[Watch] Adapting to COVID-19: Impacts on Lower-Income Communities and Organizations Serving Them in 2022


Fed Communities Staff

Connecting Communities: February 9, 2023

After almost three years, the economic and health effects of COVID-19 continue to linger for low- and moderate-income communities and communities of color. Organizations serving these communities also continue to feel the strain of COVID-19. There are signs of slow stabilization and recovery. There were lower levels of pandemic-related effects in many segments of the economy relative to 2021. But to promote a true recovery that benefits these communities, it is important to monitor the conditions and needs of the organizations who serve those affected most.

On February 9, 2023, the Federal Reserve Bank of St. Louis held a Connecting Communities webinar to discuss findings from the National COVID-19 Community Impact Survey administered by the Federal Reserve System. The survey tracks the significant impact that the pandemic has had on underserved communities and those who support them. Speakers, who work on the frontlines in distressed communities, also shared how organizations can use this data to advocate for themselves and those that they serve. Watch the video below.


Connecting Communities Adapting to COVID-19: Impacts on Lower-Income Communities and Organizations Serving Them in 2022 (video, 59:41).
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Whitney Felder

Good afternoon, everyone. I’m Whitney Felder, communication specialist at Fed Communities, and I’d like to welcome you to Connecting Communities: Adapting to COVID-19: Impacts on Lower-Income Communities and Organizations Serving Them in 2022. If you are wondering, you did not miss the January Connecting Communities webinar. We did not host one as we wanted to give everyone time to settle in from the holidays. That being said, we are very, very excited to kick off the first webinar of the year. Before we move to the content for today’s event, we’d like to share just a few housekeeping items.

Today’s session is being recorded and will later be available for viewing.

Views expressed during this session are those of speakers and are intended for informational purposes. They do not necessarily represent the views of Fed Communities or the Federal Reserve System.

Microphones have been muted. Please use the Q&A feature throughout the session to submit your questions. We promise to get to as many as possible during the Q&A portion of this presentation.

Also, throughout today’s event, you will see periodic polling questions. We encourage you to answer those polling questions as they will help provide insight as we move through today’s discussion. Finally, feel free to keep the conversation going and engage with us on Twitter using the hashtag #ConnectingCommunities, and visit fedcommunities.org for a variety of CD articles, resources, and data across the Federal Reserve System.

Before turning the program over to Nishesh Chalise, our moderator for today and manager of the Institute for Economic Equity at the Federal Reserve Bank of St. Louis, I’d like to take a quick second to recognize all of the work he and his team have done to produce this COVID-19 economic impact report and survey. Since mid-2020, the System’s community development function has collaborated with eight national partners on the COVID-19 Community Impact Survey to gather insights into how economic disruptions caused by COVID-19 continue to impact both lower-income communities across the nation and the entities serving them. So now, I will turn it over to Nishesh, who can provide more insight on this topic. Thank you.

Nishesh Chalise

Thank you, Whitney, and thank you to the entire Fed Communities team and the Center for Learning and Innovation for getting this event together. We truly appreciate all the effort and work that you’ve put into it. It’s a heavy lift. So as Whitney mentioned, we are organizing this webinar, this event around our findings based on the COVID-19 Community Impact Survey. And the goal of the survey has always been to understand the disruptions by COVID-19 in low- to moderate-income communities and also to understand how these communities are recovering from the impact.

This was implemented by the community development function within the Federal Reserve System, so all the 12 Banks, the Board of Governors, and we even had external partners. So this was truly a collaborative effort, and thank you to everyone who has helped out. This survey was opened last August and it resulted in a little bit over 1,700 responses, so thank you to the respondents also in helping us gather intelligence on what is happening with our communities. The full report, which was published back in December, is available at the Fed Communities website. But for this event, I will kind of bring, share light on some of the emerging topics that we are seeing in this survey.

So in the next slide, let’s first look at who was it that responded to the survey. As I said, our goal was to survey organizations that are serving low- to moderate-income communities, so we have a broad range of organizations from government to private industry, financial institutions, nonprofit organizations. But as you can see, majority of them, almost 70%, were nonprofit organizations, and these organizations serve in various sectors and issues, including housing, workforce, small businesses, education, and so forth.

So in the next survey, we don’t always get to… Sorry, in the next slide, we don’t always get to do this, but we can start this one with some good news. And the good news is that, and you might have seen this in news and overall indicators of the economy, that there has been a lot of improvement. And in this survey, for many of these areas that we asked questions on, household financial stability, small business, access to healthcare, we see that disruptions have decreased significantly compared to last year. So we would ask respondents in 2021, describe the disruptions based from COVID-19 and then, again, during the survey period, so August, what was the disruption like. So this is the difference. So no matter which area you look in, we see that there is reduced disruption. Even for organizations who are serving these communities, the disruptions decreased by 61%.

