions for Jewish Social Service Agencies

Shaken by the abrupt collapse of one of New York’s largest social service agencies, a consortium of not-for-profit groups is warning that others may also be in jeopardy if government doesn’t radically reform the way it works with outside groups.

A report released today by the Human Services Council, an advocacy group for the nonprofit sector, found that underfunded government contracts, slow government payments, redundant audits and excessive oversight have left the majority of human services not-for-profits in New York “financially distressed.”

The report, researched and written by a team of not-for-profit executives, accountants and analysts, comes nearly a year after the large Jewish social service not-for-profit FEGS declared bankruptcy, leaving thousands of employees jobless. The collapse also forced tens of thousands of vulnerable clients to move to new service providers.

Members of the commission that issued the report include UJA-Federation of New York CEO Eric Goldstein and David Rivel, CEO of The Jewish Board, which took on a number of FEGS programs after the group’s collapse.

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