Mural by Tristan Eaton
Photograph by Timothy A. Clary /AFP via Getty Images
In response to the COVID-19 pandemic and the sharp economic downturn it caused, the firm redoubled its work for at-risk nonprofit organizations and under-resourced microbusinesses (defined as businesses with 10 or fewer employees). In collaboration with Lawyers Alliance for New York, Pro Bono Partnership, and Start Small Think Big, we provided a broad range of services to clients with pandemic-related legal issues. Our mobilization of resources and efficient systems for client referral and intake allowed us to reach a large number of nonprofits and microbusinesses, providing them with timely legal counsel on critical issues such as obtaining loans and grants and navigating employment and safety issues.
Helping Nonprofits and
MicroBusinesses Survive a
Global Pandemic
The pandemic brought urgent financial challenges to nonprofits and microbusinesses across the country. Nonprofits had to use their limited resources to shift to a remote environment, and many microbusinesses were forced to close their doors for weeks or months at a time, losing essential sources of revenue. Black-owned businesses were particularly hard hit: 41 percent of Black-owned businesses, compared to 17 percent of white-owned businesses, had been shut down by COVID-19 by the end of April 2020. When Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act and federal stimulus relief became available, nonprofits and microbusinesses needed help navigating the financial options that could help save their organizations. In particular, they needed access to loans–convertible into grants– through the Small Business Administration (SBA) Paycheck Protection Program (PPP).
Together with Pro Bono Partnership and Start Small Think Big, we launched an initiative to assist nonprofits and microbusinesses with their questions about and applications for federal relief. We helped more than 200 clients assess their eligibility for PPP loans, fill out their applications, understand the restrictions that applied to spending the funds they received, and apply to have their loans forgiven.
We educated the public by creating and regularly updating FAQs about how nonprofits and microbusinesses could benefit from the PPP.
By the end of 2020, firm volunteers had provided guidance to 59 nonprofits and 173 microbusinesses on their questions about and applications for the PPP and other federal and state relief programs.
Through this work, we gained firsthand knowledge of the challenges faced by our clients–particularly minority-owned microbusinesses–in securing the funds they badly needed. For example, many of our clients lacked lender relationships or otherwise had trouble connecting with representatives from financial institutions that would process and manage the loan. Others were deterred from applying because the rules governing loan forgiveness were complex and frequently shifting.
With the goal of ensuring that the PPP would become more responsive to the particular needs of our clients, we drafted and signed on to letters to Congress that made many recommendations for improving the program, including the following:
- Ensuring fair and equitable access to PPP funds for nonprofits and microbusinesses
- Reopening the PPP after the program closed in August 2020
- Collecting demographic data for loan recipients to better track the program’s impact on minority and female borrowers
- Providing automatic forgiveness of loans under $150,000
- Enhancing spending flexibility
- Earmarking funds for microbusinesses and community financial institutions
Many of these recommendations were adopted as Congress amended the CARES Act and the SBA updated its guidance. Throughout this ongoing process, our volunteers continued to educate themselves on federal stimulus relief and advised their clients on the resources available to them so that they could remain in operation.
By the end of 2020, firm volunteers had provided guidance to 59 nonprofits and 173 microbusinesses on their questions about and applications for the PPP and other federal and state relief programs.