So we see a lot of these signs of improvement, but the work is not done, as many of you might know. So in the next slide, these are some list of themes or topic areas that we consistently see throughout the survey. The first one is increasing prices of goods and services. Now, you might be experiencing this yourself, I know. My family is also experiencing this ourselves, but increasing prices of goods and services throughout the survey was highlighted as a major challenge. So this is a challenge for small businesses. This is a challenge for families trying to balance their budget. This is also a challenge for nonprofit organizations who are responding to our survey, who are seeing an increase in expenses, their operational expense.

Another thing we saw was a concern around expiration of government relief. And as we know, there has been tremendous amount of government relief and recovery aid that has helped families, communities, organizations. And so, we are seeing some concern from organizations, that expiration of these reliefs, what this might bring in the near future. And especially for organizations who have seen challenges with revenue from a lot of other sources, government relief has consistently, over the past two years, been really a boon for their financial health. Without that, many or many more organizations would have perhaps struggled.

Another one, and this is not surprising at all, we have done a lot of work around access to childcare. This was a challenge for everybody, from folks who are trying to run schools, folks who are trying to run small businesses, even nonprofit organizations having a hard time recruiting staff. I mean, for employment, lack of childcare was one of the biggest reasons that people saw, that communities were having a challenge with employment, and lack of childcare was that structural barrier that was keeping people from getting to jobs or maintaining jobs.

Finally, again, this we see for small businesses, but as well as for the nonprofit organizations. Staff shortages, recruiting staff, maintaining staff was a consistent challenge. And if you don’t have staff, you cannot do the work that you need to do. So that staff shortages continued to be a big source of disruption. And so, in the next few slides, I will point out some of the other things that we are seeing, and how we have organized this webinar is, we have invited speakers who can talk very specifically to some of these challenges.

So now, in an earlier list, I talked about how things were looking good for many of these sectors, financial stability, small business, but one sector that has not improved in terms of disruptions is housing stability. You can see there is four percentage points decreased from ’21 to ’22, but compared to others, this sector is not moving at all, and we know that COVID-19 just exasperated the challenges in this sector and this is not a new story unfolding. To talk a bit more about this, we have invited Graciela Kahn, who is the Director of Business Intelligence, Corporate Strategy, and Impact at NeighborWorks America. She will provide her perspective on the sector and the important role played by NeighborWorks.

Another key challenge that we saw around mental health on the next slide was, we asked this question about, what are the disruptions to access to healthcare? And we did not expect lack of probably our own naivety, but lack of access to mental health services really was one of the top sources of disruption in low- to moderate-income communities. And so, we have invited Dawn Brown, who is the Director of Cross-Cultural Innovation and Engagement Task Force at National Association for Mental Illness. She will talk about her work at NAMI, that’s the short form, especially as it pertains to mental health among lower-income communities and other vulnerable communities.

And then finally, in the next slide there, we point out what is happening with community-based organizations or the organizations we surveyed, and about a little bit over a third of organizations say that they are well-prepared for to face disruptions in the next year. And so, think about the community that you live in, community that you serve. How would you feel if only a little bit over a third of the organizations said they are well-prepared to face disruptions next year? So we do see this as a challenge because these organizations are crucial for relief, recovery, resilience in our communities.

So to share a bit more light on that topic, we have invited Kevin Dean, who is the CEO of Momentum Nonprofit Partners, and he’ll provide a snapshot of how the sector is doing and what we can expect in the coming year. I’m going to pass the mic soon to Graciela. And once the presenters have finished their presentations, we will get to the Q&A part of the webinar. So please send your questions in the chat and we will make sure, we’ll try to get those questions during our conversation and keep the dialogue going. Thank you so much. And Graciela, the floor is all yours.

Graciela Kahn

Thank you, Nishesh. Thanks for having me. My name is Graciela Kahn. I’m happy to be here to speak a little bit about the work that we do at NeighborWorks America. Yeah. So my title there is Director of Business Intelligence, and if we can go to the next slide, please. So a little bit about our work. We, NeighborWorks America, is a congressionally-chartered nonprofit that supports a network of over 245 affordable housing and community development organizations that are located and serve all 50 states, Washington, DC, and Puerto Rico.

