Starbucks (NASDAQ: SBUX) announced new initiatives as part of its long-standing commitment to use its scale and platform 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.
“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 Kevin Johnson, Starbucks president and ceo. “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.”
Advancing racial equity and environmental resilience
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 like the Opportunity Finance Network to allocate funds to local CDFIs that will provide borrowers with access to capital, ongoing 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,” says 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.”
Honoring Dr. Martin Luther King Jr.’s legacy
As part of Starbucks long-standing heritage of honoring Dr. Martin Luther King’s legacy of service, the company announced a collaboration with NMAAHC to share the museum’s digital educational resources and opportunities through Starbucks digital platforms.
As part of the collaboration, Starbucks will invite partners and customers to participate in the Freedmen’s Bureau Transcription Project. Through the project, volunteers can help digitally transcribe handwritten records containing information from newly emancipated Black people during the Reconstruction period. The initiative helps African Americans discover their ancestors and historians better understand the years following the Civil War. These records will be used later in a museum exhibition planned for 2021 on the Reconstruction Era.
The partnership builds on the company’s ongoing commitment to promote racial and social equity on behalf of its partners and communities it serves.
Starbucks customers can access the museum’s content through the Starbucks App and Starbucks Stories beginning January 12 through February.
Since 1971, Starbucks Coffee Company has been committed to ethically sourcing and roasting high-quality arabica coffee. Today, with more than 32,000 stores around the globe, the company is the premier roaster and retailer of specialty coffee in the world. Through our unwavering commitment to excellence and our guiding principles, we bring the unique Starbucks Experience to life for every customer through every cup. To share in the experience, please visit us in our stores or online at www.starbucks.com.
Certain statements contained in this press release are “forward-looking” statements within the meaning of the applicable securities laws and regulations. Generally, these statements can be identified by the use of words such as “continue,” “could,” “expect,” “intend,” “may,” “plan,” “should,” “will,” “would,” and similar expressions intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These statements include statements relating to: the anticipated timing, scope and effects of our initiatives and our continued investment plans. These forward-looking statements do not represent historical data, are based on currently available operating, financial and competitive information and are subject to a number of significant risks and uncertainties. Actual future results and trends may differ materially depending on a variety of factors, including, but not limited to the risks detailed in the company filings with the Securities and Exchange Commission, including the “Risk Factors” sections of Starbucks Annual Report on Form 10-K for the fiscal year ended September 27, 2020. The company assumes no obligation to update any of these forward-looking statements.