Starbucks is joining up with a network of nonprofit groups whose aim is to offer credit to individuals and businesses inunderserved communities to jumpstart job growth. NPR reports:
Starbucks is teaming up with a network of community-based financial institutions to help create jobs. Beginning Tuesday anyone can make a tax-deductable contribution at a Starbucks store or online to the Create Jobs for USA Fund. The money will go to companies so they can hire or retain American workers.
Mark Pinsky heads the Opportunity Finance Network, a group of about 180 mostly nonprofit lenders that work in underserved communities where credit is often hard to get. Over the past couple of years, Pinsky chatted informally with individuals at Starbucks about ways they might collaborate, but he certainly wasn't expecting the communiqué he got from the company a couple of months ago.
Where did this particular model of community lending originate? Catholic nuns, of course. NPR again:
The deal creates a new pot of money. The Starbucks Foundation is putting up $5 million and is encouraging others to chip in. All the funds are slated for the Community Development Financial Institutions, which are part of Pinsky's network.
He explains the contributions represent equity: Lenders can use it to leverage even more financing. A $5 contribution, Pinsky says, will likely support $35 in new lending, and will be targeted at job-creating projects.
The Opportunity Finance Network was born more than a quarter of a century ago. Pinsky says Catholic nuns were among to invest in these community lenders.
"There were two things we learned back then that I think are still true for us today: One, when you are borrowing the nuns' community money, their retirement money, you better do something really important with it; you better do something that matters, right. But the second lesson is when you are borrowing the nuns' retirement money, you don't lose the nuns' retirement money," he says. "You work really hard to do that."
Listen to the full report here.
Michael J. O'Loughlin