While there are signs of improvement, the COVID-19 pandemic continues to impact communities across the nation. For both communities and the organizations serving them, inflation, labor shortages and the availability of childcare were top challenges. Conducted in August 2022, this national survey of organizations that serve low- to moderate-income (LMI) communities also found signs of recovery. To understand changes relative to 2021, this survey asked respondents to recall conditions in 2021 and also indicate current conditions. Comparisons made throughout the report are not based on previous surveys conducted in 2021.
More than half of respondents expected the communities they serve to be largely recovered from the pandemic’s disruptions in 2023. Although disruptions persisted, there were lower levels of pandemic-related effects in many segments of the economy relative to 2021. However, housing stability has not shown signs of improvement in the past year.
While the percentage of organizations serving LMI communities that reported experiencing disruptions decreased this year relative to 2021, challenges persist. More than 60% of entities reported at least some disruption, including one-third reporting significant disruptions.
Main findings for people and communities served by the respondent’s entity
- Recovery path: Currently, 16% of respondents reported that their communities are almost or fully recovered (80%-100% recovery). In a year’s time, more than 40% expected their communities to be almost or fully recovered (figure 1).
- Fewer experienced disruptions than 2021: Since 2021, the percentage of respondents reporting significant disruptions in their communities fell between 30% and 50% across various aspects of the economy except for housing.
- Household financial stability: Since 2021, 40% fewer respondents reported significant disruptions to household financial stability. However, approximately 40% of respondents still claim that disruptions are significant. Increasing costs for consumer goods and housing were reported as primary reasons (figure 2 and figure 3).
- Small business: Relative to 2021, 45% fewer respondents reported significant disruptions to small businesses. Almost 35% indicated significant disruptions during the current survey period, with labor shortages reported as the primary reason (figure 6 and figure 7).
- Access to health care: Almost 40% fewer respondents reported significant disruptions in access to health care compared with 2021. A quarter reported significant disruptions during the current survey period. Lack of access to mental health services, followed by shortage of health care staff, were reported as primary sources of disruption (figure 8 and figure 9).
- Services for children: Compared with 2021, the number of respondents reporting significant disruptions to services for children halved. However, 30% of respondents continued to report significant disruptions, with staff shortages and lack of available childcare cited as the main reasons (figure 10 and figure 11).
- Housing stability: Almost 50% of respondents continued to face significant disruptions in housing stability, an area that saw little progress over the past year. Insufficient affordable housing and high housing costs were reported as the primary reasons for disruptions (figure 12 and figure 13).
- Basic consumer needs: Compared with 2021, the number of respondents reporting significant disruptions in basic consumer needs decreased by almost one-third. Increased cost of food, along with increased cost of household goods and services, were noted as the primary reasons (figure 14 and figure 15).
Main findings for entities represented by the respondents
- Disruption to entities: Compared with 2021, 61% fewer respondents noted significant disruptions to the entities they represent. However, many (65%) still face some disruption. Recruiting staff and volunteers, as well as raising funds, were cited as primary challenges (figure 16 and figure 17).
- Organizational resilience: Almost 90% of respondents said that their entity was able to adapt to some, but not all, disruptions they faced last year. However, only 34% said that they were “well prepared” to face disruptions in the coming year (figure 18 and figure 19).
- Demand for services: Approximately 70% of respondents indicated an increase in demand for their services, with 43% noting a significant increase (figure 22a).
- Ability to meet demand: Forty five percent of entities said they can meet most of their demand. While still below pre-pandemic levels, almost 60% of entities expected to be able to meet most of their demand over the following six to 12 months (figure 21).
- Financial health: Almost 45% of respondents reported being able to operate for more than a year in the current environment before exhibiting financial distress, including reducing services, laying off staff, closing locations or shutting down entirely. However, 30% of respondents reported being able to operate for less than six months in the current environment before exhibiting financial distress (figure 20).
Impact on low- to moderate-income communities
The pandemic has been challenging for LMI communities throughout the country. The survey results indicate that recovery is underway and expected to continue in 2023.