We grant funding from Congress to these local organizations, and we do so mostly in the form of unrestricted funds. And our network is as diverse as the communities that they serve. The lines of business you see on these slides just represent some of the kinds of work that the network is engaged in. On the next slide, I’ll speak a little bit about the investment the network does in their communities. And so, you can see, for the latest year, fiscal year 2022, the network invested almost $11 billion in their communities. Our appropriation as NeighborWorks America is $166 million, which means that for every dollar that Congress gives to NeighborWorks America, our network is able to leverage $65.

And so, you’ll see also in these slides, and I just wanted to mention, in 2021, you see a large increase in commercial lending investment. And so, I just wanted to mention that this is driven by one of our network organizations that was involved in PPP lending and did a lot of lending in 2021. So that’s what you’re seeing there. On the next slide, I’ll speak a little bit about the impact of COVID in the network and also in their response to their communities. And so, the first thing that I want to highlight is that the network really responded directly to their communities’ most basic needs.

So before the pandemic, not as many organizations were involved in food insecurity services, but during the pandemic, we saw them, just in the first year, provide over half a million services to people related to food and basic necessities. Also, nine in 10 network organizations did outreach to inform communities about their rights and protections available to them to keep their housing, like the eviction moratoria and other programs for renters and homeowners.

Something very significant for the network and for many nonprofit organizations was PPP lending. And so, this program really helped stabilize organizations. 91% of our network applied for these forgivable loans, and 99% of those got approved for about 137 or $138 million in PPP lending directly to the network. So they were responding directly to their community needs. They were stabilized by government funding, but it is also important to recognize that not every organization was affected in the same ways.

And so, something that we found on our COVID survey is, a year after this crisis started, organizations serving communities of color were more likely to say that they were struggling financially, that they were able to operate under six months, or six months or under, under the current conditions, and they were also more likely to report that their constituents saw increased need for these food and basic necessity related services. And so, the network really did something to expand its capacity and respond to its needs, and I’ll detail it a little bit in the next slide.

The network, at the beginning, we were concerned about them being able to keep staff because the economic conditions were rough, but then we saw that trend reverse. And by the end of the first year, we actually saw that the staff, the workforce in our network increased, and that has remained true through 2022. I have a little bit of an update here on this data that I received last week. So as of 2022, the network has increased by 12%, the staff. And this increase, even though over half of organizations saw increases in their staff both in ’21 and ’22 and the median size of an organization grew from 28 to 29 and then to 30 full-time-equivalent staff in fiscal year ’22, this did not happen across the board.

We saw growth in homeownership preservation and lending and portfolio management, but decline in other lines of business such as community building and engagement and homeownership promotion, which kind of reflects the demand also from the public, as affordability, like we’ll see on the next slide, is decreasing. Demand for homeownership services is decreasing as well. And so, just to go a little bit into what we’re seeing, we all have heard about the affordability crisis, and this is not new. It’s not new for the pandemic and it’s not news, but we wanted to share about what’s happening for the clients in our network specifically.

And so, since fiscal year 2019, the total cost for new homeownership in the NeighborWorks network has increased by 33%. This has an impact in the ability to serve low- to medium-income clients. And so, even though the network still serves a majority of clients under 80% AMI, that was 53% in fiscal year 2022, this is down. This share is down from 64% in fiscal year 2013. And so, it is really having an effect. And in these organizations, one of the tools that they use to help home buyers get their first home or buy a home is gap financing, and gap financing means that they might do a special loan or a grant to cover closing costs or down payments, because we know that that is one of the biggest barriers to homeownership, is just saving enough money.

You might have enough money to pay your mortgage. It might be the same or even less than your current rent, but you don’t have money for that initial down payment. And so, this is what gap financing does. And we’ve seen that gap financing has increased since 2019. However, it hasn’t increased at the same pace as home prices and total costs. And so, this means that it just represents a smaller portion of the total cost of buying a home. And that being said, I wanted to mention, most of these clients, about two in three clients receive this type of assistance when they are supported by our network.

And so, finally wanted to share a little bit in the next slide about another program that NeighborWorks is working on. This is a program that actually goes beyond our network, and other organizations outside our network are also eligible to receive funding through this program, and this program is the Housing Stability Counseling Program, which is through the American Rescue Plan Act of 2021. You’ll receive this slide deck and you can click on those things. But Congress charged NeighborWorks with designing and administering a $100 million housing counseling program that provides grants to support housing counseling for households facing housing instability, such as eviction, default, foreclosure, loss of income, or homelessness.

