Working to help NYC finally pay Its nonprofit contractors

In January, the Mayor’s Office of Nonprofit Services – established in 2023 primarily to get city agencies to pay the city’s myriad nonprofit social service providers in a more timely manner – named Michael Sedillo, who’s worked for the city for nearly a decade, as its third executive director since it began. Since then, according to his office, he’s secured $5 billion in advance payment for nonprofits in fiscal year 2026, relaunched the ContractStat performance management system to identify bottlenecks in contract processing and helped establish Chief Nonprofit Officers at all city agencies to improve service delivery to nonprofits.

But leaders at a handful of service nonprofits that City & State checked in with before talking to Sedillo said that they hadn’t heard of the office or of Sedillo. Others who knew of him and the office said that he was accessible and seemed personally invested in helping nonprofits get paid, but that his office didn’t have the autonomy to make the kind of large-scale city reforms that would get countless nonprofits the millions they are owed. 

Michelle Jackson, executive director of the Human Services Council of New York, a membership group of 180 nonprofits, put that total figure of owed payments at $860 million, per an April city Comptroller’s office report. She went so far as to call Sedillo’s office (whose establishment her own group opposed) “redundant,” saying that the business of improving reimbursements would be better handled by the Mayor’s Office of Contract Services. 

“Mike has a lot of good ideas, is communicative with the nonprofit sector and is trying his best, but the situation he inherited is the worst payment delays we’ve ever seen,” she said. “And there’s not enough staff citywide to process this work because of Mayor Adams’ hiring freeze and his call for every city agency to cut back spending 5 to 10%.” She also said that the city should be releasing open regular reports showing how much of its debt it had paid down via the various city agencies that owe nonprofits the money.

Not surprisingly, in a June 23 interview with City & State, Sedillo – who delivered the keynote speech at City & State’s May 23 Nonprofit Trailblazers event – pushed back on much of this, defending the importance of his office and detailing his own accomplishments there since January. City & State again caught up with Sedillo,who  talked about his challenging transition from being the one “in the weeds” to the one “on the balcony,” and why (it appears) he hopes to stay in his current role when a post-Adams mayoral administration is likely seated next year. This interview has been edited for length and clarity.

Michael, thanks for talking today. If we met at a party and you told me you were the ED of the Mayor’s Office of Nonprofit Services and I said, “What do you do?”, how would you answer?

The simple version is that we really work to hack bureaucracy to make sure that it’s responsive to our critical partners in the nonprofit sector that we rely on to deliver critical and essential human services to New Yorkers. Then I’d further explain that the city spends about $20 billion on human services year in and year out, contracting with our nonprofit providers to build and maintain the safety net. So our office is really the connective tissue that ties together the city government and our nonprofit partners. 

And if I asked, “What are you doing on a fairly typical day?”

One thing I’ve really tried to do is get out there and meet folks from the nonprofit sector. We’re really big on trying to do site visits, not just to our nonprofit partners but to our partners in the different city agencies. So on a regular basis, we work from various city agency offices, working alongside the public servants and making sure they understand our priority, positioning each agency’s Chief Nonprofit Officer in a way that their authority and plan is understood by all partners across units, and making sure that they have the authority and blessing of the commissioner to solve problems. 

We also work internally on our anchor programs like ContractStat, bringing in data to understand where our pain points are across the administration or agency by agency. Or we might be putting together the programming for our Excellence in Human Service Delivery Awards that we’re planning for August. Or we’re working towards a briefing that we do on a weekly basis for senior City Hall officials, which allows us to lift up data and pain points in the contracting process and tee up decisions for them to make. We’re always pushing forward a culture of customer service across our agencies.

I reached out to a handful of nonprofit leaders asking them to tell me about your office. And you’ll be happy to know you’re well-liked. They said that you’re great and really trying to help nonprofits get paid but that the office doesn’t have a lot of power and that they’d rather have seen these efforts come out of the MOCS office. And very concretely, they said that it’s great that you’ve opened up this funding for advance payment, but they also said that about $860 million still has not been paid in back payments. 

But their biggest point was that they thought your office was redundant and didn’t have the power it would need to make the big changes needed to pay off these back payments.

I would say a few things. One, I started my career in the MOCS office so I’m well aware of what they can and can’t do, and how this office can be a real value add to them. Yes, MOCS is the procurement policy lead and they own the city’s procurement platform PASSPort, but my job is to be that internal advocate and to make sure that city agency leaders are really focused on this. We have a great partnership with MOCS. And there are definitely things like the $5 billion advance payment directive that wouldn’t have happened without me in this role and this office existing.

