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Leaders tell Fed: COVID has been hard on people of color and nonprofits

More than half of Rochester’s children live in poverty. Some 20,000 to 40,000 residents could face eviction in Monroe County when a temporary moratorium is lifted. Income disparities between African American and Latinx residents and white residents in Monroe County are the fifth highest nationwide among 31,000 counties.

John Williams, New York Federal Reserve Bank President and CEO

John Williams, New York Federal Reserve Bank President and CEO

These were among the statistics shared with New York Federal Reserve Bank President and CEO John Williams last week during one of several calls Williams held with community leaders. Friday’s call was to discuss the economic impact of the pandemic on the communities served by local nonprofits.

“The severity of the current situation reflects our region’s racialized and concentrated poverty before we went into the pandemic,” Rochester Area Community Foundation President and CEO Jennifer Leonard told Williams. “The city of Rochester places at or near the top nationally for overall poverty, childhood poverty and extreme poverty. Among our entire nine-county region, Latinx and African American children are three to four times more likely to live in poverty than white children. The challenge of racialized poverty extends through our entire region.”

Race-based disparities in housing, health, employment status, education and wealth place Rochester’s residents of color far behind whites in the region, the state and the nation, Leonard added. And with the pandemic, better paid workers and those with white collar jobs were more likely to be able to shelter in place, work remotely and oversee the remote education of their children.

“Workers of color were disproportionately in low-income jobs, many deemed essential, or unemployed, often living in more densely populated homes or neighborhoods with less access to healthy foods, social distancing or transportation,” Leonard said. “For them, the daily challenges of finding sustenance, child care and other basic needs became untenable and the tolls from COVID severe.”

Jennifer Leonard

Jennifer Leonard

Leonard noted the Community Crisis Fund, started by the Community Foundation and the United Way of Greater Rochester Inc. The multimillion-dollar fund has helped nonprofits meet growing needs for food, shelter, personal protective equipment and other basic needs, “but the threat of evictions loom large, the need for supplementary income is felt deeply across community residents,” she said.

“Already, nonprofits run by African American and Latinx leaders are disproportionately undercapitalized compared to others,” Leonard said.

To address that, the Community Foundation has started a Racial Equity Growth Fund to assist nonprofits run by persons of color or serving them, as well as to help small businesses increase diversity in their workforces. And the Community Crisis Fund also has begun to provide more operational support to nonprofits serving or led by persons of color.

“The Community Foundation and its partners are working to understand and strengthen the ecosystem of entrepreneurial support in Rochester so as we recover, the African American and Latinx businesses of our community will have strong support to help them find success and expand employment opportunities to their neighbors,” Leonard said. ‘Without federal assistance in New York state, Rochester may be forced to cut even more vital services for low- and moderate-income communities.”

Faheem Masood

Faheem Masood

ESL Federal Credit Union President and CEO Faheem Masood said his biggest concern post-COVID is for Rochester’s nonprofit sector.

“That sector is very critical to us meeting and addressing some of the challenges that we have in our community,” Masood said. “And that sector depends on a lot of government support, private funding, and all of those funding sources are under tremendous stress. From a long-term perspective, I am very concerned about the health of our nonprofit sector as entities surviving through this pandemic.”

Masood noted that nonprofits already were struggling with funding gaps and often are expected to deliver services in advance of receiving funds. Both Leonard and United Way President and CEO Jaime Saunders pointed out a 20 percent state funding cut to nonprofits.

Jaime Saunders

Jaime Saunders

“And we’re waiting for the other shoe to drop,” Saunders said. “Our partners at New York Council of Nonprofits has issued a recent survey that estimated 30 to 40 percent of nonprofits will not survive the next 18 months.”

Those are the same nonprofits that serve the populations that are struggling with poverty, unemployment, housing and more.

“We’re very concerned about the impact of increased or sustained unemployment on the ability of people to stay in their homes, of tenants to stay in their apartments, homeowners to continue to pay mortgages and keep their homes and then the long-term impact of that on the community in which those folks live,” said Theodora Finn, president of Greater Rochester Housing Partnership. “We have been fortunate these past six months to have policies and programs in place to put a stopgap or relief in place to help folks, and so those impacts haven’t been felt yet.”

But, Finn said, she is concerned that if those supports don’t continue in the long term we will see an increase in evictions, foreclosures and ultimately homelessness.

“Also for landlords who own buildings in our communities when they can’t collect rent, will they continue to be able to fulfill those investments and keep them up? I think that’s something we need to consider for the long-term,” Finn said.

When community leaders were asked about the fiscal impacts and economic disruptions in their own organizations, Masood noted significant challenges in terms of access and trust of financial institutions in communities of color.

“This particular time of need for capital and the lack of access has really been challenging for that community because a lot of the distribution of funds has been based on existing relationships and we don’t have that depth of relationship with the business community of people of color that we have with the vast majority,” he explained, suggesting that financial institutions should be incentivized to take actions to address that issue. “One of the roles the Fed can play … I would encourage you to be somewhat of an obstacle to the changes that are being encouraged by the (Trump) administration because we have huge gaps in housing for people of color in our community and we have a huge concentration within the city — our suburbs are very white — and we need to continue to focus on making housing more accessible.”

William Johnson

William Johnson

William Johnson, former Rochester mayor and CEO of Urban League of Rochester N.Y. Inc., echoed Masood’s sentiment, also noting that the city of Rochester has partnered with the county of Monroe on a new Racial and Structural Equity Commission (RASE) to address those issues. Johnson co-chairs the new commission.

“We have nine working groups, one is housing, and our charge is to identify every legal impediment, every legal support that enhances and supports inequities and discrimination and bring that back to the attention of the public as a part of an action agenda where these systems can be systematically disabled and replaced,” Johnson said. “I think it is important that the financial sector make it clear, as Faheem is doing, that this capital can be made available but it can’t really be effective without substantial changes in practice policies and laws that localities continue to cling to.”

New York Fed President Williams said we have moved from a severe economic downturn during the COVID-19 outbreak to an economic recovery. But he acknowledged that what the community and organizational leaders on the call were saying was that Rochester didn’t have an equitable economy to begin with.

“And that fact has interacted in important ways with how different communities have been affected by COVID. Some of our research highlighted that Black-owned businesses are almost twice as likely to shutter during the pandemic. That’s one specific data point that you can see how the pandemic has highlighted the vulnerability of small businesses, especially in communities of color,” Williams said. “When we think about the work we’re doing, not only today but over the next several years, it is about equitable recovery and a strong economy and getting jobs, but it’s also about building a stronger foundation, a more equitable economy that comes out of this.”

vspicer@bridgetowermedia.com / 585-653-4021 / @Velvet_Spicer

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