During the survey period, only 16% of the respondents said that the communities they serve were almost or fully recovered, defined as 80% to 100% recovered to pre-pandemic conditions. When asked about a year from the survey period, more than 40% of respondents expected their communities to be almost or fully recovered. The shift in responses, as shown in figure 1, illustrates a more positive outlook that respondents have for their communities in 2023.
Figure 1
Although conditions have improved, the data suggest that communities face ongoing disruptions. The following section highlights how six different components of the economy that are important to the vitality of LMI communities are faring. While reviewing the data provided in this report, please keep the following in mind:
- Comparisons made throughout the report are not based on previous surveys. To understand changes relative to 2021, this survey asked respondents to recall conditions in 2021 and also indicate current conditions.
- The change in percent between the two time periods is calculated as the related change in total responses. The difference does not refer to change in percentage point.
Household financial stability
Survey results showed fewer disruptions than the previous year in household financial stability, which includes income loss, income instability, increasing costs and debt. In the survey, respondents were asked about the average level of disruption in the communities they served in 2021 and 2022.
In August 2022, 41% of respondents indicated significant disruption, a 40% decrease relative to 2021 (68% of respondents indicated significant disruption in 2021). Another 41% reported some disruption (relative to 26% in 2021), and 14% reported either minimal or no disruption (4% in 2021).
Figure 2
When asked about primary sources of disruption to household financial stability, the top responses were related to inflation, including increases in the price of consumer goods (26%) and increases in housing prices (25%), followed by issues with employment (16%) and the expiration of government relief (16%).
Figure 3
To learn more about employment, the survey also asked, “How challenging is employment for people in the community(ies) your entity serves?” Three fourths reported that it was at least somewhat challenging, with 29% stating that the challenge was significant.
Figure 4
The primary challenge in employment was a lack of childcare, which was indicated by 44% of respondents.
Figure 5
Note: Most responses in the “Other” category were either a combination of options above or left blank.
Small business
Survey results showed less disruption among small businesses than in the previous year. Disruptions included short- or long-term closure, supply chain disruptions and reduced demand. Survey respondents were asked about the average level of disruption in the communities they served in 2021 and 2022.
In August 2022, 34% of respondents indicated significant disruption, a 45% decrease relative to 2021 (62% of respondents indicated significant disruption in 2021). In addition, 46% of respondents reported some disruption (relative to 25% in 2021) and 10% reported either minimal or no disruption (3% in 2021).
Figure 6
Labor shortages (45%) and increases in the price of goods (21%) were noted as primary sources of disruptions for small businesses.
Figure 7
Access to health care
Survey results showed less disruption in accessing health care, which included health insurance and mental health services, than the previous year. Survey respondents were asked about the average level of disruption in the communities they served in 2021 and 2022. In August 2022, 25% of respondents indicated significant disruption, a 39% decrease relative to 2021 (41% of respondents indicated significant disruption in 2021). Another 39% of respondents reported some disruption (relative to 35% in 2021), and 25% reported either minimal or no disruption (13% in 2021).
Figure 8
Lack of access to mental health services (35%), a shortage of health care staff (28%), and lack of access to health insurance (17%) were cited as the primary sources of disruptions.
Figure 9
Services for children
Survey results showed less disruption than in the previous year to services for children, including availability of early childcare and education, access to child welfare services, and access to K-12 education. Survey respondents were asked about the average level of disruption in the communities they served in 2021 and 2022.
In August 2022, 30% of respondents indicated significant disruption, a 53% reduction relative to 2021 (63% of respondents indicated significant disruption in 2021). In addition, 41% of respondents reported some disruption (relative to 22% in 2021) and 18% reported either minimal or no disruption (6% in 2021).
Figure 10
Staff shortages (30%), lack of available childcare (28%) and difficulties with virtual schooling (24%) were noted as the biggest sources of disruptions.