So this program is both for renters and for homeowners, and the grants are not limited to NeighborWorks organizations. In fact, there’s a limitation of how much funding NeighborWorks organizations can receive from these grants. So other organizations that are eligible are HUD-approved intermediaries and state housing finance agencies. Of these $100 million, 88.5 million are available for grants. And in the next slide, I have a little bit about some of the results that we’ve seen so far.

So this data is as of mid-January or so. The organizations have counseled over 42,000 clients. 48% of those clients are homeowners, so half homeowners, half are renters. 82% of those clients are low-income, and 67% are people of color. And so, this is a program that is helping people stay in their homes right now, but also look at the longer-term aspect of housing and hopefully helping people stay in their homes for longer. And so, with that, I’ll end my contributions and pass it on to Dawn Brown from the National Alliance on Mental Illness. Thank you.

Dawn L. Brown

Thank you, Graciela, and it’s a pleasure to be here. We are so excited just as an organization because we are really thinking about how do we reach underserved and under-resourced and underrepresented communities with intention. And for those of you who don’t know, NAMI is the largest grassroots agency in the country. We have 650 affiliates in 49 states. And we are an organization of peers committed to working from a place of wisdom and cultural insight to achieve mental health equity for all, and the COVID-19 pandemic has impacted us significantly.

And we really tend to stand on… There’s a quote by Angela Davis that says, “The process of empowerment cannot be simplistically defined in accordance with our own particular class interest. We must lift as we climb.” And that’s really what our intention is, is lifting as we climb. We know that the pandemic has hit our communities really, really hard. Anxiety increased to 50%, depression to 44% by 2020. And we know that persistent feelings of sadness or hopelessness in teens rose from 26% in 2009 to 37% in 2019 and 44% in 2021, and that ER visits for suicide attempts in the US rose 51% for adolescent girls in early 2021 compared to that same period in 2019. Very, very different, and the figure rose 4% for boys.

So one of the things that we think about when we think about our education programs, NAMI has a series of free services and free education programs, family-to-family, peer-to-peer. We have connections and we have support groups. We have Homefront for our veterans. And we are really about intentional work in the community and making sure that our services are accessible for all, but one of the things that we really did realize is that underserved communities were not accessing our services as we would like.

So we started doing something about it. We took a poll. We took a survey. We started looking into what are ways that we can improve this resource. I mean, this service. And so, we started creating initiatives that target specifically the Black and brown communities. We developed a Sharing Hope Community Conversation series, and what we do is we go into the community and we try to hold conversations that really are rooted in ancestral and community wisdom in spiritual wellness. And we’ve really tried to be very, very intentional about how we create these community conversations, they come in a series of three, and how we engage with them.

And what we have found is that when we started this in 2021, we started with a pilot of 14, and we are now at 64 sites that are engaging in the community. And we realize that this is something that isn’t just in the community, that it’s fanning out beyond what we thought we would be able to achieve, because what we know is that communities that don’t trust us, we need to do our due diligence to build the trust. And so, that’s really what we are doing with these community conversations. We are building trust. We’ve developed a video series that prompts folks to talk about mental and physical well-being. We invite a therapist in in the second conversation to facilitate discussions around demystifying care navigation, what it means.

And then the third conversation is really a practical strategy session on physical and mental coping strategies that will help folks move through this process of wellness. How do they tap in folks on their team? How do they develop a mental fitness plan or care action plan? What does that mean, and what does that look like? And although we started in the community, we haven’t stayed in the community. This is an initiative that really has started to spread out across different industries.

So we are now doing the same opportunity of conversation with what we call our FaithNet initiative, which is educating pastors and faith leaders on signs and symptoms, where their role ends and where a clinician’s role begins, and how do we start to educate and get in touch with those faith communities to talk to their congregants, their members, to be able to provide them with the resource that is necessary? And just last year, we held a Pathways to Hope conference, which brings together our NSONAs and our national office and the community and partners together to kind of look at how do you build community around care navigation for individuals who have a mental health diagnosis and folks like me who love them, and what does that look like?

So we created an advisory committee. We are incorporating Sharing Hope and Compartiendo Esperanza. And just so you know, our Sharing Hope series is very intentional. It is specifically for, by, and about the Black African ancestry community, the Hispanic/Latin American community, the Filipino community, the South Asian community, Alaska Native, American Indian. And we have really been intentional that it’s for, by, and about the individuals leading these talks represent the community. The therapists, the clinicians should also represent the community, so that when people show up, they see themselves represented and reflected back in the language that gets used and utilized, is representative of that community as well.

