The Role of Chief Equity Officers in Advancing Racial Equity with ARPA’s Local Fiscal Recovery Funds

Within the past decade — and accelerating after the Covid-19 pandemic and outcry against systemic racism following the murder of George Floyd — an increasing number of local governments have created new leadership positions focused on diversity, equity, and inclusion. Often holding the title of chief equity officer, or CEO, these leaders work to embed an equity approach throughout government operations and orient local policymaking to address systemic racial inequities. They do so by supporting their jurisdictions in conducting data-informed and participatory analysis of how government practices may create barriers for people of color and other marginalized groups, and identifying solutions. They also work to ensure that all residents receive the full protections and benefits of government and that the jurisdiction’s staff and vendors reflect the diversity of their communities.

The American Rescue Plan Act of 2021 (ARPA) created an important opportunity for local governments — and chief equity officers — to operationalize equitable government through new public investments made possible by federal funding. ARPA’s Coronavirus State and Local Fiscal Recovery Funds provided an unprecedented $130 billion in flexible resources to cities and counties to spend over five years to address the immediate economic and health impacts of the pandemic and rebuild stronger, more equitable economies. Building upon the Biden Administration’s January 2021 racial equity executive order, US Treasury guidance for the Coronavirus State and Local Fiscal Recovery Funds recommended targeted investments in the people and communities disproportionately impacted by the pandemic and systemic racism.

Building on the equitable investment framework shared in the PolicyLink report, 10 Priorities for Advancing Racial Equity Through the American Rescue Plan Act: A Guide for City and County Policymakers, PolicyLink and the Institute on Race, Power and Political Economy at the New School have been engaged in a multiyear project tracking whether and how local governments are using their ARPA funds to further equity. One set of questions we are asking — and the focus of this brief — relates to the internal equity infrastructure of municipalities: Did places that have chief equity officers (CEOs) or CEO-like staff positions have equitable processes of deciding how to allocate the resources?1 And, did this result in equitable investments?

To better understand the role of chief equity officers in ARPA decision-making, PolicyLink partnered with the Government Alliance on Race and Equity (GARE) to conduct an anonymous survey of CEOs about their engagement in the ARPA decision-making process and whether equity was prioritized (see the survey questions below). The survey was conducted between November 17, 2021, and February 25, 2022, and it was completed by 26 CEOs working in cities and counties located across the country, along with one CEO working in state government. While the full universe of CEOs is unknown, we believe this represents at least 10 percent of the total CEO population, since 103 CEOs participate in GARE’s working group. GARE’s working group likely represents a large share of CEOs nationwide given GARE’s foundational role in the movement for equitable local government. We then shared, discussed, and validated the interim results of the survey with about a dozen participants in the November 2021 meeting of GARE’s Chief Equity Officer working group, which is dedicated to peer learning and problem-solving.

Key findings

Most chief equity officers were involved in deciding how to allocate ARPA State and Local FIscal Recovery Fund resources and felt they had some level of influence in the process. However, in some places, chief equity officers were excluded.

We found that a large majority of chief equity officers were always (19 percent) or usually (50 percent) involved in decision-making related to allocating the ARPA resources. But 31 percent of CEOs were never or rarely involved. One CEO, for example, described being given their jurisdiction’s draft recovery plan performance report (which large jurisdictions are required to submit to the US Treasury) to review and sign off on within a short timespan, without having been engaged in the process.

Most CEOs felt that they were somewhat (46 percent) or slightly (27 percent) influential in the process, including all of those who were always or usually involved in the process. Only two of the CEOs felt they were very influential in the process. Among the 19 percent of CEOs who said they had no influence on the process, all but one was never involved in the process and one was rarely involved.

Level of Involvement in Decision-Making Related to Allocating ARPA Funds (%)Extent of influence on allocation of ARPA funds (%)

More than half of chief equity officers believed that equity was a top priority in allocating ARPA resources.

The majority of chief equity officers said that equity was a top priority (58 percent), while 31 percent said equity was somewhat a priority in the allocation of ARPA funds. Only one CEO said that equity was a low priority in ARPA decision-making.  

Under half of the chief equity officers (42 percent) said their jurisdictions used racial equity tools to determine how to allocate resources.

