Lack of access to funding can be a major hindrance to business recovery following disasters. Even when a business is insured or qualifies for an SBA loan, it can take months for the reimbursement process to play out. For that reason, the Cedar Rapids (Iowa) Area Chamber of Commerce helped create a bridge financing program for businesses following flooding there in 2008.
The Job and Small Business Recovery Fund was designed to meet immediate needs, such as helping to cover payroll costs, investment in replacement equipment or as leverage for new loans. "Our checks were the first checks on the ground [after the disaster]," says Jeff Schamberger, director of membership. The first checks were issued only six weeks after flooding devastated more than 10 square miles, about 14 percent of the city.
Generally, businesses were eligible to receive up to $15,000 in bridge financing, with a maximum of $25,000 allowable under certain circumstances. One-half of the funds was a grant; the other half was a three-year, no-interest forgivable loan if certain criteria were met. Just two months after the flood, 58 business owners had received checks totaling more than $1 million. In all, some 330 businesses received help, according to Schamberger. "It [the program] wasn't to make any individual business whole," he says. "We knew we couldn't do that. … It gave them hope."
The program was seeded with money from chamber reserves, private businesses and economic development funds. The city of Cedar Rapids provided matching funds. The chamber created an Administrative Oversight Team that determined eligibility criteria and an application based on the SBA loan application, as well as a process for evaluating applications. Evaluations were done by members of a local SCORE chapter.
Even before Gina Spagnola, IOM, could return to Galveston after Hurricane Ike struck in 2008, her main focus became organizing a Business Recovery Expo. Putting together a tabletop expo seemed like a natural thing to do. "Chambers do this in their sleep," says Spagnola, president of the Galveston Chamber of Commerce.
The Expo was held at a resort and conference center on Galveston Island about one month after Ike. The chamber staff lined up numerous exhibitors and speakers, including representatives from FEMA, the governor's office, Rep. Ron Paul's office, public works, the Galveston Historical Foundation and the U.S. Chamber of Commerce BCLC Disaster Assistance and Recovery program.
A local restaurant also exhibited to let others know it needed to hire wait staff and bus boys, according to an article in the Galveston County Daily News. Before the hurricane struck, the establishment had employed many local college students. After the storm, many students moved to another college campus to complete the semester. (Displacement of workers after a disaster can be a major hurdle for businesses wanting to reopen, say disaster experts.)
More than 400 people attended the Expo. That number could have been considerably higher, but many people had not yet returned to the island, Spagnola says. Beyond providing information, the Expo played a special role in the community's recovery. It was "a place to gather," she says. "A place to say there is going to be a better day. To say we are going to help each other."
In areas where Congress appropriates Community Development Block Grant (CDBG) Disaster Recovery funds, chambers have been instrumental in ensuring some funds are used for business recovery. One example of this occurred along the Mississippi Gulf Coast following Hurricane Katrina. The Hancock County Chamber of Commerce in Mississippi played a pivotal role in creating and administering a CDBGfunded program.
Tish Williams, executive director of the Hancock County Chamber of Commerce and Hancock Community Development Foundation, collected signatures to lobby for a resolution of support for a small business grant program as part of an application for CDBG funds. Next, she talked to each of the three local government entities and asked them to put aid for small businesses on the list of projects for which they were seeking funding. She also helped local government officials complete the paperwork submitted to the Mississippi Development Authority, which then worked with the U.S. Department of Housing and Urban Development. Her grass-roots campaign began in 2006 after she learned that Mississippi did not offer disaster recovery grants to businesses.
Williams' hard work paid off. She won approval to create a $3 million Job Generation Fund for Hancock County, which kicked off in September 2009. Of the $3 million, $2.4 million was approved for low-interest forgivable loans, while the balance could be used for program delivery and administration. (Hancock County received $200 million in CDBG disaster funds, with $15 million earmarked for economic development, of which the Job Generation Fund received 20 percent.)
The Hancock Community Development Foundation was designated and funded as program administrator. Any business operating in Hancock County for at least six months before the disaster was eligible to apply. The loans ranged from $5,000 to $50,000; with businesses located along the water permitted to seek up to $150,000.
It was the chamber, working with committees of members from the business community, which drafted the framework, policies and procedures for the program within the guidelines of the Mississippi Development Authority. Applicants did not need to be chamber members to apply.