So as we partner with faith leaders and the community members, we also are aware that when we start thinking about the Sharing Hope series, that we should also introduce this notion for our BIPOC males. And so, we have a BIPOC male mental health initiative. And next week, actually, on the 16th, we’re partnering in Los Angeles with the Children’s Institute, the L.A. Rams, to hold a whole session specifically designed for Black and brown men. Hispanic and Latino men are coming together to talk about their mental health, about fatherhood, and about ways that they can increase and improve their health and wellness and get connected to services early.

NAMI is very focused on getting connected to services early so we can get the best possible care. So we are not only looking at faith communities. We’re not only looking at getting into the community through our NSONAs, our 650 NSONAs, to try to figure out how do we start having these conversations. We’re also developing strategic partnerships. So we’ve partnered with Delta Sigma Theta Sorority, which is a distinguished African American sorority, and we are now going to touch 300,000 college-educated women. We’ll be on 400 college campuses, including 109 HBCU campuses. But we also realize that that’s also not enough to be on college campuses. We want to be everywhere where people are talking about mental health and wellness.

So we are partnering with companies like Disney, Kohl’s, ESPN, Nat Geo, Miraval Resorts, Seattle Children’s to be able to talk about, how do we bring in mental health in the workplace? How do we start to support our staff? We started a conversation at Yale University about a year ago with just those three conversations, and we’ve been able to give supportive sessions for the past six times, and we just want to continue to reach out to communities to be able to say, “This is what’s needed. We are here to help you, and we want to make sure that we are meeting the needs of the community and meeting them where they are.”

And oftentimes, we have these wonderful materials that we create, but what we realize is that the community doesn’t get access to them. So we are in barbershops. We’re in beauty salons. We are educating folks who are cutting hair, who are trimming nails. We want to make sure that when people go into places and spaces, where they live, where they work, where they worship, and where they learn, that they are having access to communities and individuals who are trained and equipped. So we’re partnering with folks like the APA, the APAF. We are partnering with AFSP.

We are trying to make sure that we are very intentional in creating material that is designed for, by, and about the community, that it is not just… We’re not writing just to them, but we want to make sure it is for the community as well. So when we start thinking about how do we partner with these colleges and universities, we want to create intentional information for these college students. When we are partnering across these industries, we want to make sure that we are creating spaces for ERG groups to be able to come together, and the affinity groups to talk about wellness in the workplace. What does that look like? How does that impact their mental health?

So we aren’t just confined to the community because we show up everywhere. We go into the church. We bring our church into our work. We bring work home. We shouldn’t, but sometimes we do. And so, it is a holistic approach to making sure that we are able to meet the community where they are. And I think one of the things that we are really, really intentional about right now is creating culturally-centered marketing material to make sure that we are developing wellness kits with culturally-centric health and wellness information, local quality resources, that we are doing town halls and community conversations, that we are meeting with our pastors and faith leaders that are out in the community doing the work and providing them with the tools and the resources to support their needs.

So NAMI is really creating a bit of a shift these days, because where we were just focused on making sure that we were intentional to connect with all communities. We really realized that we need to go into each community and find out from them what their needs are and then create very intentional approaches and material and content that meets their specific needs. So we hope that you join us in this effort and in this fight to destigmatize mental health in Black and brown spaces and BIPOC spaces, and that we are able to move collectively to be able to ensure that we can get people help early and get them the best possible care. So I thank you for this opportunity. I look forward to talking with you more broadly during Q&A, and I’m going to turn this session over to Kevin Dean. Thank you so much for your time.

Kevin Dean

Well, hello, everybody. Thanks for having me. My name is Kevin Dean. I’m the CEO of Momentum Nonprofit Partners, and we’re the regional nonprofit association in and around Memphis, Tennessee. We work with about 950 nonprofits. We represent them at the state legislature, federally in D.C., and then also locally. We do a lot of training and technical assistance, but we also do a lot of resourcing as well as research.

So I’m going to talk about what we saw on the ground in Memphis with nonprofits, what their struggles were, but I want to start nationally and talk a little bit about how the nonprofit sector is a key driver of the economic engine. I think we often forget that the nonprofit sector is huge in the United States, and collectively they employ 12.3 million individuals, and they’re also spending about $826 billion on salaries, benefits, payroll taxes each year, making it the third-largest employer in the United States economy. That’s no small number. So if the nonprofit sector fails, it would have a devastating consequence on our national economy.