Figure 11
Housing stability
Survey results showed similar levels of disruption relative to previous year for housing stability, which included evictions, back rent, foreclosures and homelessness. Survey respondents were asked about the average level of disruption in the communities they served in 2021 and 2022.
In August 2022, 48% of respondents indicated significant disruption, a 9% decrease relative to 2021 (52% of respondents indicated significant disruption in 2021). Another 31% of respondents reported some disruption (relative to 29% in 2021), and 14% reported either minimal or no disruption (12% in 2021).
Figure 12
There seemed to be persistent challenges in this area, with high housing costs, including rent, mortgage, and utilities (42%), and the lack of availability of affordable housing (42%) cited as two primary reasons. Compared with other areas, lack of progress in housing stability might require further attention as low- to moderate-income communities work toward recovery.
Figure 13
Basic consumer needs
Disruptions to basic consumer needs, which included food, household essentials and other personal needs, lessened compared with previous year. Survey respondents were asked about the average level of disruption in the communities they served in 2021 and 2022.
In August 2022, 35% of respondents indicated significant disruption, a 32% decrease relative to 2021 (51% of respondents indicated significant disruption in 2021). Furthermore, 43% of respondents reported some disruption (relative to 38% in 2021) and 18% reported either minimal or no disruption (8% in 2021).
Figure 14
Inflation seemed to be at the core of challenges in meeting basic consumer needs relative to the availability of goods, with increases in the cost of food (44%), followed by increases in the cost of household goods and services (28%), noted as the primary reasons for disruptions.
Figure 15
Impact on entities serving low- to moderate-income communities
Disruptions also diminished for entities providing services to LMI communities. Significant disruption plunged 61% in the past year, from 50% in 2021 to 19% in 2022. Furthermore, 34% of entities currently face minimal to no disruption.
Figure 16
However, 46% of entities still reported some disruption, with challenges in recruiting volunteers as their top obstacle.
Figure 17
Ongoing disruptions and the ability to adapt
As observed, more than two years since the pandemic started, many communities and the organizations serving them continued to face disruptions. It is crucial that organizations providing basic services to a community (education, housing, health care, etc.) continue to be able to do so during a crisis, especially in LMI communities where households may have limited options for additional resources. Almost 90% of of survey respondents reported that their organizations were able to adapt to some disruptions in the past year, with half sharing that they could adapt to most disruptions. Nevertheless, 12% said they were unable to adapt to disruptions or struggled to do so.
Figure 18
Looking toward the future, one-third of entities claimed that they are well prepared to face additional disruptions in the upcoming year. Another 60% of respondents shared that they are somewhat prepared, and an additional 6% reported that they are unsure or not prepared at all.
Figure 19
Furthermore, while 43% said they could operate for 12 months or more in the current environment, 30% reported that they are able to operate in the current environment for at most 6 months before exhibiting financial distress.
Figure 20
Impacts on ability to provide services
One consequence of ongoing disruptions due to COVID-19 is entities’ ability to provide services to their communities. We asked survey respondents what percentage of demand their entity could meet in 2019, the current survey period, and in the next six to 12 months. At the time of the survey, 32% fewer respondents than pre-pandemic indicated that they were able to meet most of demand (defined as at least three-fourths of demand).
In the six to 12 months following the survey, 58% of respondents expected their entity to have this ability, getting closer to pre-pandemic levels (66%).
Figure 21
Changes relative to 2021
To further understand the challenges faced by entities during these uncertain times, we asked how critical aspects of their organizations, such as demand for services, expenses, staffing levels and funding, had changed over the year.
Demand for services
Although demand had increased for approximately 70% of the respondents, with 43% indicating a significant growth relative to 2021, only 12% reported that a very large increase in demand was the main factor keeping them from meeting demand.
Figure 22a
Lack of staff and/ or volunteers (35%) and lack of funding (21%) were top challenges in meeting demand for services, which had grown for about 70% of respondents.