You mentioned weekly reporting. I report to Deputy Mayor Ana Almanzar, who convenes a weekly call with the first deputy mayor, the chief of staff and the chief counsel. That really is where we derive our power. We have a direct connection because my deputy mayor runs this call that I developed the programming for, to keep this issue [of timely payment] salient and top-of-mind for them.

So having been at City Hall for a number of years, I understand the yin and yang of combining MOCS’ expertise and technology lens with our ability to navigate City Hall and agency leadership and direct staff at agencies, including the CNOs, which is something my office created and that I control.

What about the sector’s desire to see the numbers regularly on how you’re paying down that supposed $860 million in back payments?

We’re doing it internally with our partners. This was called for in Executive Order 47, which calls on each city agency and oversight agencies like MOCS and OMB to create CNOs. It also requires my office in partnership with MOCS to create a performance management dashboard that we call ContractStat, a data-driven performance management dashboard. We are incredibly data-driven in working with our agency partners and showing them their key cycle times, both from a quantitative standpoint, like, “How long does it take you to complete these invoices?” and “What is your average cycle time for budget modifications?” 

Will you make that pay-down data open though, as some in the nonprofit sector are calling for?

My chief issue here, and I think only our office could be doing this, is driving a change across city agencies to a culture of customer service. Having been in city government for a while, I understand that culture change takes time and I think you get a lot more with honey than vinegar. Part of this culture change across agencies is, I’m not interested in shaming people. I don’t think that’s a good motivator for folks. I’m interested in supporting folks. 

One of the things I negotiated before starting this role is to exempt human service contracting positions from the hiring freeze at city agencies. We’ve unlocked nearly 200 positions that the agencies couldn't hire before. 

I think that's the important government negotiating hacking work that we’re doing from our office. But when you add a public element to that, which I think folks could read as being shamed, it hurts my ability to change culture internally. Now having said that, of course we believe in transparency. And when folks want to know, “Where do I stand? What's the status of my payment?”, they can reach out to me directly or to the CNO at their contracting agency. That is information we are happy to pull to help them understand where things are. 

Why do you think that so little of the city’s outstanding debt to nonprofits has been paid down since January?

Number one, over the last year we’ve had a perfect storm of different issues. MOCS transitioned us to the PASSPort platform. There’s a change-management aspect to that. Then two, in 2024, the mayor announced a $741 million cost of living adjustment. That’s great, but the way that’s reflected in providers’ budgets is through budget modification processes. Then they have to go through and show agencies how they’re modifying their budgets to reflect that. So, how quickly can they process those modifications to get the payment?

When I ran the invoice backlog initiative process in 2022, the main thing that was helpful to us was organization and alignment – having project managers that reported to commissioners. And now we have our CNOs who are accountable for their results. And two, having data that we reported not externally but to our principles, both commissioners and deputy mayors, so they knew where the sticking points were so they could lean in and hold their agencies accountable. And so that’s what we’re doing on a weekly basis. 

If you just look at a measure of how much of projected budgets have been paid out, we’re at a healthy place right now. Although right now, the end of the fiscal year is always a tough part of the year for our nonprofit providers – ahead of advance payments, which we just set for fiscal year 26 at a record high $5 billion. So it’s a number of factors. But we’re working to hold agencies accountable. 

[A day after the interview, Sedillo provided further explanation via email: “We are proudly data-driven in our approach, but I learned from the Clear the Backlog Initiative that the real power in making managing performance is in getting alignment from City Hall principals and Agency leadership on agency performance – that's our focus with sharing data. We're aware of providers' pain in getting their Indirect Cost Rate (ICR) paid out from previous years, which is why earlier this year the Administration sent a directive to agencies making clear the City will honor accepted ICR rates. With historic levels of advances this upcoming fiscal year, we will turn out attention and support to working with agencies to ensure previous years' ICRs are paid out in a timely manner.”]

Since you came in January, what are you proudest of in the most concrete terms possible?

The advance payment directive that we got across the finish line. I don’t believe exorbitant advances are really the panacea here. But we think it was the right thing to do given what I’ve discussed about folks struggling with changes to the new system and trying to access funds. 

The second thing I’d say is having the CNOs at each agency – we really worked to build a community with them and make sure that they’re learning from each other and scaling best practices. 

Can you give me an example of the function and value of the CNOs?

