Federal economic development policies and programs have long played a critical role in fostering opportunity and resiliency for small businesses. The COVID-19 pandemic and resulting economic impacts reminded us of the fragility of small businesses, particularly those owned by economically disadvantaged individuals and those located in disinvested urban and rural communities.

Appropriately, the Department of Commerce’s Economic Development Administration (EDA) received $4.5 billion in supplemental funding – over 10 times its current annual appropriations level – to bolster its role in supporting businesses and communities struggling to recover from the economic impacts of COVID 19, enabling the EDA to demonstrate in real-time that there is unprecedented demand for their investments.

For the first time since its inception, the EDA has also committed to include an equity lens in all of its investments.  The EDA identifies equity – which it defines as investments that directly benefit underserved populations and underserved communities – as the highest priority on its list of investment priorities released in the spring of 2021.

We applaud the EDA’s commitment to equity but also recognize that, historically, its programs have generally not targeted those populations or communities with the intentionality needed to meet their needs. EDA’s recent blog post recognizes the need to equitably direct investments and recognizes there is “more that can be done and more to learn… [to] provide more underserved communities and populations much needed resources and to continually evolve our programs to be accessible and best meet those communities’ needs.” With efforts underway to reauthorize the agency for the first time since 2004, it is clear not only that EDA needs significantly higher authorized funding levels (industry advocates are calling for $3 billion annually) but that its programs need to be better aligned to enable economically disadvantaged businesses and communities to flourish.

LISC is therefore calling on Congress to include the bipartisan Revitalizing Small and Local Business Act (RSLBA) as a critical component of the reauthorization of the EDA. The legislation (S.3340/H.R.7451), introduced by Senators Padilla (D-CA) and Wicker (R-MS) and Representatives Carter (D-LA) and Guest (R-MS), includes resources for national nonprofits to provide core operating support, technical assistance, and training to networks of Business District Organizations (BDOs) working on the ground in underserved rural communities and urban neighborhoods.

Read the full article about economic development by Matt Josephs and Michelle Harati at LISC.