Gov. Kathy Hochul (D-NY) recently told a forum in Albany, “I need people who are high net worth to support the generous social programs we have in our state,” adding that for wealthy New Yorkers still in the state, “maybe the first step should be go down to Palm Beach and see who you can bring back home.”
It was an extraordinary statement, admitting that Democratic policies drive residents to better-run states. Before Hochul makes her pitch for ex-New Yorkers to return from their exodus, she may want to get a grip on her state’s high taxes and spending, particularly the amount New York City sends to nonprofit organizations, which are given billions of dollars for unquantifiable results.
New York state’s comptroller released a report on the city’s spending on its unsheltered homeless population last week, showing that in 2025, it doled out $368 million to the city’s 4,504 unsheltered homeless people. This is $81,705 per person. It is on top of the $3.5 billion the city’s Department of Homeless Services spent on housing and services for the city’s 86,000 sheltered homeless.
Thanks to a 1981 New York state court decision, the city must provide housing to any homeless person who asks for it. A significant minority of New York City’s homeless population refuses free housing because, most often, they are mentally ill and drug abusers. Combined, New York City’s DHS spends almost $4 billion a year on its homeless population, 97% of which goes to outside contractors, overwhelmingly nonprofit organizations.
Nonprofit “charities” enjoy far more trust among Americans than either local governments or for-profit businesses, and far more trust than the federal government. But much of that trust, especially when the nonprofit organizations get their money from the government, is misplaced.
A 2024 New York City investigation of homelessness service providers found widespread nepotism and self-dealing in the charity sector. In addition to hiring immediate family members as senior employees, nonprofit group leaders often hired their own for-profit firms with the money they’d received from taxpayers, including shelter executives hiring their own security firms to provide security for the shelters they ran.
There is nothing “nonprofit” about the pay that supposedly “charitable” organizations award their executives. Dozens of executives rake in more than $500,000 a year, and some pull in close to $1 million. One homeless shelter operator, Victor Rivera, was convicted of conspiring to commit fraud in 2022 after media reports surfaced that 10 women had accused him of sexual assault and harassment. But as the 2024 report shows, the corruption in New York’s nonprofit sector is endemic and goes far beyond one man.
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Hochul and other Democrats want wealthy people, and middle-class ones too, to return to blue states and bring their tax dollars back with them. But why should they? Not only is Democratic spending on homelessness not solving the homelessness problem, but it is also being actively wasted on fraud and corruption in the nonprofit sector.
Until Democrats can solve their nonprofit problem, they should not expect wealthy residents and their tax dollars to come home.