I won’t name names, but there is a very well established nonprofit in the city that I think had thrown their hands up in working with the city because they had, for years, not been able to access some capital funding for some updates to their building. They were paying tens of thousands a month on interest on a bank loan because they could not get the funds on this capital improvement. But by having a CNO at this agency, we were able to put them in touch with each other to really unstick the situation in a way that had not been done for months or years.

Will you talk about how you got to your current position and what did you learn in your prior positions that are helping you now?

I grew up in the Dallas suburbs and started my career as a Teach for America first grade teacher in the Bay Area. I loved it but it was really about learning how you set a culture and manage people. That’s where I really took my main management framework, what I call behavior narration. You asked me before, “Why don’t you make the data public?” But I think it’s more about setting a standard and celebrating those who meet or exceed the standard and supporting those who don’t. So I learned that from my time as a teacher.

When I moved to New York City in 2013, I started as a community organizer for StudentsFirstNY, an education nonprofit. I built a chapter of parent advocates in Bushwick, and from that learned how to have one-on-one conversations with folks and connect their needs to a larger vision. Then I went to graduate school at Columbia for my MPA, where I worked for professor Esther Fuchs, who was a big champion of city government and helped me learn that’s where I wanted to be. She told me, “Get in wherever you can.” A position at MOCS was available. I did not know what procurement was, but I had to Google it, figure it out and then go to this interview. 

So I was at MOCS for three years, where I built relationships in and around procurement. Then in 2019, I became Deputy Mayor Phil Thompson’s deputy chief of staff, where I really learned about strategy and organizing. Then I was retained by incoming Deputy Mayor Sheena Wright, who let me lead the Clear the Backlog Initiative in 2022. Then I worked for former First Deputy Mayor Maria Torres Springer, who taught me how to tell your story and play offense with communications and press. 

What do you think is your strong suit?

I think I’m really strong at asking questions to understand a problem or a person’s needs and connecting that to a larger vision. It’s another way of saying “negotiation,” but a lot of people see that as just defending your own position. The magic is asking questions to deeply understand someone else’s needs. It’s very possible that your needs and their needs are harmonious. 

What’s most challenging for you skill-wise?

I've been telling my team this: I am now in an executive role and having to learn how to stay on the balcony, if you will. I’m used to being the staffer who gets in the weeds and comes up with a recommendation. But in this new role, I’m having to figure out how to trust and empower my team to be able to come up with solutions on their own and bring them back to me after diligencing them. 

Is diligencing a new verb now? I’ve never heard it. [laughs]

It’s a verb in government. [laughs] 

Can you talk about a typical day from beginning to end, and how you balance work and life?

I have two kids and a beautiful wife in Ditmas Park, Brooklyn, where my wife grew up. I wake up at six when my youngest son comes into our bed. Then either I make them breakfast and my wife works out or vice versa. Then I’ll drop the kids off at school and e-bike to the office, even though I sometimes work from home a couple days a week. That’s my time to listen to music and pump myself up for the day. I usually get to work about 8:30 or 8:45, across from City Hall. I learned from Torres-Springer this system she developed of a nightly binder that chunks information and tees up decisions for her. So my staff puts that together for me the night before and I come in and read it and look at things that need to be top of mind for me that day.

So what might be in there?

“Here’s a read-out on the conversation with X and Y on Thing Z yesterday. Next step could be X or Y, which would you like to take?” Or: “Here’s the data from the latest dashboard of ContractStat for you to review, digest and ask questions about if you need to.” 

Then I meet with the deputy mayor on a weekly basis, so I might be preparing for that. Also meeting with chief nonprofit officers to go through ad hoc issues or work through items in their action plan. Or maybe meeting with different oversights to talk about different policy reforms that we’re pushing forward. If I’m visiting a nonprofit, I’ll ask for a data pull as to contracts and payments so I can be informed when I go visit them. And also preparing for our weekly call with our deputy mayors. 

I try to be home at a decent hour to be with my kids. I’m an only child and my dad passed away when I was young, so it’s important for me to spend focused time with them. Typically I’ll make a big meal Sunday nights so we have Monday or Tuesday leftovers. But by Thursday or Friday, my wife and I throw our hands up and order in. 

The kids go to bed around 8 or 8:30, then I log back in and see what else needs my attention. On a good night, that’s just 15 to 30 minutes. Then I try to go to bed around 10 or 10:30.

Assuming that the mayoral administration come next January is not Eric Adams’, as it likely will not be, do you hope to be carried over in your role?

I want to always be in service to New York City in whatever way is best. I think I’m uniquely qualified for this position and I’ve done a lot in the five months I’ve been in this role. I would love a lot more time to roll out different reforms and culture change across agencies.