Did the chamber worry about ruffling feathers of those who did not receive funding? Williams said there was concern about how the program would affect members, but she says, "To do nothing would have affected the membership to a greater extent. We believed passionately that this was something we were driven to no matter the consequences." Williams believes the chamber crafted a "fair and unbiased" system for evaluating applicants. The chamber also held workshops to help people complete the application process.
The Job Generation Fund has helped 40 county businesses, and all the loans have closed, says Williams. Since they are reimbursement loans, some businesses still must submit documentation for reimbursement. The program has been a long-term commitment, and the chamber's 501(c)(3) will continue to manage the program through 2016.
In areas declared a major disaster by the U.S. president, the Department of Housing and Urban Development (HUD) can provide supplemental CDBG Disaster Recovery grants as appropriated by Congress. These funds are generally allocated "based on unmet disaster recovery needs for activities" not reimbursable under FEMA, SBA or Army Corps programs, according to the HUD Disaster Recovery Assistance web site.
The CDBG disaster relief funding is designed for long-term recovery needs. At least 50 percent of these funds "must be for activities that principally benefit persons of low or moderate income," according to HUD. The federal government defines a number of activities eligible for the grants, including many related to housing and infrastructure. However, one eligible use is for "assistance to disaster-affected businesses for carrying out economic development activities to create and retain jobs."
Some chamber executives have helped lobby for CDBG Disaster Recovery grant appropriations, set criteria for programs paid for by the funds, and overseen the administration of the fund distribution. The process can be daunting and slow, since funding is appropriated to states, which then must distribute the money in compliance with federal regulations.
For more information, go to http://tinyurl.com/3b3uw93.
The day after an EF-5 tornado (winds above 200 mph) struck Joplin, Mo., on May 22, 2011, Gina Spagnola, IOM, had a mission. Spagnola, president of the Galveston Chamber of Commerce, Galveston, Texas, wanted to get in touch with Rob O'Brian, CEcD, president of the Joplin chamber, though they had never met. Why? Spagnola planned to offer assistance to people in Joplin, just as other chambers had helped her when Hurricane Ike struck Galveston in 2008.
When Spagnola could not reach O'Brian, she contacted Inés Pearce, the senior disaster response advisor and Help Desk Manager of the U.S. Chamber of Commerce's Business Civic Leadership Center. The Joplin chamber's e-mail was down, but Pearce knew O'Brian's personal e-mail address. Spagnola had secured a $1,000 donation to send to the Joplin chamber, and she talked to O'Brian, urging him to conduct a needs assessment so Galveston could help.
That same day, she e-mailed a letter to Galveston chamber members seeking help with a "Galveston Pays It Forward" relief effort. She asked members to donate gift cards (or cash for gift cards) that could be sent to the Joplin chamber, just as the Mississippi Gulf Coast Chamber had done for her.
Members of the Gulf Coast chamber did more than provide gift cards after Ike. Executives shared lessons about disaster recovery that they had learned following Hurricane Katrina. They also sent caring e-mails, offering helpful personal hints such as suggesting that Spagnola get some sleep or see a movie. Those chamber executives knew that Spagnola would be better able to care for Galveston's business community if she took care of herself.
Spagnola, in turn, provided encouragement to O'Brian. In a May 25 e-mail, she wrote, "I remember the feelings as if it were yesterday, but with time it will get better, I promise." She also offered to help Joplin organize a Business Recovery Expo, just as she had done after Ike with mentoring from the U.S. Chamber and the Mississippi Gulf Coast Chamber.
Only a few weeks after the tornado, she traveled to Joplin to help organize the expo and meet with O'Brian and his staff. And this fall, Spagnola paid it forward with another act of kindness. Joplin officials, including O'Brian, enjoyed a little R&R in Galveston, while witnessing firsthand how the Texas community is recovering from a major disaster.
Here are other ways chambers have assisted each other following disasters:
After Katrina hit, the Detroit Regional Chamber in Michigan sent a mobile communications unit to the Mississippi Gulf Coast Chamber that could be used as an office. The trailer subsequently spent time in Hancock County, Miss., and then made its way to Galveston after Ike. After a short stint in Galveston, Spagnola sent it to the Greater Port Arthur Chamber of Commerce. The trailer went back to Michigan in 2010 to get retrofitted for future use during disasters.
