This Charity Fights Sex Trafficking. Bureaucracy Might Doom It.

Rachel Lloyd was a teenager in the 1990s when she left an abusive home in Portsmouth, in the south of England, and traveled to Munich in the hope of finding work. She had dropped out of school at 13. One night in a pub she met some girls who told her she could make a living just talking to men at bars in strip clubs in Germany. It was not long before she realized that much more was expected of her.

With the help of a church she got away from a life controlled by a violent pimp and eventually moved to New York. Within a year of her arrival in 1997, Ms. Lloyd enrolled at Marymount Manhattan College, where she had been given a full scholarship. At the same time she was doing outreach work on the streets in Hunts Point, in the Bronx, and at Rikers Island, where she hoped to help those in situations that were all too familiar to her. She was meeting 11-year-olds who had been arrested for prostitution, even though they had not reached the age of consent, and she believed that the world, and the legal system in particular, needed a much clearer understanding of sexual exploitation and trafficking.

In response, she founded GEMS (Girls Educational and Mentoring Services) in 1998, an organization designed to provide that illumination but also crucial kinds of support for the victims themselves. Getting food and shelter to survivors was important, obviously, but she wanted to do something more ambitious, to steady their lives long-term and offer professional training to those who worked with them. In recognition of her accomplishments, three years ago, Ms. Lloyd was made a Companion of the Order of St. Michael and St. George during an investiture ceremony at Buckingham Palace, officiated by Prince Charles.

Despite the acclaim, the future of GEMS has been endangered in recent months, not by means of political cruelty or scandal or financial mishandling, the traditional paths to undoing, but rather by the byzantine mechanics of an intractable bureaucracy. Specifically the problem revolves around confounding delays in the process by which the city contracts with various nonprofits, suggesting the ways in which ordinary government inefficiency renders even more pain on the most vulnerable.

GEMS has been very successful both at the level of policy and practice, a fact disputed by virtually no one. Fifteen years ago, after much advocacy on the part of herself and others, Ms. Lloyd helped write the draft legislation for the state’s Safe Harbor Act, which recognized that young people taken in by the commercial sex industry were not criminals and required aid rather than prosecution. The law has been copied around the country. In 2022 alone, GEMS was able to provide free housing for 30 young women, and it helped find employment for 40. Others went through job training, took college prep courses or graduated from college. One GEMS alum received her master’s degree.

The problem originates in the way that city money flows to the kind of social-service organizations that so many New Yorkers in need rely upon. GEMS is a relatively small outfit with an annual operating budget of about $3.5 million, some of which is delivered by the state, some by the federal government and some from charitable contributions. For the past four years, the organization has been earmarked for an annual discretionary grant of more than $850,000 from the New York City Council. The money for these kinds of grants is promised at the end of the fiscal year, in June, and theoretically ought to be available shortly after, since the contracted agency is expected to deliver whatever services it has promised right away — shelter, addiction counseling, food to shut-ins and so on, obligations the city often cannot meet on its own.

Over the past several years, though, the schedule has played out very differently. Last year, a group assembled by Mayor Eric Adams and the city comptroller, Brad Lander — called the Joint Task Force to Get Nonprofits Paid On Time — issued a report laying out what had gone wrong. It found that during the 2022 fiscal year, more than 75 percent of the city’s contracts with nonprofits were registered after their start dates and late enough that many were forced to take out loans to remain viable.

So far, GEMS has received none of the grant money it was promised in July of last year — a sum totaling $983,000; it did not get its allocation for the previous fiscal year until September. The consequences have been grave. GEMS owes $17,000 to one landlord from whom it rents housing for the young women it serves, Ms. Lloyd told me.

“Of all the things you can’t mess around with missing payments on, it’s housing,” she said. “We’re telling people, ‘Come in; it’s safe; you have two years; this is a period when you can focus on your mental health and school and work.’ They’ve never had stability before.”

GEMS had also been suffering through another setback which began when a major family foundation reduced its support as its interests turned toward other causes. Ms. Lloyd has spent her own money, maxing out her credit card and once missing a mortgage payment, to fill in the holes. A few weeks ago, a member of her staff lent her money to make payroll.

“The girls get a stipend when they graduate from college, and they have had to wait six months to get it, and that has felt terrible,” she said. “I feel like we have squandered a lot of trust with the girls — and that’s the part that really burns me up.” Some have expressed fear that they will be evicted and wind up back on the street.

It can strain credulity to think that what is standing in the way of preventing such an outcome — the difference between security and re-traumatization — is essentially a better task-management system. It has been taking an average of 300 days for certain contracts to be registered, meaning that charities are getting their funds nearly a year after the fact.

Even as it constantly stresses the importance of equity in all things, the city is left essentially treating so many of the organizations that serve low-income people of color as if those organizations merely amounted to a line of credit. “We would never say to a firehouse or a police precinct ‘do your work’ in May or June and we’ll pay you when we get around to it,’’ Mr. Lander said. “Construction contractors get their contracts signed before doing the work.” The problem was pervasive enough that at a certain point, the city brought in McKinsey to study it.

As it happens, there are still arcane rules governing the distribution of funds to groups like GEMS and money funnels through different city entities rather than a single source. Every contract for more than $10,000 must have a public hearing, even though, as Mr. Lander pointed out, “99 percent of the time no one goes.” The programming tool the city uses to manage the contracting process needs upgrading. The comptroller’s office is trying to implement multiyear rather than annual contracts in certain cases to save time and alleviate repetition.

Ms. Lloyd has tried to imagine a visual and dramatic protest action that could bring attention to what might seem like a dull, ministerial problem but is ultimately more profound. She kept thinking of Nan Goldin and what she did to raise awareness of the Sackler family’s role in the opioid crisis. Four years ago the artist led an effort to drop fake OxyContin prescriptions signed by Richard Sackler into the atrium at the Guggenheim Museum. Maybe, Ms. Lloyd said, she could come up with something like that.