Figure 22b
Growing expenses
In 2022, expenses increased for more than 80% of entities, with 46% experiencing a significant increase. Higher wages were the top driver of increased expenses (37%), followed by growth in non-labor overhead and input costs (19%) and higher demand resulting in greater day-to-day expenses (17%).
Figure 23a
Higher wages (37%) and non-labor overhead and input costs (23%) were the top drivers of increased expenses.
Figure 23b
Challenges in staffing
Approximately 45% of respondents indicated a decrease in their staffing levels in 2022 compared with 2021, with 18% indicating a significant decrease. The two primary challenges in staffing were hiring and retaining staff (26%) and the inability to offer competitive positions in the marketplace (23%).
Figure 24a
Primary challenges in staffing were hiring and retaining staff (26%) and the inability to offer competitive positions in the marketplace (23%).
Figure 24b
Funding: A critical resource for organizations
Lack of funding was one of the top challenges that affected survey respondents’ ability to meet demand for services. Financial volatility can impact not only daily operations, but also an organization’s ability to adapt in uncertain environments. Relative to 2021, income decreased for approximately 40% of entities, with 15% indicating a significant decrease.
Figure 25
Entities rely on diverse revenue streams. In the survey, respondents were asked to note changes to five different revenue sources. Compared with 2021, more entities noted an overall decrease in revenue from individual and corporate donations and foundation funds. More entities also noted an overall increase in revenue from government funds, fees for services and loans.
Figure 26
Revenue from credit or loans remained unchanged for 51% of respondents in 2022 relative to 2021, while 20% indicated an increase and 15% indicated a decrease.
Note: Non-applicable responses are excluded.
Figure 27
Revenue from individual or corporate donations decreased for 41% of respondents in 2022 relative to 2021, while almost 28% said it did not change.
Note: Non-applicable responses are excluded.
Figure 28
Revenue from fees for services did not change for 41% of respondents in 2022 relative to 2021, while almost 31% said it increased.
Note: Non-applicable responses are excluded.
Figure 29
Revenue from foundation funds decreased for one-third of respondents in 2022 relative to 2021, while another one-third didn’t experience any changes.
Note: Non-applicable responses are excluded.
Figure 30
Revenue from government funds increased for approximately 45% of respondents in 2022 relative to 2021, with 16% reporting that the growth was significant. Another 23% reported no change.
Note: Non-applicable responses are excluded.
Respondent profiles
While the types of entities that responded to the 2022 survey included financial institutions, government agencies and educational services providers, most respondents were from nonprofit organizations.
Figure 31
Survey administrators reached out to various entities that serve diverse demographic groups and work on a broad range of issues.
Figure 32
Eighty-nine percent of surveyed entities were direct service providers that gave aid to many groups, including older adults, youths and people with disabilities.
Figure 33
Figure 34
Half of the respondents served primarily urban areas (51%), while slightly more than one-third served primarily rural areas (35%).
Figure 35
Half of survey respondents reported that they primarily served communities of color, including multiple racial and ethnic groups.
Figure 36
Slightly more than one-third of respondent organizations were led by a person of color.
Figure 37
Figure 38
Is serving any of the following populations part of your entity’s mission or primary area of focus?
| Immigrants | 36% |
| LGBTQIA+ | 23% |
| Older Adults | 35% |
| People with Disabilities | 36% |
| Veterans | 27% |
| Youths | 42% |
| Additional Groups Not Listed Above | 17% |
Figure 39
States served by respondents
67 indicated that they worked nationwide
<50 respondents
50–99 respondents
100–149 respondents
About the survey
The spread of COVID-19 impacted communities throughout the nation. To continue responding to pandemic-related disruptions, information is needed about the scope and scale of challenges in various communities. This report offers findings of a survey designed to collect information about the effects of COVID-19 on low- to moderate-income communities and the entities serving them. The survey was fielded by seven national partners and Federal Reserve System’s community development function, which seeks to promote economic resiliency and mobility among LMI and underserved households and communities across the US.
