There is so much we can learn from a crisis. Crises reveal the weaknesses in our systems, but they also have a way of augmenting our shared humanity – bringing us together to act with urgency to help those in need.
The Chicago Community Trust saw this firsthand when we–in partnership with the United Way of Metro Chicago—created the Chicago Community COVID-19 Response Fund. Thousands of generous individuals, foundations, and corporations stepped up, with gifts ranging from $5 to $2.5 million. Together, we raised and disseminated more than $35 million to support organizations providing emergency services such as food, interim housing, health care, and direct financial assistance. We also served as a partner or administrator on nine additional response funds providing relief to small businesses, artists, and others impacted by the pandemic.
The philanthropic sector is critical in providing resources to organizations working to improve disinvested communities and the quality of life for residents. But philanthropy alone cannot fill the gaps created by decades of systemic inequities. Bringing about systemic change requires policy reforms and equitable investment in our neighborhoods and the people who call them home. The relief dollars provided by these response funds will reap little reward without the leadership of our policymakers to invest in systems improvements to ensure agencies can respond expediently when a crisis causes a sudden surge in need.
COVID-19 abruptly shut down the world, demonstrating that our social safety nets are too fragile and ill-prepared to respond to crisis. At its peak, the unemployment rates in the Chicago region rose to more than 16 percent. The pandemic also worsened financial stability for communities of color. In Chicago, 69 percent of Black households and 63 percent of Latinx households reported serious financial problems last year, including losses in savings and difficulty paying for necessary expenses.
While Congress invested heavily in COVID-19 relief, we quickly learned the government systems and infrastructure needed to expediently distribute aid require significant upgrades. Too many households continue to wait for unemployment insurance, housing assistance, tax credits, and stimulus payments that were appropriated more than a year ago.
The American Rescue Plan Act (ARPA) provides a unique opportunity to improve how quickly and efficiently aid is distributed to the individuals, families, small businesses, and nonprofits that have felt the brunt of the pandemic’s economic impact. Doing so will not just improve how we disseminate aid, but also help mitigate the impact of a future crisis.
The Trust applauds our leaders in state, city, and county government for their work over the past year to ensure federal resources reach those in need. Policymakers and government employees have worked tirelessly to provide people with rental, cash, unemployment, and nutrition assistance amid office closures, staffing shortages, and sudden spikes in caseloads.
But our government’s reach and ability to execute swiftly is limited by an outdated technological infrastructure, policies, procedures, and culture that too often requires people to solicit aid in person.
We call on our state and local policymakers to urgently apply their Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) to address the economic impact of the pandemic in innovative ways and provide better public service to people who struggle to make ends meet. These funds provide a unique opportunity to address systemic weaknesses highlighted by the pandemic. Policymakers should consider leveraging CSLFRF funds for investments like: updated unemployment benefit application and case management systems; modern technology to communicate better with clients and disseminate public benefits; and opportunities for low-income households to receive flexible cash assistance through a guaranteed income pilot and expansion of the Earned Income Credit.
By improving our ability to act swiftly during times of crisis—whether individual or shared—we can ensure that our neighbors in need reach the pathway to stability much sooner.