I’m not much for patriotic displays, but I’m proud to wear this red, white and blue wristband inscribed with the word INDIVISIBLE.
The program aims to create thousands of jobs across the country, by investing community development financial institutions (CDFIs) — mostly credit unions and community banks — that will then lend to small businesses, nonprofits, housing and commercial developers, micro-enterprises and the like, all to spark the economy and create jobs.
I’m a fan of this project, for several reasons.
First, there’s no more front-of-mind issue in America today than jobs. So this a great example of how a big company can help tackle an important problem–while enhancing its reputation as a business that supports its communities.
Second, Let’s Create Jobs for USA underscores the fact that, despite the rhetoric from politicians, jobs are best created by the private sector. If you’re anti-business, you’re anti-jobs.
Third, although credit for the campaign ultimately belongs to Howard Schultz, Starbucks CEO, Let’s Create Jobs for USA unfolded as it did because of a connection between Ben Packard, vice president of global responsibility at Starbucks and Mark Pinsky, president and CEO of the Opportunity Finance Network, a national network of CDFIs. Ben, Mark and I serve together on the board of Net Impact, a great organization of students and young professionals whose purpose is to inspire and equip young people to use the power of business to make the world a better place.
Let’s Create Jobs for USA is very much in the spirit of Net Impact.
I chatted about the program with Ben and Mark this weekend during Net Impact’s annual conference in Portland, Oregon. Ben told me the idea grew out of a long-running loan program for farmers that Starbucks supports in coffee-growing countries. Last year alone, Starbucks made loans to 56,000 farmers in 10 countries; the company has promised to make $20 million in loans by 2015.
With the US economy reeling last summer, Schultz wondered out loud whether Starbucks could do for its retail communities in the U.S. something comparable to what it does in coffee-growing regions. The company needed a partner, and so Ben recommended Mark, an indefatigable expert on community development and finance. (Ben hastens to add that after making the connection, he stepped aside, and work on the project was done by others at Starbucks.) Through Opportunity Finance Network, Mark and his team can get the money raised at Starbucks into low-income communities quickly and with little or no red tape. Through its foundation, Starbucks donated $5 million to Opportunity Finance Network to get things rolling.
“That money will get out and it will get out right away,” Mark told me. “CDFIs have been lending in the past few years, and at a pace faster than traditional financial institutions.”
CDFIs have been around for decades. Many, in fact, get support from the much-maligned Wall Street banks, as well as the U.S. Treasury. But their lending has been constrained by a shortage of capital. Money raised by Let’s Create Jobs for USA will go to meet their capital requirements, enabling the impact of the donations to multiply. “Every dollar that gets donated will enable $7 in new financing,” Mark said. Loans support business ranging from local grocery stores to charter schools to affordable housing, all aimed at serving the poor and working class.
The effort crosses party lines. “Howard (Schultz) gave a wristband to President Obama, and he gave one to Tony La Russa,” said Mark. La Russa, as you may know, has Tea Party sympathies (see this and this) but that didn’t stop him from wearing an “indivisible” wristband during game seven of the World Serious.
The speed with which all this came together is breathtaking. Mark visited Starbucks HQ in Seattle in early September. The program was announced in early October, and it rolls out to 7,000 Starbucks stores and online on Tuesday. Many big companies would need a month or two just to run an idea like this past their lawyers.
The payback to Starbucks will come in the form of an enhanced reputation and, in the long run, healthier communities. People without jobs don’t spend $3 for a grande latte.
“This is about using our scale for good,” Schultz said.
Nice to see a CEO stand up for the 99%.