In the next slide, we’ll talk about what happened nationally, and this is from Charity Navigator. So over 50% of nonprofits saw an increase in demand for programs and services. As you can imagine, people who were already marginalized, who were already on the periphery, it made it even harder for them to survive this pandemic, and not just because of COVID, because of the supply chain issues that were happening, the demand for services. People were waiting longer for those specific services. And 64% of nonprofits… Even though the demand was increasing, 64% of them actually had to cut back on programs, and 83% of them, of nonprofits, reported that they suffered financially.

Even though nonprofits were able to access things like PPP loans, they were still losing a lot of money hand over fist, so cutting back those programs was important. Also, a lot of them had to reduce staff. In the next slide, I’ll talk a little bit more about what we saw locally in Memphis. We did a study about a year into COVID in partnership with the University of Memphis. We found that 62% of our organizations saw an increase in demand for services. However, a little over 68% saw a decrease in revenue since the pandemic began.

So you have this increase in need, a loss of revenues. Sorry, I lost my notes here. What we found, we did an initial study three months into the pandemic. I think that was about April or May. We surveyed our 950 nonprofits, and they reported that in just three months of the first part of the pandemic, they lost $32 million in earned revenue and lost earned revenue from events. And that’s not all 950 nonprofits reported that, or were included in that study. Not everybody responded. So that was just the people that responded, which was about 250 nonprofits reported that.

So if you can imagine, $32 million lost. That’s a lot of jobs. That’s a lot of programs. That’s a lot of things going into the community. There were also a lot of supply chain issues at play. One thing that we found, the nonprofit associations… So everybody was looking to us to give them all the answers, which we were looking for the answers too, but we luckily had access to the resources people were looking for. Masks were an issue. So it was very hard to perform the services during the pandemic without masks. A lot of the social services and programs that are provided really require a one-on-one, in-person relationship with clients. So you have to have masks, especially before the vaccine was available.

And so, we were able to actually convince the Shelby County government to spend some of their CARES Act money to buy masks for nonprofits. They were working with some of the most vulnerable populations in Memphis. So we gave out 3.5 million masks using CARES Act money because of that. And in addition to the supply chain issues, the workplace shortages, we also saw a lot of policy issues at play. So in many cases, nationally, locally, statewide, we saw nonprofits not being invited to the table, even though they were on the front lines of this pandemic helping the most needy people in the United States. They weren’t invited to the table to give feedback, to help with the planning process.

And so, the National Council of Nonprofits, they saw a need and they made sure that nonprofits were included in those PPP loans, which was not originally in the original legislation. Without those, you would’ve seen a lot more nonprofits closing their doors, a lot more nonprofits not being able to even serve who they were already serving. So those were really, really important. On a state level, we found that our governor created an economic recovery group to really think through the reopening process for the State of Tennessee. Nonprofits, again, weren’t invited to the table, so we had to lead a campaign.

We had thousands of nonprofits emailing the governor, the governor’s chief of staff, and luckily they still talked to us after that. I actually met with them last week. But they created a nonprofit subcommittee so that we could give recommendations to the governor on the reopening process. From that, we were able to convince them to use leftover CARES Act money for nonprofits. And so, we got $150 million from the State of Tennessee for nonprofits through their CARES Act community fund, which was probably a lifesaver for a lot of nonprofits and the people that they were serving.

In the next slide, I do want to talk about, there were some issues with what was happening. So a lot of smaller grassroots organizations, when they were trying to get the PPP loans, when those became available, we were not getting all of the information from the SBA. The legislation was happening, so we were getting everything piecemeal, as were the banks. But also, people were trying to get in touch with their bankers. If you have a larger amount of money in a bank, the bankers are most likely going to call you first.

So we saw a lot of smaller grassroots organizations, specifically BIPOC-led organizations, that were not getting calls back from their bankers, didn’t even know who to call, didn’t know how to access this information, and the information was kind of all over the place. We were trying to be a one-stop shop, but even that was hard for us. I don’t have a banking background. My staff didn’t have a banking background, but what we had to do was basically stop everything and start calling banks and try to find banks that would actually work with small nonprofits. They would call them back.

We had a lot of nonprofits in Memphis that changed banks because they realized their banks weren’t going to call them back, or were not helpful in accessing those PPP loans. And if you look, there’s a big disparity between Black-led organizations and white-led organizations. Black-led organizations are far less likely to have reserves or investments. They also are much less likely to have endowments than white-led organizations. So what does that mean in this context? You have nonprofits, who are taking this huge loss because they’re losing revenue, they’re losing donors during COVID, that don’t have the reserves that other organizations do.

