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Today, the NAACP Legal Defense and Educational Fund, Inc. (LDF) sent a letter to Tennessee Governor Bill Lee over concerns that the Business Relief Program, meant to distribute funds the state received from the Coronavirus Aid, Relief, and Economic Security (CARES) Act to small businesses facing financial hardship caused by the pandemic, will adversely impact Black-owned businesses most in need of assistance. The letter asks that the program’s funding formula be updated to address the disproportionate effects of COVID-19 on Black-owned businesses and better support businesses most in need of assistance.

Currently, the CARES Act’s funding formula bases payments on annual gross sales. Black-owned businesses, which are key for wealth-building and essential to the economy, have been disproportionately impacted by the COVID-19 pandemic. According to a study by the University of California at Santa Cruz, 40% of Black-owned businesses are likely to face permanent closure due to factors like systemic credit discrimination, thinner profit margins, and lack of significant financial savings. By basing payments on annual gross sales, the Act’s current formula will further exacerbate this impact and directly benefit white-owned businesses. It is crucial this formula is updated so that funds, which are scheduled to be distributed this week, are issued in a fair and equitable manner.

Read LDF’s letter to Governor Lee here.

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Founded in 1940, the NAACP Legal Defense and Educational Fund, Inc. (LDF) is the nation’s first civil and human rights law organization. LDF has been completely separate from the National Association for the Advancement of Colored People (NAACP) since 1957—although LDF was originally founded by the NAACP and shares its commitment to equal rights. LDF’s Thurgood Marshall Institute is a multi-disciplinary and collaborative hub within LDF that launches targeted campaigns and undertakes innovative research to shape the civil rights narrative. In media attributions, please refer to us as the NAACP Legal Defense Fund or LDF.

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