Accounting firm helps community rebuild after riots

Who picked up the pieces after a Minneapolis neighborhood was partially destroyed in June 2020, in the wake of the George Floyd murder?

It has been nearly two years since George Floyd suffocated to death under the knee of Derek Chauvin, then a senior police officer and now a convicted murderer. The community outcry that immediately followed Floyd’s death rapidly deteriorated into neighborhood mayhem and destruction. Minneapolis’ s Lake Street neighborhood , populated by small businesses, many started by immigrants, was hardest hit.

Just a couple of miles away, senior staff at accounting firm Lurie LLP, watched in horror. They were not just familiar with the Lake Street neighborhood. Its primary economic development agency, The Lake Street Council, was connected to Lurie through its board. The board member, a longtime Lurie client, asked if Lurie could provide some just-in-time help to the nonprofit, which was suddenly in the spotlight. Fortunately, Becky Munson had recently joined Lurie with the aim of developing small-business accounting and technology services. But it was her experience in advising nonprofits that was urgently relevant to the Lake Street Council. As Lurie supported Munson in the rapidly escalating challenge of managing the donations that flooded in, the firm’s longstanding reputation as a community leader rose accordingly.

Lurie’s response was immediate, authentic, on-brand and a compelling model for other CPA firms.

Lurie’s leaders didn’t go into a huddle to figure out what kind of statement they’d put out about the Floyd crisis. They didn’t have to negotiate internal consensus as to how much they would invest in helping the Lake Street Council with its sudden riches and commensurate responsibilities. They didn’t debate the potential political fallout of being associated with a clearly volatile scenario that was likely to be controversial for months.

Lurie realized that its small relationship with the Lake Street Council was going to have a very big impact on stabilizing, then rebuilding, the neighborhood, and with it, repairing its home city. The firm’s immediate and unequivocal response intuitively reflected the key elements of trust, as outlined in a new report by PwC. Everyone — consumers, employees and business associates — agrees that “ethical business practices” are foundational to establishing and continuing trust in an organization, according to the study. Business associates and employees also put an especially high value on “going beyond commitments,” “addressing income inequality” and “balancing corporate profit with purpose.”

Lurie’s actions pressed each of these key factors.

Right from the start, the Lake Street Council’s executive director, Allison Sharkey, realized that she needed a financial and fiduciary SWAT team. A simple appeal through the council’s website triggered millions of dollars in donations. But the very wording of the quickly written appeal had an immediate financial trap: the credit card processing fees rapidly passed six figures. At the time, the council’s annual budget was $500,000. “That was a moment of panic,” said Sharkey, “when I realized that the processing fees were nearly equal to our annual budget.”

The money kept pouring in. “There were literal physical buckets of money in the post office. Checks just sitting there, piled up because of delayed mail delivery because of COVID and because of the riots,” said Sharkey. “We went from being a four-staff, half-million-dollar-budget to $12 million in just a few weeks, and we had to sort through that money and handle it properly. That’s as far as we thought.”

Munson quickly helped Sharkey course-correct the way that donations were solicited and received to ensure that the money was handled properly.

Realizing that donations triggered by a high-profile event were sure to trigger a correspondingly high level of scrutiny from the media and community members, Sharkey and Munson deployed practices that would support maximum transparency and accountability.

Lurie expanded Munson’s role to virtual director of finance and the relationship transitioned to a traditionally structured engagement. The Lake Street Council navigated through the transition to its cornerstone role in the neighborhood’s restoration.

It’s easy for firms to dabble in community projects, “giving back” by painting a few fences or picking up trash from a stretch of adopted highway. As Lurie’s experience shows, it takes a proactive, substantive investment in relationships and missions to be on the financial SWAT team when a community crisis calls for the kind of steady guidance that only financial professionals can provide.