So those PPP loans were even more important for these groups who didn’t have the reserves built up to support them through the pandemic. So that was even more problematic, because a lot of these smaller grassroots organizations, even though they don’t have the brand awareness or the name recognition of some of the bigger organizations that you know, they are embedded in communities. They have access to communities that bigger nonprofits maybe don’t have access to, that government entities don’t have access to. They were some of the most important people on the ground during the pandemic.

We did a survey later and found out that we helped nonprofits at Momentum. We helped nonprofits in the Memphis area access $36 million in additional PPP loans that they would not have been able to access had we not been calling the banks, giving them the information of the how-to instructions of how to access these and what to do. So we’re really, really happy about that. But also, we know that in the event of another disaster or another worldwide pandemic, these are the things that we’re going to have to be on top of in the future.

So nonprofits are making a comeback. We’re all having to rethink how we fundraise now. Special events are hit-or-miss now, because people are still a little bit nervous about going to in-person events. So we’re still seeing the effects of COVID, and there is a huge workforce shortage. That research that Nishesh was talking about is absolutely applicable in the nonprofit sector right now, which means, if you don’t have people providing the services to those communities, you have less people that are able to receive those services. So with that, I’ll turn it back over to Nishesh for the Q&A.

Nishesh Chalise

Thank you, Kevin. Inviting Graciela and Dawn to turn their videos on. Thank you. Thank you, everyone, for your presentations. I just always learn a lot when I hear you speak. So we have about, let’s say, 10 minutes to have further conversations. To begin with, Graciela, I know you shared a lot about the work that NeighborWorks does. Just thinking about housing stability for our audience, what do you think are some key takeaways that you would want our audience members to remember as they go into their work, into their communities with their families?

Graciela Kahn

Absolutely. Thank you, Nishesh. I mean, I think my main takeaway, and I kind of heard that echoed in Dawn’s and Kevin’s presentation, is connecting, really, with the community that you’re serving. Right? And so, we’ve had all of these big government programs that have really helped stabilize organizations and people in the communities, but it has been also kind of a trial and error in terms of implementation. Right?

So learning and hearing about the communities and what they need, what they are prioritizing for themselves, and also hearing from staff and inviting nonprofits, who are the experts who are on the ground, listening to their own communities, and letting that knowledge trickle up is my main takeaway from all that we’ve been learning at NeighborWorks.

Nishesh Chalise

Thank you. Dawn, I really appreciated hearing you about mental illness and the work that you do. But as the Federal Reserve System, we don’t talk about mental health as much when we think about participating in the economy, deriving the benefits from the economy, and you were getting to those aspects, some of those aspects, when you were talking about going into colleges and some of the workplaces.

From your point of view, how should people think about the connection between mental health and people participating in the economy, whether that is starting a small business, getting a job, sustaining at a job, getting into a career? How do you want people to think about that particular link?

Dawn L. Brown

Well, thank you for that question. I think, well, mental health is physical health. And so, when we’re facing housing instability, when we’re facing financial crisis, when we just are financially unstable, I think that impacts people’s wellness and well-being. It impacts their mental health. And the financial component, too, impacts their ability to get care and seek care and be able to get consistent care.

So what we’re trying to do is create systems of connection to remove some of those barriers so that individuals are able to get connected to resources earlier that they’re able to get connected to supportive services for care navigation, but I think finances impact so much of our just mental health and well-being, for sure.

Nishesh Chalise

Thank you, Dawn. Kevin, appreciate the light on the nonprofit sector. And I think we’ve all experienced COVID-19, but nonprofit probably has had a unique experience of the pandemic, where they are themselves being affected and yet have to provide services, more services. In your experience, in this whole experience in the past two and a half years, what do you think are some trends that have emerged that you see affecting the sustainability of nonprofit organizations moving forward? And this could be both from a positive or a negative point of view.

Kevin Dean

Well, the Great Resignation is affecting the nonprofit sector just like it’s affecting everybody else. And so, people are shifting jobs right now. There’s a lot of movement. We did a study. Our State of the Sector came out right before COVID-19, and in that, 50% of our executive directors said that they were leaving between three to five years. That was before COVID. That was before the nightmare that has happened and the fundraising challenges and all these challenges that people have faced.

So we have this upcoming leadership gap, where we really need to prepare our upcoming leaders to take the reins because we have a lot of executive directors who are aging out. And oftentimes, they unintentionally take that money with them, because they’ve built these relationships with donors. So this workforce shortage and this Great Resignation is definitely having an effect. Also, the way that people fundraise, we rely very heavily on individual donors. Accessing those donors is becoming harder and harder. Social media is changing very quickly. It’s much harder to fundraise on Instagram than it was on Facebook. Facebook isn’t what it used to be. I’ve been told by people under 20 that Facebook’s not cool anymore, that Instagram’s the way to go or Snapchat or all that.

