How the city of Spokane supported businesses with its CARES Act funds

Eric Phillips is the IT guy for businesses too small to have their own IT guy.

As small businesses suffered through the economic turmoil of the coronavirus pandemic, Datarang, the company Phillips co-owns, suffered with them.

“Remember when the tech bubble broke right around 2000 or so? It’s like that,” Phillips said. “We’re all sort of stuck in it together.”

Datarang was awarded a $27,500 grant from the city of Spokane’s portion of the federal Coronavirus Aid, Relief and Economic Security Act to help the company navigate through turbulent times.

It was just one of more than 140 businesses and nonprofits supported by the city’s CARES Act funds this year.

The city first received $6.6 million in May, then a $3.3 million boost in August. With approval from the Spokane City Council, it spread the funds across small businesses, nonprofits, rental assistance programs and child care providers – a division based in part on the priorities laid out by more than 3,300 respondents to a survey conducted by the city this summer.

To distribute $2.4 million grants to small businesses and nonprofits, the city selected LiveStories, a Seattle-based analytics company that launched a new platform called “America Forward” specifically tailored to the economic recovery.

The city focused its support on smaller businesses that struggled to win federal and state relief like the Payroll Protection Program, although receiving other forms of aid did not preclude them from applying.

LiveStories awarded a grant to every small business that qualified under the parameters set by the city, including that it be founded before 2020, have fewer than 10 employees, bring in less than $500,000 in annual revenue, have 10 or fewer employees and be based in the city of Spokane.

The application process was intended to be straightforward.

“When we embarked on the process, I thought this is going to take a long time and not result in anything, and I was pleasantly wrong about that,” Phillips said.

When the pandemic hit, “everything stopped,” recalled Evan Moore, whose college- and career-readiness consultancy business Real Frequency received $8,715 from the city.

It was unclear this spring what colleges would look like when they reopen and what sort of jobs would be relevant in a post-pandemic world.

“It got bonkers, so our big focus was, ‘All right, we have our finger on the pulse, we’re with you every step of the way, we’re here to be a huge stress reducer for you,’ ” Moore said.

Moore said he sat down to apply for the CARES Act grant and calculated what he would “need to eat Top Ramen and feed my team fruits and vegetables for the time being to get us through to what I think will be clearer days.”

The CARES Act helped his small company pivot its marketing strategy and begin taking on clients from around the country. It even paid for the purchase of a new computer, as Moore needed a technology upgrade to handle an increasingly remote business and flood of Zoom calls.

“I’m grateful for it,” Moore said of the grant.

Northwest Organ, which sells and repairs musical equipment, received $20,000. If his business had not entered the pandemic on solid footing, owner Ron Pearson said it would have likely been forced to close.

“It’s certainly not anywhere close to the amount of loss, but it’s better than nothing,” Pearson said.

Mayor Nadine Woodward understands that sentiment, especially in the wake of extended restrictions announced by Gov. Jay Inslee on Tuesday. She was one of several Spokane County mayors to sign a letter sent to the region’s congressional delegation requesting more assistance in November.

“We will need more funds, absolutely,” Woodward said.

LiveStories has traditionally worked with local governments to collect and analyze data that will allow them to be more efficient and transparent. When the pandemic hit, it launched a new program to administer programs like business grants and rental assistance on behalf of governments.

“Cities and counties wanted better management of their process, a more streamlined process and more cost effective,” Adnan Mahmud said, adding his company could analyze data in real time to measure the impact.

Grants in Spokane were awarded to taxi companies, wedding photographers, massage therapists and more.

“I think we tend to go with what we see and what we see is the physical establishments,” Mahmud said. “Your mind goes to retail, restaurants and gyms, but there’s a lot of people who make a living off of running businesses from their home or garage, and they need help too.”

LiveStories reported that 75% of grant recipients had three or fewer employees. The average recipient received 83% of the funding amount they requested, and 47% of the overall funding went to businesses owned by women, minorities or the LBGTQ community.

After distributing nearly $10 million from the CARES Act overall, city officials believe they maximized their relatively small portion of federal funding. They are also confident that if more federal aid makes its way to Spokane, the city is poised to get money out the door faster than in the early months of the pandemic.

City Council President Breean Beggs believes the small team that oversaw the city’s CARES Act funding, which included him, was effective once it got up and running.

“My frustration with us, and I’ll blame myself along with it, is we just didn’t get it out a lot sooner,” Beggs said. “It was a really good process once we started.”

Unlike Spokane County, which received direct federal support because its population exceeds 500,000 , the city was forced to rely on Washington state for its share of CARES Act funding.

As the initial and severe lockdown shuttered businesses, Beggs said the money was desperately needed.

“I just feel like more money sooner would have been better for the economy,” Beggs said.