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Report gives Council options for equity in funding for chambers of commerce

Thursday, October 10, 2019 by Chad Swiatecki

An analysis of city funding of four minority-based chambers of commerce has offered recommendations for City Council and staff on how to adjust those annual contributions in the coming years to make them more equitable.

A report released last week by Economic Development Department Director Veronica Briseño includes the full study and findings from the consulting group Sabre Development that was commissioned in response to Council wanting to look at new ways to determine funding amounts for the Austin LGBT Chamber of Commerce, Greater Austin Black Chamber of Commerce, Greater Austin Hispanic Chamber of Commerce, and the Greater Austin Asian Chamber of Commerce.

Those groups – collectively known as the Multi-Ethnic Chamber Alliance, or MECA – have for years received differing contract payments for performing similar services as part of their eligibility for city funding. That disparity prompted the Economic Prosperity Commission to request the creation of a standard formula for determining funding for the groups, which have differing membership levels and represent different-sized portions of the city’s population.

The study offered five recommendations for the city to consider: 1) Add a new equity factor, such as decreasing population, to the funding model or remove one from the model; 2) change the equity qualifications such as race or population; 3) add a new equity-based organization such as the Disability Chamber of Commerce to the model; 4) decrease by a set amount the city’s funding to non-MECA chambers to add more equity funding; or 5) increase the proportion of total chamber funding directed toward equity.

In the current budget the city spent just over $1.2 million total to fund various chambers of commerce, with 61.2 percent of that total directed toward MECA groups for a total of $739,750. Based on factors such as area population, race, and income and education levels, the funding to those groups varied widely. The Hispanic chamber received more than $254,000 while the LGBT chamber received just over $100,000, despite the groups having similar functions and contract requirements.

In meetings last week with the groups, Briseño said Council is expected to consider and possibly adopt the report in November. The city’s current contracts with the groups are set to expire early next year, though current funding levels are set for another year and a consultant has been hired to help the MECA groups make the transition to whatever new funding matrix is created.

The need for special considerations in resources provided to minority groups was highlighted in the report using a 2018 finding by the city’s Community Advancement Network: “There are stark differences in educational attainment levels and median family income by race and ethnicity. … Approximately one-fourth of black and Hispanic/Latino adults over the age of 25 have a bachelor’s degree, and this contributes to lower incomes for these groups.”

Leaders from the MECA groups have just begun to process the possible changes in how city funds are allocated in coming years.

Marina Bhargava, chief executive officer of the Asian chamber, told the Austin Monitor she was waiting for her board to fully review the report, but said she has questions about some of the demographic data used. She said placing more emphasis on services provided to set funding levels could create improper incentives that would cause chambers to alter their operations and programming to game the funding matrix.

Tina Cannon, executive director of the LGBT chamber, said the study’s practice of not considering her group’s racial diversity and zeroing out the race portion of its scoring could actually widen the funding gap if Council adopted that criteria. She said Council will likely have to adopt a hybrid from what’s recommended if the goal is to create true equity.

“This puts Council in an awkward position because they wanted to find a middle ground, with the goal at the end being equity in how the MECA groups are funded,” she said. “The end result of what’s in the report doesn’t get them there.”

Photo by Will Hastings made available through a Creative Commons license.

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