In NYC, 63% of organizations received loans under $150,000 compared to 80% of all arts and culture organizations in the US. While the cost of living is higher in NYC than many other parts of the country, the average number of employees signify that larger organizations, compared to the sector as a whole, were primary recipients of PPP funds in NYC, averaging $15,078 per job supported.

Our NYC COVID-19 impact study identified reported job losses totaling over 15,000, which shows the extensive need for additional resources as PPP loans only supported 8,420 jobs.

Who didn’t receive funding? What about equity in funding?

One of the difficulties with PPP became evident as smaller organizations, and generally those with fewer connections to the banking community, had more trouble applying for and receiving funds. The SBA has not released data on applicants who did not receive funding, but through media coverage and responses we observed during our NYC study, many smaller organizations had greater difficulty navigating the system than more established organizations and for-profit enterprises.

The SBA noted in their press release that “27% of the program’s reach [was] in low- and moderate-income communities, which is proportional to the percentage of population in [those] areas.” However, since the SBA did not disclose the names of the organizations receiving loans under $150,000, it is difficult to assess what entities in those communities received the funds. Did community-focused organizations receive funds or did restaurant franchises? We just don’t know.

Within our study of COVID-19 impact in NYC, we focused some attention on organizations located in areas of the city described as “Low Resource” in the 2017 Social Impact of the Arts study conducted by researchers at the University of Pennsylvania. These areas are defined by “lower-income neighborhoods with fewer cultural resources.” While low response rates from organizations in those communities prevented us from fully exploring their COVID-19 impacts, there was some evidence that small and community-based organizations experienced severe impacts, and that organizations located in Low Resource areas are represented at higher levels by small and community-based organizations.

In relation to the SBA’s note that 27% of the program’s funds reached low- and moderate-income communities, 7 nonprofit arts and culture organizations in Low Resource areas of NYC received $3,962,323 ($566,046 on average) to preserve 428 jobs (61 on average). Of those 7 organizations, 3 organizations received loans over $150,000 and 4 received loans under $150,000. Those smaller loans supported a total of 28 jobs for a total of $196,097. This shows that the significant portion of PPP funds in Low Resource areas benefitted larger organizations. While we cannot fully report on which organizations received the loans in these areas, it is clear that equitable distribution of funds is a central question that must be addressed in future funding programs to ensure smaller, community-focused organizations have access to needed capital.

What now?

The PPP data provided by the SBA is very helpful in starting to assess who has received funding and how it has potentially helped our sector. With it, we can parse loan data by location, sector, and many other variables. However, many aspects of the program continue to be shrouded in mystery, preventing us from knowing the full extent to which organizations received loans, the exact amounts of large loans, and how the application process may have perpetuated inequities in who had access to the banking system.

Beyond access to this data, a singular program like the PPP cannot be the only resource made available to keep organizations afloat. During our NYC study, one respondent noted the benefit of receiving a PPP loan, but was concerned that even with the assistance, they would not be able to sustain operations after June 2020 without additional support. In another report we released in June, we estimated, based on data available at the time, that the nonprofit arts and culture sector can expect a roughly 26% deficit from March 2020 through February 2021.

As COVID-19 continues to ravage the United States in many ways, public and private funders alike must address the needs of the nonprofit arts and culture sector if it is to remain sustainable. The PPP program has been beneficial to many organizations, but as uncertainty lingers and closures continue indefinitely, more must be done to preserve the sector and give us hope for a vibrant future.