Starbucks announced earlier this month the launching of an in-store donation campaign that aims to assist in funding small business loans across the country. The fundraising campaign, called “Create Jobs For USA” was rolled-out in collaboration with Opportunity Finance Network (OFN), a national network of private financial organizations that are wholly devoted in bringing affordable and responsible loans to assist low-wealth, low-income communities.
“Small businesses are the keystone of America’s economy, employing over half of the country’s private sector workers—but this significant jobs engine froze in the past years,” said Howard Schultz, Starbucks chairman and chief executive. “We have to thaw the credit channels so that small businesses in communities can start hiring once again.”
Starting November 1, the fundraising project will start accepting donations at its website, CreateJobsforUSA.org, and with any of Starbucks’ apron-clad servers in its approximately 6,800 cafes in the country. Donors who will shell out $5 or more will receive a red-white-and-blue wristband with an inscription that says, “Indivisible.” Starbucks Foundation is also shelling out a $5 million donation as seed fund, saying that all proceeds shall go to the OFN to help fund loans to small businesses.
The unemployment rate in the U.S. has gone up to 9.1 percent despite extensive stimulus initiatives from the government. Starbucks, with its omnipresent stores across the country, says that it would now attempt to apply its own mini-stimulus. It shall cover OFN’s administrative expenses and the cost involved in producing the U.S-made wristbands. Every $5 donation to the fund generates $35 to finance small businesses, commercial estate projects, nonprofit groups as well as affordable housing.
Mark Zandi, chief economist at Moody’s Analytics, said, “the fund will definitely be valuable to small businesses that have been having difficulty securing loans in today’s hard-hitting economic climate.“
Schultz, who recently concluded a distressing but successful company turnaround that entailed closure of about 600 U.S. stores as well as layoffs of a considerable number of servers in quality apron, has also requested fellow business leaders to pledge in stepping up hiring in their own jurisdictions.
OFN is composed of community development financial institutions (CDFIs) that invest in opportunities that could potentially benefit small businesses. OFN Chief Executive Mark Pinsky said that the group has been giving out as much loans as they possibly could in the course of the present recession. “We hope that this initiative will help in kicking-off a whole new attitude about the possibilities that’s bound to come,” he said. He also added that the CDFI lending portfolios of OFN are all healthy.
Stated in the Create Jobs For U.S.A. webpage: We hear it in the news everyday that this country needs jobs. More and more people we know are being impacted; but unemployment is a problem that cannot be solved overnight—but we do have to start somewhere. This is a project that we can all be part of; a project that can truly be Americans helping Americans. A project that states: we are indivisible.”