In New York, the nonprofit sector is not a niche corner of the economy—it is one of its pillars. More than 1.4 million people statewide work for nonprofit organizations, a workforce that exceeds construction, manufacturing, finance, and retail. “It’s a very important element of the economy,” says Gary Schuster, partner at J&G Law, LLP and a longtime advisor to businesses and nonprofits in the Hudson Valley. “That’s leverage. Those are numbers politicians respect.”
Schuster has served on the board of the New York Council of Nonprofits (NYCON) since 2013. NYCON, he explains, has long described itself as both the “toolbox and soapbox” of the sector—offering technical guidance on governance and operations while also advocating at the state level for policies that support nonprofit sustainability. The organization played a key role in the substantial 2013–2014 amendments to New York’s Not-for-Profit Corporation Law, which tightened governance, financial oversight, and accountability standards in the wake of widespread fraud uncovered after 9/11-era fundraising campaigns.
“Rules tightened up very substantially,” Schuster says. “You have to do your tax return. You have to have minutes. You need a conflict-of-interest policy. The environment today is much more regulated and policed than it was 30 years ago.” For well-intentioned founders, that shift can be sobering. “My first response when someone calls and says, ‘I want to start a nonprofit,’ is often, ‘No you don’t—let’s think about this.’ It’s a job. It’s a business.”
The newly released NYCON State of the Sector 2026 report underscores why careful planning matters. Sixty percent of nonprofits report concern about funding basic operations. Thirty percent ended the year in deficit. Twenty-two percent anticipate reducing services. At the same time, organizations continue to grapple with delayed state contract payments—an issue known as “prompt payment”—that can strain already thin cash flow. The legislature passed a reform bill in 2025 aimed at speeding up payments, but it was vetoed, leaving uncertainty in its wake.
Against that backdrop, Schuster sees consolidation and collaboration increasing. “Funders don’t want seven struggling organizations doing the same thing. They’d rather see three healthy ones,” he notes. For emerging initiatives, he often recommends fiscal sponsorship as an alternative to forming a standalone entity. Under that model, a project operates under the umbrella of an existing nonprofit, avoiding the administrative burdens of incorporation, board formation, insurance, tax filings, and eventual dissolution. “It can be an incubator,” he says. “See if it works for two or three years before you take on the full structure.”
Governance remains a persistent challenge, particularly in recruiting capable board members. Directors owe duties of care, loyalty, and obedience—responsibilities that require time, attention, and the ability to put organizational interests above personal ones. “Not everybody is built for nonprofit board work,” Schuster observes.
At the same time, he urges nonprofit leaders to recognize their collective influence. The NYCON report details the number of nonprofits and employees in each congressional district—data that can be powerful in advocacy conversations. “There’s a misconception that nonprofits can’t engage in political activity,” he says. “That’s true up to a point—but there’s a lot they can do, and they should understand those limits better.”
For Schuster, the nonprofit sector ultimately fills the gaps between government and the private market—subsidizing essential services, supporting vulnerable populations, and strengthening communities. “It’s how we help people who can’t help themselves,” he says. “It makes for a better society.”
J&G Law, LLP
(845) 764-9656; www.jglaw.law
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