Business is all about taking risks. And local business organizations such as the Asheville Downtown Association tend to have their fingers on the pulse of potential risks to area entrepreneurs. But last year, even the most commerce-savvy could not have anticipated the far-reaching economic fallout from the COVID-19 pandemic.
“We did the State of Downtown luncheon last year on Feb. 26. We stood in front of about 250 people and talked about how awesome 2020 was going to be,” remembers Meghan Rogers, who heads the ADA. “Yeah — we were wrong.”
While much attention has been paid to the struggles of individual businesses that have borne the economic brunt of the pandemic, Asheville’s business organizations, which provide a critical framework for entrepreneurs to network, collaborate and market their wares, have also taken a hit.
The events of 2020 have pushed those organizations to adapt, and in some cases, to take on innovative roles in response to their members’ needs, even amid their own tightening budgets and financial uncertainties.
As did most businesses, many Asheville business organizations began to feel the economic shockwave of the pandemic last spring when in-person events were either scrapped or made virtual. Rogers told viewers at this year’s virtual State of Downtown presentation that the ADA relies primarily on income from live events like Downtown after Five, its July Fourth celebration and the Asheville Holiday Parade. The loss of in-person events in 2020, she noted, slashed the nonprofit’s revenue by roughly 85%.
Kit Cramer, president of the Asheville Area Chamber of Commerce, says that while her organization has a more diverse set of income streams, it too experienced a financial blow due to lower visitor center gift shop sales and slower fundraising progress. As a result, the chamber cut all staff salaries by 6% and reduced matching retirement contributions by two-thirds.
“Our first commitment to our staff was that we would not lay anyone off, and as a result, we asked the staff to take compensation cuts for both what we do for matching for 401k as well as in their salary amounts,” Cramer explains.
After seeing better-than-expected budget figures early this year and receiving a $250,000 job retention grant from the state, Cramer says, the organization was recently able to offer employees a one-time payment making up for reduced salaries and retirement matches through February. But the reductions will remain in place through at least the end of June.
And the Asheville Independent Restaurant Association, which supports itself through a combination of member dues, sponsorships and the Taste of Asheville event, lost its largest revenue source after discontinuing the AIR Passport. Jane Anderson, AIR’s executive director, says offering the popular buy-one-get-one coupon booklet would have placed too large a burden on participating member restaurants.
“When COVID hit, and we saw it was not going to be a short-term thing, we had to look at the [passport], and our board made a decision that now is not the time to be asking our restaurants to discount anything,” she explains.
As a result, the organization had to furlough a full-time employee in March last year. So far, the nonprofit has not been able to rehire that staffer back. “I’ve been working solo,” Anderson adds.
Despite their losses, all three organizations say that they are being as flexible as possible with their annual membership dues, which range from $125 for small business membership to the ADA to up to $8,000 for the highest-tier chamber membership. Members who are struggling to pay their dues can opt to extend their memberships free of charge or agree to pay at a later date. The ADA also offered complimentary one-year memberships to downtown businesses during the month of March. So far, 36 downtown businesses have taken advantage of the offer.
“We just realized it was more important to have a membership base than it was to have that revenue. Once we talked about it, keeping members and keeping them engaged was more important,” Rogers says.
Meeting the moment
While the COVID-19 pandemic left many entrepreneurs scrambling to keep up with ever-changing rules, it also created an opportunity — and a necessity — for business organizations to shift their roles in support of their members.
“My phone never rang off the hook like it did, especially when there was confusion around some of the ups and downs we’ve had with local regulation,” recalls Anderson, who has led AIR for the last eight years. At one point during the pandemic, she was taking up to 90 phone calls a month, helping members understand capacity limits and alcohol sales curfews.
AIR became a conduit to restaurants for what was going on in the city, the county and the state. “To that end, we were very outspoken when our county either attempted to or did levied restrictions upon us that we felt singled out restaurants as a category of business,” Anderson notes.
Late last year, Anderson says, county officials considered a new curfew on all restaurants beyond the existing 50% capacity limit. AIR pushed back on the proposal and demonstrated that area restaurants were following required safety protocols; the county later backed off the added restriction in what she calls a “major victory.”
“I think if anybody thought that AIR was not an integral part of the community, 2020 would prove otherwise,” says Anthony Cerrato, chef and owner of downtown’s Strada Italiano and the neighboring Social Lounge cocktail bar.
Cerrato, who also served as AIR’s president in 2012, says that the organization has tended to stay out of politics. But the pandemic encouraged the group to leverage Asheville’s restaurant community with a unified voice. “I don’t think AIR maybe had the confidence in the past to give that voice so freely. But now it has been required of them, and I think that it’s setting a precedent for the organization,” he says.
Cramer says that the Chamber has filled an informational role through a series of town halls aimed at employers on a range of coronavirus-related topics, including vaccines, accessing federal Paycheck Protection Program funds and job retention. She also points to the chamber’s coronavirus resource page, which is continuously updated with the latest state and local regulations and resources.
Meanwhile, the ADA took a different approach: injecting funds directly into the pockets of local workers.
“What we heard in 2020 is, ‘We’re holding on, but we need help.’ And that help really means money,” says Rogers. “People needed to be able to pay rent and mortgage and to be able to pay their employees. Those were the biggest concerns I heard over the pandemic.”
Through the virtual Downtown After 5 series and a virtual July Fourth event, the organization managed to pump roughly $60,000 into the local economy by employing area music professionals, food vendors, waste management staff and other workers.
Back to the future
As 501c6 nonprofits, all three organizations now qualify for the latest round of Paycheck Protection Program funding. The new funds will both stabilize the organizations and allow their leaders to think about the future of business.
Cramer says the COVID-19 outbreak has caused the chamber to focus on upgrading its technology to allow for greater flexibility.“We think that the way people work has changed fundamentally,” she explains. “If we have a staff member that needs to be home with a child one day or if we have volunteers who, for whatever reason, decide they can’t be present in a meeting, we want them to have that virtual option as well. That’s the next stage.”
Rogers adds that the ADA plans to diversify its revenue streams. The organization is looking into ways to further activate the Asheville Downtown Association Foundation, an associated 501c3, to apply for new grant funding for some programs. The ADA is also keeping a close eye on pandemic-related crowd restrictions and sharing information with its members. As more people become vaccinated, Rogers hopes that there will be a safe return to in-person events late this year.
“We’re tentatively planning for late summer and fall events, so possibly an August or a September Downtown after Five. Hopefully Oktoberfest and then the holiday parade for this year. That’s tentative of course, a lot will just depend on how we proceed as a country,” she maintains.
The return of tourists back to Asheville, Anderson predicts, will also cause a hiring blitz for area restaurants, which are currently operating understaffed. AIR is preparing to assist its members in employee recruitment and retention to meet the demand.
She says that AIR is also wrapping up a new campaign called AIR Friends, which asks for donations to help support the organization. As of March 25, the effort had brought in about $35,000.
Anderson adds that she anticipates a robust recovery in the year ahead.“We’re very cautiously optimistic. I wouldn’t put so much emphasis on cautiously — we’re very optimistic,” she says.“But obviously during COVID times, you can’t count anything out.”