The first weekend in May usually marks a major fundraiser for the Mountain View Chamber of Commerce, the exuberant downtown A La Carte and Art street fair. But this year, Castro Street will be a ghost town.
Other fundraisers have been nixed, and there's a very real possibility that the city's Art and Wine Festival at the end of the summer may be at risk as well. With revenue way down, the chamber is in turbulent financial waters.
"We have a couple months of runway and that's about it," said Peter Katz, the chamber CEO.
Chambers of commerce throughout the Midpeninsula are feeling the squeeze, as major fundraising events that typically keep the nonprofit organizations afloat get scrapped. Counties across the Bay Area issued strict shelter-in-place orders that prevent mass gatherings, now extended through at least the end of May, in order to prevent the spread of the new coronavirus. With those restrictions, an important stream of funding for the business groups has dried up.
At the same time, businesses that pay dues to their respective chamber of commerce are suffering significant losses themselves, in some cases cutting back on monthly and annual payments.
And it looks like there's no help in sight, as least from the federal government. Because unlike small businesses, chambers of commerce can't tap into federal stimulus funds because of their nonprofit status. The Payroll Protection Program (PPP), which provided $349 billion in forgivable loans to businesses earlier this month, specifically excludes nonprofit trade and professional organizations that have a so-called 501(c)(6) status.
The PPP officially ran out of money in two weeks, but Congress approved a spending plan that would inject an additional $310 billion in the now-depleted program. Again, trade organizations will not be allowed to apply.
In a letter to House Speaker Nancy Pelosi and local members of Congress, a coalition of more than a dozen local chambers of commerce across Silicon Valley urged lawmakers to reverse course and extend a lifeline to trade organizations. Chambers of commerce are currently playing a "vital role" in helping businesses through these turbulent times, including promotion and information on financial assistance.
"The inability to conduct normal fundraising activities along with impacts to reduced and declining memberships will force even well-resourced nonprofits to reduce staff immediately and may cause many to close permanently," the letter states.
The legislation, dubbed the CARES Act, allows businesses as well as certain types of nonprofits to access payroll loans. Trade associations are excluded due to concerns that public funds could be spent on lobbying efforts. The letter to Pelosi argues that lobbying is only a small fraction of expenses among trade associations and shouldn't be a deal breaker.
In a statement, Congresswoman Anna Eshoo, D-Palo Alto, said chambers of commerce play a critical role in the success of businesses and the economy, and that she sympathizes with the challenges they have faced during the coronavirus pandemic. She joined 61 other lawmakers in an April 10 letter to ranking House members insisting that trade associations be included in the CARES Act.
"If these organizations are unable to survive, the path to recovery for our hard-hit Main Street economy will be even more difficult," according to the letter.
That being said, Eshoo said she does want safeguards in place to ensure the money goes to the right places. Other 501(c)(6) organizations like pro football leagues should not be taking resources away from small businesses, she said.
In Mountain View, the chamber of commerce has been ramping up its informational newsletters to member businesses and working overtime to promote business that are still open, Katz said. Since the shelter order was implemented in March, the chamber's website has built a lengthy list of businesses that are still doing online orders or remain open to walk-in customers with adjusted hours.
"So many small businesses count on the chamber of commerce because they can't do the kind of marketing and awareness that other companies can do," Katz said. "We've been promoting them broadly."