After flooding hit Tennessee in 2010, Shannon Meyer, then with the Cedar Rapids Area Chamber of Commerce, spent hours on conference calls with chamber executives in Nashville and Clarksville, Tenn., offering suggestions for response and recovery.
Employees from nearby chambers helped employees of the Joplin chamber answer the flood of phone calls that chamber received following a tornado. Numerous people called seeking assistance, while others called offering to help.
Employees of the Chamber of Commerce of West Alabama provided suggestions to Joplin chamber officials about how to proceed with recovery. West Alabama chamber employees posted encouraging messages on the Joplin chamber's Facebook page, even as western Alabama grappled with its own tornado recovery.
On the recommendation of ACCE, many chambers choose to become members of a chamber in a disasteraffected area for one year. Doing so eases the burden of lost dues revenues from shuttered or recovering businesses. After the 2008 flooding in Cedar Rapids, Iowa, nearly 30 chambers sent membership checks to the Cedar Rapids chamber, says Jeff Schamberger, director of membership. Others sent donations. "That support in the chamber world meant a lot to us," says Schamberger. This year, the Cedar Rapids Area Chamber of Commerce joined the Chamber of Commerce of West Alabama to assist in that region's recovery.
Following massive flooding in Cedar Rapids, Iowa, in 2008, the Cedar Rapids Area Chamber of Commerce helped develop a case management program that officials believe could be used as a model for other communities. The Business Long Term Recovery Initiative is the biggest business assistance program ever implemented following a disaster, according to Scott Swenson, senior case manager.
The formal case management program got under way in November 2009, almost 18 months after massive flooding hit the Eastern Iowa community. The program was funded by a state Community Disaster Grant; it was later supplemented with federal funds. The Business Long Term Recovery Initiative grew out of an informal network of businesses helping other businesses following the flood, says Swenson.
The formal program started with case workers conducting "needs assessments" of approximately 1,200 businesses. To do so, case managers met with most business owners in person for one to two hours. They asked numerous questions from an 8-page survey they had developed, covering such topics as pre- and post-flood revenues, payroll and employee counts.
Case managers quickly realized that owners were overwhelmed by the application process for the assistance programs developed by the chamber and funded with HUD CDBG disaster funds (see main article for details). Therefore, case managers made it a top priority to educate recipients about the assistance programs and help them apply for aid.
The core element of the case management program, though, was to provide mentors to flood-affected businesses. The case management team discovered that some business owners needed help with financial statements or had never created a formal business plan. Others needed help coping with "the new normal." Perhaps a business had always done well in a previous location, but needed to determine how to drive traffic to a new location. One pizza place, says Swenson, had to figure out how to stay profitable despite the fact that about one-third of its market area—some 3,000 houses—had disappeared. Thanks to the case management program, the pizza place ended up adding a sit-down area to draw new customers.
Where did the mentors come from? Many were volunteers from local SCORE chapters or those affiliated with the local Small Business Development Center. More recently, the program set up a partnership with the entrepreneurial center at the University of Iowa's business school. Case managers themselves had extensive business experience and helped out when needed, says Swenson. Typically, they did not advise their own clients.
"Marketing probably was and remains the No. 1 thing we are helping businesses with," says Swenson. Case managers also did a lot of trouble-shooting on restructuring SBA loans, assisting with relocation issues or lobbying for waivers to federal assistance programs.
Earlier this year, the name of the program was changed to the Business Success Initiative. "We are trying to get the mentality [to shift] from the recovery stage to the prosperity stage," says Swenson.
A few days after a deadly tornado hit Joplin, Mo., in May 2011, Kirstie Smith was looking for ways to promote the Business Recovery Fund established by the Joplin chamber's 501(c)(3). As communications director for the Joplin Area Chamber of Commerce, she wanted to reach people outside of town. But how? Her husband suggested she "go on the Rush Limbaugh Show."
The next day, Smith tried to contact producers for the radio show. She learned her only chance of getting on would come from calling in while the show aired. So that's what she and another chamber employee did. After numerous calls, someone answered the phone.
The first thing Smith said was, "I'm calling from Joplin, Missouri." Despite an interruption for a commercial break, the producers allowed the Joplin staff to tell their story. The chamber experienced what Smith called "a phenomenal response." In 24 hours, the fund grew by $50,000. Limbaugh also mentioned the fund on the show's web site. To further show his support for Joplin citizens, Limbaugh appeared in person in the town on July 4.