When it comes to getting behind new jobs creation, Starbucks has a running head start. And we don’t mean a jolt of caffeine to get you going in the morning. This week, Starbucks announced that Google Offers was joining in the effort it launched last year to stimulate new job creation opportunity.
To date, Starbucks has raised more than $7.5 million in donations for the Create Jobs program. This includes $5 million in seed funding from the Starbucks Foundation as well as donations from concerned citizens across the country. Starbuck’s customers can support the initiative by making a donation to the Create Jobs for USA fund. Donations are accepted at company-operated U.S. Starbucks stores and online at createjobsforUSA.org. For donations of $5 or more, donors will receive an American-made “Indivisible” wristband.
Starbucks has teamed up with the Opportunity Finance Network® which provides capital grants to select Community Development Financial Institutions (CDFIs). The CDFIs have a mission to provide loans to underserved community businesses, which include small businesses, microenterprises, nonprofit organizations, commercial real estate, and affordable housing. The goal of Create Jobs for USA is to bring people and communities together to create and sustain jobs throughout America.
The Create Jobs for USA program initially was seeded with a $5 million contribution from the Starbucks Foundation. People can support the initiative by making a donation to the Create Jobs for USA fund. Donations are accepted at company-operated U.S. Starbucks stores and online at createjobsforUSA.org. For donations of $5 or more, donors will receive an American-made “Indivisible” wristband.
At least one blogger and Starbucks partner, (aka “employee”), has expressed concerns about the program.
Jeremiah Dow opines”There is a fundamental contradiction of a “job-creation” campaign based on donations instead of profit creation. After all, since when does the free market divorce job growth from profit creation.” The following is an excerpt from Stover’s article.
“While well intentioned, Starbuck’s zeal is misplaced. The microfinance firm that they have partnered up with uses donations rather than actual sales transactions to raise money. One of the key requirements for a “sustainable” job is a profitable business. Profit cannot be calculated without a value scale, which measures a good or service versus some quantity of money; donations do not provide this. Donations represent money without the value of profit and consumer need, both of which are vital to the sustainability of a job or business. When the donations cease, so will the job or business.”
TechCrunch comments that a more interesting question enters the forum when one reads the Opportunity Finance Network’s mission statement: “Opportunity Finance Network® (OFN) is the national network of Community Development Financial Institutions (CDFIs)—private financial institutions that are 100% dedicated to delivering responsible, affordable lending to help low-income, low-wealth, and other disadvantaged people and communities join the economic mainstream.”
“Two points are worth mentioning here,” they state. “First, any institution sponsored by government dollars cannot, by definition, be “private” as claimed. Moreover, I call your attention to the last line concerning the “economic mainstream.” Free-market job creation cannot exist in an economy based on donations and stimulus, at least not in a sustainable fashion.”
Forbes.com had a decidedly different take: “At a time when Occupy Wall Street activists are casting American corporations as villains, it’s striking to see a company step up and become a local community caretaker, especially when a gridlocked Congress is taking no steps toward creating jobs. Corporate responsibility was once dominated by arms-length philanthropic donations. Starbucks’ participation in Create Jobs for USA marks a huge stride forward because it places direct financing and stakeholder engagement in the hands of experienced CDFIs, yet actively engages its consumer base in one of the most important domestic issues of our time.”
If Starbucks was serious about creating jobs and setting a good example, observes Baker, it would declare a policy of neutrality toward union organizing in its stores. (The company says it plans “to add 200 new stores and remodel more than 1,700 stores in the United States” during the next fiscal year, which “may create approximately 2,000 full and part-time jobs across the country.”) But rather than a neutral stance toward unions, said Starbucks employee Erik Forman, Starbucks “fired many organizers, and they’ve waged a pretty relentless campaign against the union.” Forman was fired from his Minneapolis store in 2008 just before he and co-workers planned to go public with their union campaign.Starbucks attributes its focus on credit to a survey in which “community businesses” said they need more financing. But “to get a good survey,” responds Baker, “you have to put it in the context of alternatives.” He says Starbucks’ survey results sound equivalent to, “Do you want an ice cream cone? Sure.”
This week, Starbucks announced that Google Offers and Banana Republic are coming on board to support Create Jobs for USA and will contribute donations of up to $4 million.
o Google Offers introduced an exclusive, one-day Starbucks deal to Google Offers subscribers on Wednesday, April 4. For $5, customers received a $10 Starbucks Card eGift, and for every offer purchased, Google Offers made a $3 contribution to the Create Jobs for USA Fund, up to $3 million.
o Banana Republic will hold two special shopping events, the first starting April 19, when customers will receive 25 percent off their purchases in Banana Republic stores or from BananaRepublic.com. Banana Republic will donate five percent of total purchases during both events to the Create Jobs program, up to $500,000 per event or up to $1 million in total.
· The power of this money is actually exponentially greater – community lenders are able to leverage this funding on their balance sheet to secure additional financing for these loans, on average, 7 times the donation amount. So every donation of $5 can lead to approximately $35 in loans to these community businesses.
· Combined with the existing donations of more than $7.5 million, the contributions of up to $4 million from Google Offers and Banana Republic will bring the total lending to community businesses up to nearly $80 million.
· Based on conservative forecasting models, this lending is expected to help create or sustain more than 3,800 jobs.
· The Create Jobs for USA program is designed to help provide financing to a variety of community businesses —including small businesses, microenterprises, nonprofit organizations, commercial real estate developers, and affordable housing developers – and donations are already being distributed across the country. [24×7]
Many in Seattle can ever forget that Starbuck’s CEO, Howard Schultz, allowed the city’s beloved NBA basketball franchise to be exported for what amounts to a business decision of personal profit over community youth, role-modeling, civic pride and benevolence. That “paycheck” will likely shadow Mr. Schultz his entire lifetime as far as many in Seattle are concerned, a greater number than he possibly ever imagined.
For more info about the Create Jobs initiative, check out the Starbuck’s Create Jobs for USA Infographic
To learn more about the overall initiative from Starbuck’s POV, view the video. [24×7]