Starbucks has announced new initiatives as part of its long-standing commitment to positively impact the communities it serves. The company will invest $100 million to launch the Starbucks Community Resilience Fund focused on supporting small businesses and community development projects in Black, Indigenous and People of Color (BIPOC) neighborhoods. In addition, Starbucks is partnering with the Smithsonian’s National Museum of African American History and Culture (NMAAHC) to share the museum’s educational resources and digital volunteer opportunities, according to a news release on its website, starbucks.com.
“Starbucks has always been a company focused on caring for our partners, creating experiences for our customers and playing a positive role in our communities and throughout society,” said Starbucks President/CEO Kevin Johnson. “We are excited to make this investment as it aligns with our Mission and Values and supports our aspiration to advance equity and opportunity in the communities we serve.”
By 2025, the Starbucks Community Resilience Fund will invest $100 million to advance racial equity and environmental resilience by supporting small business growth and community development projects in neighborhoods with historically limited access to capital. The investments will initially focus on 12 U.S. metropolitan areas and their surrounding regions: Atlanta, Detroit, Houston, Los Angeles, Miami, Minneapolis, New Orleans, New York City, Philadelphia, San Francisco Bay Area, Seattle and Washington D.C.
In partnership with community leaders, Community Development Finance Institutions (CDFIs) and other impact-focused financial institutions, the Fund will help provide access to capital intended to support small businesses and neighborhood projects, including those addressing the inequitable impacts of climate change.
As part of the initiative, Starbucks will work with partners such as the Opportunity Finance Network to allocate funds to local CDFIs, which will provide borrowers with access to capital, mentorship and technical assistance.
“Starbucks is investing in the survival of small business by working with CDFIs in key cities across America. CDFIs deliver affordable credit as well as training on disaster recovery and rebuilding – and that is exactly what small businesses need right now to withstand ongoing economic and climate changes,” said OFN President and CEO Lisa Mensah. “With partners like Starbucks and CDFIs, these small businesses will have a fighting chance to recover, rebuild, hire workers and serve their local economy.”
The effort expands on Starbucks 2019 commitment to invest $10 million in four Chicago-based CDFIs: Accion Chicago, Chicago Community Loan Fund (CCLF), IFF and Local Initiatives Support Corporation (LISC).
“As Chicago continues down the road to recovery from the COVID-19 pandemic, Starbucks commitment to bettering the cities and communities they serve has been incredibly invaluable,” said Chicago Mayor Lori E. Lightfoot. “Thanks to their investment, Chicago’s CDFIs, such as Accion, CCLF and more, will be able to both continue the necessary work of increasing access to funding for our small businesses – especially those located in neighborhoods struggling with historic disinvestment – and support our ongoing, citywide efforts to provide COVID relief grants to our business community. I remain immensely grateful to Starbucks for their dedication to uplifting our neighborhoods – work that aligns with our city’s INVEST South/West initiative.”
Green Era Sustainability was among the first organizations to receive loans from CDFIs that Starbucks invested in last year. Green Era has been raising funds to construct a sustainable campus in the Auburn Gresham neighborhood of Chicago. The campus will include a 2-acre clean energy generation facility, an urban farm, green houses, an outdoor fresh produce market, a visitor center with classrooms for community activities and a STEM education center. Among other positive impacts to the community, Green Era is expected to create 247 construction jobs and 25 permanent jobs.
“Starbucks investment means we’ve been able to drive more capital to small businesses and nonprofits that are innovating and providing critical services in local communities,” said Matthew Roth, IFF President of Core Business Solutions, who leads the agency’s CDFI wing. “The pandemic has highlighted how important CDFIs are in the financial ecosystem, ensuring capital reaches non-profits and small businesses serving low-income communities that are traditionally left out of mainstream finance.”
CDFIs often collaborate with multiple lenders to make large projects like Green Era’s sustainable campus possible. Two of Starbucks investees – IFF and CCLF – each made loans to Green Era to support the project, in addition to other impact-focused financial institutions. Additional financing for the project also came from Partners for the Common Good and Reinvestment Fund as well as the local impact investor Benefit Chicago.
“Given the severe impact of the pandemic on the long-disinvested communities CCLF serves, our lending is more important than ever to help these communities grow and thrive,” said Bob Tucker, Chief Operating Officer for the Chicago Community Loan Fund. “Our customers have urgent needs, and Starbucks investment in CCLF will help tremendously in bringing them the resources they need.”