For immediate release: September 2, 2020
In a new national survey by the Federal Reserve, almost two-thirds of organizations serving low- to moderate-income (LMI) communities indicated that demand for their services increased since early June as a result of the COVID-19 pandemic. Meanwhile, 42 percent noted a corresponding decrease in their ability to provide services in these communities.
"Perspectives from Main Street: The Impact of COVID-19 on Low- to Moderate-Income Communities and the Entities Serving Them" is the latest community development survey of government agencies, nonprofits, financial institutions and other organizations. It was conducted in August and included 1,465 respondents working on a range of issues within their LMI communities, such as consumer finance, housing, small business, workforce development, education, and health. The respondents represented a mix of U.S. urban, suburban, and rural areas.
In addition to reporting a modest (28 percent) or significant (37 percent) increase in demand for services, more than a quarter of organizations said they could only operate for six months or less in the current environment before exhibiting financial distress, such as reducing services, laying off staff, or closing locations. When asked about COVID-19’s overall impact on the LMI communities they serve, those surveyed in August most frequently cited income loss, job loss, and unemployment (38 percent). This finding was consistent with those from the same survey administered in April and June.
The full survey results from August, as well as previous surveys, are available at frbatlanta.org/covidsurvey-communities. The Federal Reserve seeks to promote the economic resilience and mobility of individuals and communities across the United States, including LMI and underserved households. Increasing economic opportunity is not only good for individuals and communities but also is vital to the overall economy. Amid the pandemic, the Fed is deepening its existing outreach to gather useful information as conditions evolve.