Boosts for Small Business
Last month, Philanthropy Roundtable director of economic opportunity Tony Mayer hosted a webinar reviewing local philanthropic measures to help small businesses stay afloat during the economic distress associated with covid-19. He hosted representatives from the El Pomar Foundation of Colorado Springs, the James Graham Brown Foundation of Louisville, the Ewing Marion Kauffman Foundation of Kansas City, and the DeVos Foundations of Grand Rapids.
“One of the critical components of the U.S. economy is small businesses,” Mayer explained. “There are about 30.2 million small businesses across the U.S.,” employing around half of American workers. And the economic lockdown hurt them badly. “In a recent study looking at the impact of the current crisis, the estimate was that about 43 percent of small businesses have temporarily closed.” Many small businesses have shuttered for good. And small businesses had to reduce their employee counts by 40 percent to survive the spring.
In Kansas City, the Ewing Marion Kauffman Foundation joined local partners in offering $5 million in relief loans to area small businesses. John Tyler of Kauffman noted in the webinar that “businesses less than five years old are the largest, most significant source of net new jobs” in the U.S. Yet as Kauffman president Wendy Guillies has noted, “most U.S. small businesses operate on an extremely tight margin…47 percent have two weeks or less of cash liquidity.” The Kauffman program quickly had more than 600 applications. Their average loan was $25,000, and went to a local company with fewer than 20 employees and less than $2.5 million in annual revenue.
In Grand Rapids, four DeVos family foundations and other donors supported the Greater Grand Rapids Chamber Foundation in offering grants to the area’s hard-hit small businesses. Firms with 5-25 full-time employees were targeted, and $1.5 million was raised to support more than 100 applicants with grants of $5,000 to $10,000. Jason Zylstra of the DeVos Family Foundations says the next opportunity for donors will be to help small business owners acquire the best practices they need to reopen and operate safely over the summer.
The James Graham Brown Foundation donated $500,000 to boost eastern Kentucky businesses through mini-grants and no-interest loans. And in Colorado Springs, the El Pomar Foundation supported its local tech-startup accelerator in providing low- and zero-interest loans to area businesses.
Just as the economy began to reopen, small businesses faced another threat—looting and vandalism. In Minneapolis, where the unrest began, the nonprofit Lake Street Council has raised $6 million for damaged local businesses. Other organizations have been organizing volunteers to clean up commercial wreckage in the Twin Cities.
In Chicago, South Korean immigrant Yong Sup Na discovered that his two beauty-supply stores had been looted, and insurance would only cover a quarter of the damages. So his family organized a GoFundMe, and within a week, they had raised more than $82,000. One of the 860 donors, business student Ben Guo, told Block Club Chicago that he wanted to support Yong Sup Na’s pursuit of the American dream. “I recognized the importance of small businesses in our neighborhood,” said Guo, and Na “has helped create a sense of community with his store over many years.”