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COVID-19’s community fallout continues, latest Fed survey finds

The pandemic’s disruptions to communities will persist through late 2021, say Ninth District stakeholders

December 2, 2020

Author

System COVID-19 survey round four, key image
Cara Ewing/Minneapolis Fed

Article Highlights

  • Adverse effects on education, health, and businesses worsened in early fall
  • Nearly half of respondents say return to pre-pandemic conditions will take at least 12 months
  • As their expenses rise and donations fall, community organizations face financial distress
COVID-19’s community fallout continues, latest Fed survey finds

Findings from the latest round of a pulse survey show that nine months in, the COVID-19 pandemic continued to disrupt both communities and the organizations that serve them, across the Ninth Federal Reserve District and nation. To monitor the pandemic’s ongoing impacts on communities, the Federal Reserve System conducts the survey every eight weeks; its fourth survey round was fielded from October 7 through October 16, 2020.

While the composition of the respondent pool has varied across the four rounds of the survey, responses over the previous round in August and the latest round in October demonstrate consistency. Overall, the survey found that among Ninth District respondents:

  • Nearly half, 46 percent, indicated COVID-19 was a significant disruption to the economic conditions of the communities they serve and that they expect recovery to be difficult. Less than one-third of respondents, 29 percent, think that the disruption to communities caused by the pandemic was manageable or minimal. Both findings show only a modest change from August, when 53 percent saw COVID-19 as a significant disruption to economic conditions and expected a difficult recovery, while 30 percent thought that the disruption to their communities was manageable or minimal.
  • When asked to indicate the top impact of COVID-19 on the people and communities they serve, over one-third of respondents, 37 percent, indicated effects on businesses, 25 percent indicated individual job losses, and education was third at 17 percent. For comparison, these numbers are nearly identical to August results, which were 35 percent, 25 percent, and 17 percent, respectively. Given rising COVID-19 caseloads in the states of the Ninth District, it is not surprising that health moved into the top four concerns for the first time, with 8 percent calling it out as a top impact on people and communities.
  • Two-thirds of respondents (67 percent) reported that community conditions in education had become modestly or significantly worse over the previous eight weeks. Roughly half of respondents each thought that community conditions related to health (52 percent) and business impacts (47 percent) had become modestly or significantly worse over the previous eight weeks.
  • Responding prior to the announcement of effective vaccines, community development stakeholders expected communities to return to pre-pandemic conditions no sooner than late 2021. Nearly half (47 percent) indicated it will take more than 12 months for their communities to return to the conditions they were experiencing prior to the disruption from COVID-19. Fewer than one in ten (9 percent) expect their communities to recover in six months or less.
  • Nearly half of respondents, 49 percent, reported that COVID-19 was having a significant disruption on the entity they represent. Of those reporting a significant disruption, half expect recovery to be difficult, while half expect to bounce back quickly. Less than half, 44 percent, see COVID-19 as a manageable disruption, a drop from the 50 percent of August respondents reporting the same.
  • Over half of respondents (53 percent) indicated demand for their services has moderately or significantly increased. Similarly, half (51 percent) are seeing an increase in their expenses. At the same time, two in five respondents (43 percent) noted a corresponding decrease or anticipated decrease in their ability to provide services, and two in five respondents (43 percent) observed a decrease in individual donations.
  • As a result of increased expenses and decreased donations and financial support, entities that serve communities are facing financial distress. One in five (21 percent) expected to be in financial distress in less than six months, and only one in seven (14 percent) report no effect on their institutional financial health.

See the national report, Perspectives from Main Street: The Impact of COVID-19 on Low- to Moderate-Income Communities and the Entities Serving Them, for results from across the country.

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All 12 Federal Reserve Banks and the Board of Governors of the Federal Reserve System fielded the survey, resulting in 1,127 responses nationally. Of those responses, 159 were from organizations working in the four full states of the Ninth District (Minnesota, Montana, North Dakota, and South Dakota; due to the structure of survey responses, it is not possible to separate out respondents who work in the Ninth District portions of Michigan and Wisconsin). This follows three previous surveys administered in August, June, and April.

Among Ninth District survey respondents in the October round, 40 percent are from nonprofits, 18 percent each from financial institutions and other private industry (including those who provide services to government and nonprofits), 13 percent from government, and the remainder from other sectors.

Responses were collected through a convenience sampling method that relied on Federal Reserve Bank and Board of Governors stakeholder contact databases to identify representatives of nonprofit organizations, financial institutions, government agencies, and other entities that serve communities. These representatives were invited by email to participate in an online survey.

Libby Starling
Director, Community Development and Engagement

Libby Starling is the Minneapolis Fed’s Community Development and Engagement director. She is responsible for the Bank’s efforts to promote the economic resilience and mobility of low- to moderate-income individuals and communities across the Ninth Federal Reserve District.