Starbucks Coffee Company on Monday announced that it is teaming up with Opportunity Finance Network to launch Create Jobs for USA, a program that will pool donations from Starbucks customers, employees and concerned citizens into a nationwide fund for community business lending.
In a news release, Starbucks chairman and CEO Howard Schultz said: “Small businesses are the backbone of America, employing more than half of all private sector workers – but this critical jobs engine has stalled. We’ve got to thaw the channels of credit so that community businesses can start hiring again. Create Jobs for USA empowers Americans to help other Americans create and sustain jobs, with Starbucks and OFN as a catalyst and the Indivisible wristband as a symbol of our country’s unity.”
Starting November 1, Create Jobs for USA will accept donations online at www.CreateJobsforUSA.org and at nearly 6,800 company-operated Starbucks stores in the United States. Donors who contribute $5 or more will receive a red, white, and blue wristband with the message “Indivisible.” The wristband is designed to serve as a symbol of Americans uniting with other Americans to help create jobs. One hundred percent of donations will go to OFN to help fund loans to community businesses—including small businesses, microenterprises, nonprofit organizations, commercial real estate, and affordable housing— all across the country committed to creating and sustaining jobs.
OFN represents a nationwide network of 180 Community Development Financial Institutions set up to provide financing to community businesses in underserved markets where accessing credit through traditional lending institutions is challenging or not available. The Create Jobs for USA Fund at OFN will be seeded with a $5 million contribution from the Starbucks Foundation.
OFN president and CEO Mark Pinsky said, “We are thrilled to partner with Starbucks on this innovative and high impact solution to help put America back to work. For more than two decades, OFN’s network of premier CDFIs has financed community businesses, delivering both sound financial returns and real changes for people and communities. Create Jobs for USA will unlock the power of CDFIs to finance community businesses and create new jobs and help grow our economy.”
Every $5 donation will result in $35 in financing to support community businesses. The CDFI community lenders will issue $30 in financing, on average, for each $5 donation through their respective financing sources. Based on conservative forecasting models developed by OFN with input from independent economists, one new job will be created or retained for approximately every $21,000 in loans – or approximately every $3,000 in donations. Since CDFIs in the OFN network have an average 98 percent loan repayment rate, virtually every $1 donated will be re-loaned indefinitely, compounding the job-creation impact.
Moody’s Analytics chief economist Mark Zandi said, “Create Jobs for USA is exactly the kind of innovative and entrepreneurial solution that America needs to get its economy back on the right track. CDFIs are well known to be highly effective at creating local jobs in communities that need them the most, especially when it comes to helping community businesses that are having difficulty securing credit during the current economic climate.”