In describing what racial equity tools were used, CEOs mentioned:

• Analyzing data disaggregated by race, gender, neighborhood, and other demographic and socioeconomic characteristics, to prioritize the most impacted communities
• Using a formal evaluative tool, such as a racial equity budget tool or a set of equity-focused questions, to assess or score proposed projects
• Prioritizing specific impacted/underinvested neighborhoods
• Engaging impacted communities to hear directly about their needs through surveys, information sessions, outreach, and focus groups
• Setting out guidelines for potential grantees to prioritize impacted communities 

We also asked the CEOs if their jurisdictions had Racial Equity Action Plans and whether their ARPA allocations aligned with those plans. Eleven of the CEOs (42 percent) said their jurisdictions had Racial Equity Action Plans, but only four of the 11 CEOs said that their ARPA allocations aligned with the plans, indicating a disconnect in some places between these plans and recovery investments.

Most chief equity officers (69 percent) thought their jurisdictions had made ARPA investments that would advance equity in their communities.

Equitable ARPA investments highlighted by CEOs included an array of investments related to affordable housing (e.g., homelessness assistance, rental assistance, eviction prevention and legal defense, homeownership assistance); childcare business development; guaranteed income; children’s savings accounts; workforce development; hazard pay for frontline essential workers; youth programs; transportation and water infrastructure; broadband; free bus service; mobile health resources; and support for nonprofits. CEOs also mentioned using participatory budgeting processes to ensure equitable investments. One CEO described making an “equity navigators” investment, hiring trusted community members to ensure programs are connected with impacted communities while giving the city feedback on the barriers being experienced by residents and how to address them.

In response to our question about what it will take to ensure equitable allocation of remaining ARPA resources, CEOs described the importance of support from political leadership (“commitment and action from those in positions of authority to put equity front and center”), remaining aligned with official equity principles/commitments/definitions, and continued reliance on data-driven approaches, equity tools, and community engagement to prioritize investments. CEOs also lifted up the importance of internal procedures and structures, such as having the CEO present to the city council about ARPA plans and progress at weekly meetings and having an engagement coordinator explicitly focusing on reaching communities of color. They also emphasized the importance of equity accountability throughout project implementation. As one CEO put it, “We need to identify what kind of support the BIPOC organizations need, develop RFPs with community input, and follow up to ensure the execution of the programs are delivering equitable outcomes.”

Chief equity officers described capacity constraints, continued application of an equity approach, and insufficient funding in relation to need as key challenges to equitable ARPA implementation.

Chief equity officers described various challenges related to their internal capacity to allocate resources equitably, including the lack of clear definitions of racial equity and the varying capabilities of applying equity concepts and tools to decision-making across departments, staff, and council members. For many jurisdictions, equity is a new focus and they are in the process of adopting new equity tools. One CEO explained, “We are still in the infancy of our racial equity work and this challenges us to go fast.”

Capacity is also a challenge in relation to community partners as fund recipients. Many community-based organizations grew quickly throughout the pandemic because of their ability to deliver services and information to vulnerable residents, and it is not clear whether they have the infrastructure and capacity to lead on larger, ARPA-supported projects while complying with significant federal reporting requirements. One CEO described how “many of our community members are afraid this is too much money, too fast, from too many entities (city, county, and state) and will cause confusion and chaos in the partnerships that they have been developing.”

CEOs also pointed to the challenge of centering equity throughout implementation. While selecting equity-focused investments is critical, it is only the first step and whether these investments deliver tangible benefits to impacted communities depends on how they are implemented. One CEO noted that their “biggest equity concern is making sure that city systems that are in place to award funding are equitable. For example, will the dollars allocated for homelessness end up in the hands of Black and Brown-led organizations that can better engage and tackle the issue, or will it be dominated by larger white-led agencies?”

A third key challenge raised by CEOs is the level of funding in relation to needs. While the ARPA resources were significant and unprecedented, they pale in relation to the amount of funding needed to meet resource demands from the community and address inequities at scale. As one CEO put it, “There are not enough funds to address root causes that will continue to exacerbate existing inequities.” Other CEOs described how there were far more project proposals than funding.