Twitter is sort of falling apart, then the post office situation. Sending those annual fund letters is more difficult. I just read a report the other day that there has been a consistent increase in giving in the United States, but that’s coming from far fewer sources. So these individual donors are not showing up at the table in record numbers. You just have a lot more wealth that is concentrated that is giving out that money, which makes it much harder to access for a nonprofit.

So between the fundraising challenges that we’re facing, we’re trying to figure that out, and the workforce and the leadership transitions, I think nonprofits are… You’re going to see a lot of innovation, which is exciting because we’re going to have to innovate. Otherwise, we’re going to fail. But also, you’re going to see a lot of people trying not to burn out. You’re going to see those mental health issues that Dawn was talking about showing up in unexpected places, which it did during COVID, and I think it’s going to continue after COVID.

Nishesh Chalise

Thank you, all. I’m just here monitoring some of the questions from our audience members. One of the topics that… Childcare is a really important topic. Last year, when we did this event, we invited a childcare provider to talk about this. We do all the research. I know this is not your particular topic, but in terms of, as you are thinking about nonprofits, childcare is still an issue because that impacts who you can hire. As you are thinking about mental health, that is also still an issue.

So I just want to throw you off and ask you about a topic area that you were not perhaps experts in, and just ask about, what do you think the role of childcare or how lack of childcare is impacting communities, in the communities you’ve served or in the communities you have lived, or you live?

Graciela Kahn

Well, I’ll go just to say that a lot of our network organizations do recognize this need. And I did not come prepared with the numbers specifically on childcare, but we do know that some organizations have provided… They manage rental buildings and maybe provide this type of service to their tenants as well because, of course, it’s related to the ability of people to get back to work, to have an income and be stably healthy, be able to pay their bills on time, and all of these, in addition to all of the benefits it has for children as well. So it is part, and we do consider it part of this community development aspect of our work.

Kevin Dean

Oh, I see a question in the chat about remote work, and I think childcare and remote work and all of this is, it’s all important, because with your clients, it’s so important for us in the nonprofit sector, especially with safety net organizations and social services, to be able to meet people where they are and that it’s even more difficult now than it was. And from an equity standpoint, we can’t rely too much on Zoom either when we’re meeting our clients where they are. Some people don’t have access to internet. Some people don’t have a laptop. Some people don’t know how to use Zoom.

So when you’re talking about childcare, I think it’s important that we don’t lose sight of the fact that we still need to meet people where they are in their communities. And people with children, it makes it even more complicated for them to reach you, your staff as well. I think now that people are getting used to remote work and hybrid work, it’s going to be very hard to take that away, because people have had to readjust their lives and their families with this. So I know that my staff is in three days a week. They’re out two days a week remotely. I know I’m never going to be able to take that away, ever. They will revolt. So I know that this is going to be a trend that will continue long-term.

Dawn L. Brown

I agree. I think it’s changed. This remote work has really changed how we do business, honestly, and I think it has made it difficult. I mean, if you think about just from a mental health perspective, for parents, for those folks who have small children who are trying to navigate work and become the snack person and the PE teacher and the science teacher and all the things that we relied on our teachers, our educators to do, folks are really having to do it in-house, and it doesn’t always work well. If you have small children, they don’t want you to be their teacher.

And so, it is difficult, and they interrupt. So there are all these different nuances. People are more isolated. There was a pastor who said, “I used to go to work to be able to get some peace and some relief, as quiet as it’s kept. But now with COVID, I just go down the hallway and my children just come knock on the door. And so, I didn’t realize it was impacting my mental health because I was away from the house and I come home and I have this transition.” So we never really get out of that state of trauma, right?

We have this transition where you unpack your day on your way home from work, and you don’t necessarily get a chance to do that now. You might unpack it on the way down the hallway, but it’s very, very different, and that has had a tremendous impact on how people have engaged in their relationships, how it’s impacted people’s mental health as well, especially children who have been isolated for a really, really long time.

Nishesh Chalise

Well, thank you, all. This has been wonderful. Hoping to continue this conversation and continue this connection, but for today, I’m going to pass it back to Whitney.

Whitney Felder

Thank you to our speakers for providing insightful information and engaging our audience. And attendees, thank you for spending your valuable afternoons with us today. We appreciate it. But before the session is over, we do have just a couple quick requests. Please complete the survey that will be sent to you immediately after the event so we can improve and continue to bring you timely and relevant topics.

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