What is a Chamber of Commerce?

With statistics indicating that only half of small businesses survive to their fifth year of operation, business owners would be thrilled to be part of an organization that looked out for their interests and took steps to ensure their success. This hypothetical organization could function as a central body that gathered small-business owners and represented their collective needs through fundraising, lobbying efforts and advocacy. Luckily for businesses, there is such an entity—their local chamber of commerce. But what is a chamber of commerce, exactly?

If you’ve ever attended a ribbon-cutting ceremony for a new business in your community, or paid money to attend a charity golf tournament benefiting a new wing at the local hospital, there’s a good chance your town’s local chamber of commerce was a driving force behind the event. That’s because chambers of commerce exist to advance the interests of small and local businesses.

What is a chamber of commerce?

It’s “a nonprofit organization that is the voice of the business community in a city, town, state or nationally,” said Pete Havel, the former regional executive director for the U.S. Chamber of Commerce.

With that in mind, a brief history lesson will give you a better idea of what a chamber of commerce is and why they exist.

In 1912, America was in a period of furious growth and development. City skylines soared, the automobile was becoming commonplace and new businesses were popping up left and right. But business owners and policymakers alike quickly realized that the country lacked unity between these burgeoning industries and its rapidly growing federal government. In response, the U.S. Chamber of Commerce was born with the goal of increasing business representation in Washington.

It’s important to note that like any large political organization in America, the U.S. Chamber of Commerce is not without its detractors. Critics argue that chambers tend to only serve members who have the most money, despite saying they serve all businesses. This criticism has largely been aimed at the national Chamber, which has also come under fire for politicizing business issues.

Indeed, many large corporations have broken ties with the U.S. Chamber of Commerce over its stance on climate change. Many businesses, both small and large, believe government regulation is needed to reduce emissions from carbon plants—and while the Chamber now agrees with scientific consensus on climate change, its response to the issue is still decidedly anti regulation.

All that said, local chambers of commerce often don’t face the same political firestorms as their larger, national counterpart. The majority of local chambers of commerce are working for the good of the people and the businesses they serve.

What does a chamber of commerce do?

Today, most cities and towns operate their own local chamber of commerce as an extension of the U.S. Chamber of Commerce. According to Havel, local chambers can tap into the strength of the U.S. Chamber to fight for the interests of the business community. While they can and do leverage the national Chamber’s considerable resources, local chambers of commerce are appropriately focused on local businesses.

Small businesses help stimulate the local economy, provide job opportunities and increase a town’s tax base. Recognizing this, local chambers of commerce do everything in their power to keep these businesses afloat and help them overcome the challenges they face. Some of the things local chambers of commerce do to achieve that goal, according to Havel:

• Advocate legislation. When business owners are too busy to go to city council meetings or the state legislature, chambers can pool the collective influence of their members and speak on their behalf.
• Develop the economy. Chambers can be on the frontlines of keeping businesses in communities and can also serve as recruiters of businesses looking to relocate. They can also alert their members to opportunities that can lead to new collaborations between members or the public sector that can create jobs.
• Collaborate. Local chambers serve as a focal point in the community to support decision-makers. Job creators often know how to lead and have the respect of others in the community. The chamber basically acts as a megaphone for people who invest in the community.
• Facilitate networking. When a business wants to increase its customer base, there’s no better place to meet new people than at chamber events.
• Help with marketing. Just about every chamber has a weekly or monthly newsletter and communicates with its members constantly. Chambers can help businesses find new customers.

What’s more, consider this finding from a study conducted by The Schapiro Group for the Association of Chamber of Commerce Executives (ACCE): “When consumers know that a small business is a member of the chamber of commerce, they are 49% more likely to think favorably of it and 80% more likely to purchase goods or services from the company in the future.”

What does a chamber of commerce do for citizens?

Clearly, being part of a chamber of commerce can benefit businesses. But what about everyday citizens? An example of a local chamber of commerce achieving net-positive outcomes for citizens is Loudoun County, Virginia. In this affluent suburb, residents trade high taxes and long commutes via car into D.C. for higher-paying salaries.

One answer to the problem was to extend D.C.’s Metro system to Loudoun, reducing the county’s commuter gridlock and helping residents avoid exorbitant tolls on local roads and beltways by adding another commuting option. But the decision was hotly contested, as most believed covering the cost of the rail extension would only exacerbate the problem of high taxes.

Loudoun Chamber of Commerce CEO Tony Howard explained how delicate the situation was. “When the vote went to the Board of Supervisors, it was perilously close to being denied,” he said.

“But the Chamber, recognizing the immense value of having the Metro come to Loudoun, sat down with businesses along the proposed corridor, and worked out a plan that would prevent Loudoun County residents from having to pay higher taxes for the Metro. That swayed the vote in favor of it.”

In summary, your local chamber of commerce is working behind the scenes in your city or town to stimulate the economy and attract more businesses and resources. This makes it easier for businesses to succeed, and you’ll benefit from local options without traveling far. The next time you see or hear of a fundraiser, charity event or speaker series presented by your local chamber of commerce, it may be worth your time to learn more.