Other challenges mentioned by CEOs included weak political commitment from the top, lack of trust between Black, Indigenous, and people of color community organizations and local government, confusion over the ARPA process and timing of disbursement, tracking and evaluating impact, and the ability of influential large businesses and longstanding stakeholders to capture ARPA funding to further their business interests.

Recommendations

This research illuminates the important role that chief equity officers, as internal equity experts, can play throughout the process of public investment — from ensuring that equity principles and the voices of impacted communities are centered in the initial decision-making about what investments to make, to carrying equity throughout the implementation and evaluation process. It also elevates several areas of weakness that should be addressed to ensure equitable ARPA investment:

• Local governments should maximally leverage their internal equity resources. The exclusion of some CEOs from the ARPA decision-making process, as well as the limited influence that some CEOs had in the process, signals that local governments are not always effectively using their equity staff. Chief equity officers have an important and challenging role in institutional transformation: changing the behavior of large and complex institutions is difficult in general, and CEOs are tasked with tackling ingrained institutional racism, which is perpetuated by individual racism and unconscious bias among city staff. When CEOs are excluded from a consequential decision-making process, it demonstrates the jurisdiction’s lack of commitment to equity. Local governments need to engage CEOs in high-level decision-making and ensure they have the staff, resources, and support needed to be effective in their roles.

• Technical assistance and public reporting of investment performance will be valuable in ensuring the equitable Implementation of ARPA resources. Many CEOs described the importance of maintaining a focus on equity throughout the lifespan of the investment and across all of its facets. They also described how public reporting on the progress of investments is critical to evaluating equity performance and making accountability possible. Technical assistance with implementation and evaluation is an important support that the federal government, state governments, and philanthropy can coordinate to assist localities in maximizing equity returns on these precious public investments. The federal government has a successful track record of implementing technical assistance for local grantees such as through the Sustainable Communities Initiative and the Affirmatively Furthering Fair Housing Assessment. Technical assistance on ARPA implementation can and should be coordinated with assistance for other federal investments including the American Jobs and Infrastructure Act and the Inflation Reduction Act. Equitable contracting and anti-displacement strategies, for example, will be critical to realizing the goals of equitable development through these public investments. Including community-rooted institutions as full partners in these processes, with sufficient staffing to consistently engage effectively, is a necessary and frequently overlooked success factor.

• Support localities in continuing to strengthen their internal equity infrastructure. This research builds on our initial analysis of the ARPA investments of large cities, which suggested that the presence of dedicated equity staff along with other mechanisms for institutionalizing equity concerns in local policymaking (equity plans, principles, policies, frameworks, and tools) was making a positive difference when it came to equitable ARPA investments. Localities are in the early stages of integrating equity tools and processes across their departments and agencies. Additional financial resources, technical assistance, data systems support, and research/evaluation will help local governments effectively make these tools a regular part of their operations.

1 Some municipalities have high-level staff dedicated to advancing equity in local governments with other titles than chief equity officer (CEO), such as “equity director and human rights coordinator” or “chief of equity and inclusion.” In this brief, our reference to CEOs includes these other CEO-like positions.

Chief Equity Officer Survey Questions

1. How involved were you in decision-making related to allocating the ARPA State and Local Fiscal Recovery Fund resources?
2. How much influence did you have on the allocation of ARPA State and Local Fiscal Recovery Fund resources?
3. To what extent was equity prioritized by the city/county in allocating these resources?
4. Did your city/county use racial equity tools to guide the allocation of these resources?
5. Please describe how the city/county used racial equity tools to guide resource allocation.
6. Does your city/county have a racial equity action plan?
7. Did the city/county allocate ARPA resources according to the racial equity action plan?
8. Are there specific ARPA investments that will advance equity in your community?
9. Please describe these specific ARPA investments that will advance equity in your community.
10. Has your city/county allocated all of your ARPA resources?
11. What will it take to allocate the additional resources equitably?
12. What do you see as the key challenges to allocating ARPA resources to advance racial equity?
13. Is there anything else we should know about your city/county’s ARPA allocations in relation to advancing racial equity?
14. What is the name of city/county? (optional)