The economic effects of the coronavirus pandemic have been dramatic and unprecedented, as cities and countries shut down large swaths of their economies to control the spread of the virus, and consumer demand has fallen due to stay-at-home orders, rising unemployment, and general economic uncertainty.
In mid-March, after the District had seen its first official COVID-19 case and as the city began to restrict various services to prevent the spread of the coronavirus, the D.C. Policy Center launched two questionnaires—one to small businesses and one to nonprofits—about how they are responding to the COVID-19 pandemic. These questionnaires, distributed primarily through industry groups and other existing networks by email, were not meant to be representative surveys. Instead, they were an opportunity for small businesses and nonprofits to tell us, in their own words, their concerns about their future in an uncertain economic and public health environment.
The D.C. Policy Center received nearly 500 responses combined from small businesses and nonprofits based in D.C. and in the broader metropolitan area. While these surveys were from the early weeks of the pandemic when we did not fully appreciate its deepest impacts, by pairing these qualitative responses with national surveys and economic data, we can nonetheless provide a look at how they are experiencing the COVID-19 crisis, and what they need to survive and recover in the months ahead:
- Small businesses were caught unprepared for the unprecedented demand shock. They worry that what took years to build—their staff, customer base, and strong relationships with their banks and creditors—will be broken beyond repair.
- Nonprofits have been hit especially hard. Those which rely on events as fundraisers, contracts for services for other small entities, or retail sales as their revenue sources, have taken a significant revenue hit. In results mirrored recently in the Wall Street Journal, the Policy Center found that nonprofits have quickly switched to remote services where this could be done or expanded their services to include things that do not require contacts, but many eliminated their volunteer programs because of health risks involved.
In sum, the landscape of small business and nonprofits will look different at the other end of the pandemic, barring additional supports from the federal and local governments or philanthropy.