The COVID-19 pandemic continues to strain nonprofits and businesses beyond their comfort zones. NCRC members have stepped up in extraordinary ways to support their communities during this on-going national emergency. Thomas Barr is the Executive Director for Local First Arizona (LFA), the largest coalition of local businesses in North America. Founded in 2003 by Kimber Lanning, LFA is a community and economic development organization working to strengthen local economies. LFA educates consumers about the interconnectedness of the economy, trains small businesses to be more effective and more competitive, helps larger Arizona businesses and institutions tell their story as champions of Arizona, and creates programs and events that make it fun and easy to discover local businesses and buy local. Barr advocates for a strong local business community that contributes to building vibrancy, equity, and prosperity across the state. A proud Arizona native and graduate of Arizona State University, Barr leads the business coalition of LFA by advocating for the economic and cultural benefits provided by building strong local economies.
In March, LFA quickly recognized the adverse consequences of COVID-19 and determined that they would need to be a reliable source of information for small businesses and policymakers. “We knew that information was going to be key and it was changing so quickly, we needed to position ourselves to be the most trusted resource for small businesses,” Barr said. LFA shared valuable information on their social media platforms and local media outlets, and provided policy recommendations to the governor’s office. LFA also hosted weekly educational sessions and encouraged businesses to make long-term plans to survive through October 2020.
Additionally, LFA quickly realized that immediate cash flow to small businesses, not loans, was necessary to support the Arizona economy. On March 27, LFA launched the Small Business Relief Fund (SBRF) with their community partners to provide mini-grants to Arizona’s smallest, locally-owned, independent enterprises to cover costs like employee payroll and rent. These micro-entrepreneurs were businesses with 0-3 employees, less than $250,000 in annual revenue and approximately $35,000-$45,000 in net profits.
“The stories from business owners ranged from devastating to tear jerking; when we told businesses that we would give them $1,500 to $2,500 dollars, some broke down, overwhelmed with emotions,” Barr said. LFA raised over $2,000,000 in grants from over 30 Arizona larger businesses and local nonprofits and distributed a quarter of that during the first month of launching before federal aid reached small businesses in Arizona. So far, LFA has distributed about 660 grants ranging from $1,500 to $2,500 to 400 businesses in all 15 Arizona counties.
Through the Paycheck Protection Program (PPP) process, some small businesses experienced poor treatment from large banks. LFA helped their businesses connect to smaller banks and community banks to receive their PPP loans. “The pandemic exposed the truth and weaknesses that exist in how our system operates,” Barr said. “It allowed the small businesses to see the value of strong relationships in community banking. We do not have to convince them (small businesses) anymore, people show their true colors in times of crises, community banks stood up and big banks stepped back.”
During these challenging times, Barr described his reassurance that small business entrepreneurs are the most innovative and resilient people. “Many businesses I talked to, especially communities of color, were like okay, let’s deal with this.”
CRA Connection to Strong Recovery
The Community Reinvestment Act (CRA) is a federal law that encourages financial institutions to meet the credit needs of communities they serve, including low- and moderate-income areas. CRA is vital for community resiliency and recovery, especially from the pandemic. “If we see CRA stripped away in any manner, we are only going to see the rippled effect across the entire community,” Barr said. CRA provides support for grassroots organizations, communities of color, and supports the small business community. “When we can ensure that small businesses are invested in, then those businesses can invest in other small businesses and community organizations.”
Visit www.localfirstaz.com for more information and a directory of more than 3,000 locally owned businesses.
Zo Amani is NCRC’s CRA Coordinator.
Photo is of Thomas Barr.