The African American Chamber of Commerce of Wisconsin has just three months to spend its approximately $2.7 million in federal COVID relief dollars before the money is returned to the state — unless it gets an extension.
And it’s not the only one. Just three of the 38 Wisconsin organizations that were awarded funding to support small businesses through the federal American Rescue Plan Act have used their entire grant.
The program, known as the Diverse Business Assistance Grant, was announced by Gov. Tony Evers nearly three years ago. Through the program, the state awarded $73.5 million to various chambers of commerce and nonprofits to help small business owners and underserved communities disproportionately affected by the pandemic.
But some business owners have been disappointed by the lengthy and sometimes confusing process.
Meaghan Bertram applied to the African American Chamber of Commerce for a grant to cover marketing and photography costs for her business Refresh Vintage.
She submitted her application to the chamber in September 2023 and received her award letter in February, but didn’t receive the grant until July, emails show.
“From the amount of forms needed for the application to the delays in communication, it was like pulling teeth to get any updates, confirmation or distribution from them,” Bertram told Public Investigator.
Now, the clock is ticking for the chamber and others. So far, about $42.8 million of the $73.5 million has been spent, according to the state Department of Administration, which administers the grant. The state’s deadline to spend the funds is Dec. 31.
Nikki Purvis, president and CEO of the African American Chamber of Commerce, said the chamber has been slow to distribute the funds because it is “new territory.”
“We want to make sure that we are handling these funds with care,” Purvis said. “When we’re audited, we want to make sure that there aren’t any issues for our organization or any grant recipients that receive these funds.”
The chamber was awarded the maximum grant of $5 million and received its first disbursement early last year, according to state records. As of this February, it had used $2.3 million and disbursed funds to 15 businesses.
Purvis said the chamber opened its first round of applications last September, distributing $195,200 to businesses such as Vibez Creative Arts Space, Empowering Wealth Coaching and the Classic Shoppe, a clothing store. The chamber also used about $1 million from the grant internally, she said.
According to Purvis, the chamber received 340 applications, and its selection committee struggled to review them all while scrambling to create new policies and procedures.
The chamber plans to do another three rounds, Purvis said. The second round will be announced in the “next couple of weeks” and include about 60 businesses that will receive an estimated $690,000.
The chamber is asking the state to extend its deadline to June 2025, Purvis added.
“It’s a new way for us to step into providing access to capital in a way that could be transformative, not only for our organization, but for our members,” Purvis said.
Other ARPA programs have also seen delays
Glencora Haskins said she isn’t surprised community organizations like the African American Chamber of Commerce are having difficulty allocating their funds. Haskins is a research associate for Brookings Institution, a think tank based in Washington, D.C. that has been tracking how local governments invest ARPA funds.
She said it’s a tall order for organizations that are, in many cases, receiving millions of public dollars for the first time without the infrastructure or experience of working with large grants.
“When we talk about small businesses or community organizations, these are places that don’t necessarily have dedicated financial people that know their way around submitting grant applications or navigating this process,” Haskins said.
For example, in addition to reviewing applications, Haskins said the African American Chamber of Commerce had to keep up with the state’s administrative tasks. The state requires filing semi-annual reports, complying with audits and more.
The City of Milwaukee has faced its own challenges using up ARPA dollars meant to tackle gun violence.
And awardees have also been found misusing funds. In 2023, one nonprofit owner was ordered to pay back about $800,000 after it was discovered she spent the public dollars on a $2,000 bowling party and other ineligible expenses, according to Wisconsin Public Radio.
As a result, the ARPA program has been a learning curve for local and federal governments, Haskins said.
“It is important for the federal government and state governments to recognize that simply dropping resources in people’s lives is not automatically going to mean that all that funding gets distributed,” Haskins said. “There should also be support structures.”
The Department of Administration is approving extension requests on a case-by-case basis, said spokesperson Tatyana Warrick.
Regardless, all funds must be used by the end of 2026, Warrick said. Unused funds will be returned to the federal government.
More:Sense of unease surrounds slow spending of pandemic aid on violence prevention in Milwaukee
Other grantees almost done disbursing funds
Business owners who received grants from the African American Chamber of Commerce shared a mixture of feelings about the process.
Ebony Ramey, owner of Ebony Esthetics, is the first entrepreneur in her family. She says the $20,000 grant from the chamber helped her business tremendously. She used the funds to build a website and cover marketing and branding for her esthetician services.
“It was a longer process than I had anticipated, but I do realize that it was a difficult process for them,” Ramey said.
It took about five months for Catrina Clayton, the owner of Fly Nails, to receive her grant from the chamber, she said. She submitted her application in October 2023 and was awarded her grant in March.
Nonetheless, Clayton said the funds arrived on time for her to cover the costs of construction.
“It definitely came right on time for my business,” Clayton said.
Still, many organizations are further along than the African American Chamber of Commerce, Public Investigator found.
The Wisconsin Black Chamber of Commerce has already allocated all of its $5 million grant, said CEO Ruben Hopkins. He said the chamber has been able to impact more than 1,500 Black and minority-owned businesses through the grant.
For example, the chamber allocated $100,000 to create the Black Restaurant Group, which helps Black-owned restaurants improve their customer service. The chamber invested another $650,000 in startups and small businesses that finished a business bootcamp. It also hosted pitch competitions and showcases to spotlight other businesses, Hopkins said.
The Hmong Wisconsin Chamber of Commerce also divvied out its nearly $3.4 million grant quickly and with ease, according to CEO Maysee Herr.
The chamber set aside just under $1 million of the grant for filling leadership positions, Herr said. The chamber is asking the state for an extension of a couple of months to finish spending those funds.
Some awardees noted that they received their funds from the state later than expected.
The Hmong Wisconsin Chamber of Commerce expected to have three years to spend the Diverse Business Assistance Grant, according to Herr. But the chamber didn’t receive its grant dollars until spring 2022, she said.
“If there are those who are asking for an extension on these grants, I think that has to be taken into consideration,” Herr said.
Gina Lee Castro is a Public Investigator reporter for the Journal Sentinel. She can be reached at gcastro@gannett.com.
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