The survey was administered between Aug. 3 and Aug. 31, 2022, and resulted in 1,743 responses. (Please note that there were approximately 2,616 total responses. However, this report presents results that include responses from entities that answered at least 50% of the survey.) Responses were collected through a convenience sampling method that relied on contact databases to identify representatives of nonprofit organizations, financial institutions, government agencies and other community organizations. These representatives were invited to participate in the survey via emails, newsletters and social media posts. A similar survey was conducted in 2021.
This survey provides an insightful and informative snapshot of how COVID-19 affected people and organizations on the dates the survey was administered. Readers should not compare findings in this report to similar surveys conducted in previous years. Views expressed are those of the report team and do not necessarily represent the views of the Federal Reserve System.
Please cite this report as: Chalise, Nishesh, Violeta Gutkowski, and Heidi Kaplan. “Perspectives from Main Street: The Impact of COVID-19 on Low- to Moderate-Income Communities and the Entities Serving Them,” November 2022.
Acknowledgements
The Federal Reserve’s community development function seeks to promote the economic resilience and mobility of low- to moderate-income (LMI) and underserved households and communities across the United States. We thank the following survey team members for their contributions.
Survey advisors
Daniel Paul Davis, Federal Reserve Bank of St. Louis
Michael Grover, Federal Reserve Bank of Minneapolis
David Kaufmann, Federal Reserve Board of Governors
Karen Leone de Nie, Federal Reserve Bank of Atlanta
Survey core group
Nishesh Chalise, Federal Reserve Bank of St. Louis
Violeta Gutkowski, Federal Reserve Bank of St. Louis
Heidi Kaplan, Federal Reserve Board of Governors
Steven Howland, Federal Reserve Bank of Kansas City
Surekha Carpenter, Federal Reserve Bank of Richmond
Report assistance
Melissa Kueker, Federal Reserve Bank of St. Louis
Nicholas A. Ledden, Federal Reserve Bank of St. Louis
Paula Austin, Federal Reserve Bank of Cleveland
Whitney Felder, Fed Communities
Crystal Flynn, Fed Communities
Nicole Guilfoyle, Fed Communities
Survey fielding team
Jeremiah Boyle, Federal Reserve Bank of Chicago
Surekha Carpenter, Federal Reserve Bank of Richmond
Lora Conwell, Federal Reserve Bank of Minneapolis
Suzanne Cummings, Federal Reserve Bank of Boston
Michelle Dailey, Federal Reserve Bank of St. Louis
Molly Hubbert Doyle, Federal Reserve Bank of Dallas
Emily Engel, Federal Reserve Bank of Chicago
Lauren Offenberg, Federal Reserve Bank of Atlanta
Samantha Porter, Federal Reserve Bank of Philadelphia
Edison Reyes, Federal Reserve Bank of New York
Lauren Shelby, Federal Reserve Bank of Chicago
Steven Shepelwich, Federal Reserve Bank of Kansas City
Libby Starling, Federal Reserve Bank of Minneapolis
Jennifer Wilding, Federal Reserve Bank of Kansas City
Paula Woessner, Federal Reserve Bank of Minneapolis
Crystal Theresa Ejanda, Federal Reserve Bank of San Francisco
Curtis Uemura, Federal Reserve Bank of San Francisco
National partners
The Federal Reserve System thanks the following organizations and individuals for their support. Partners helped review the survey design and recruited survey participants.
Local Initiatives Support Corporation; represented by Matt Josephs, David Greenberg and Tanya Chin Ross.
National Alliance of Community Economic Development Associations (NACEDA); represented by Frank Woodruff, Suzanne Gunther and Jeremy Brownlee.
National Community Action Partnerships; represented by Denise Harlow, Lana Shope and Ryan Gelman.
National Council of Nonprofits; represented by Amy Silver O’Leary and Rick Cohen.
National Fund for Workforce Solutions; represented by Amanda Cage.
National Urban League; represented by Traci Scott.
NeighborWorks America; represented by Michael Butchko.
