Starbucks to invest $100M in Black Businesses

Starbucks recently joined the train of companies and organizations that have pledged to financially support Black businesses, nearly nine months after the Black Lives Matter movement.

The company on Tuesday announced its launch of a Community Resilience Fund, which will be focused on helping small businesses in minority communities. Through this, the chain store plans to increase its investments.

Through its Resilience Fund, Starbucks plans to invest $100 million to “advance racial equity and environmental resilience” in minority and underserved communities, especially those who lack access to capital for their businesses. This funding will run over the next four years in 12 cities of the United States. Initial rounds of funding are set to start in cities including Atlanta New Orleans, Houston, Detroit, New York, Detroit, Miami, Los Angeles, the San Francisco Bay Area, Philadelphia, Seattle, Minneapolis, and Washington D.C.

Starbucks will partner with local Community Development Finance Institutions (CDFIs) to distribute capital.

“Starbucks is investing in the survival of small business by working with CFDIs in key cities across America,” said Lisa Mensah, CEO of nonprofit firm, Opportunity Finance Network. “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 climate changes.”

“With partners like Starbucks and CDFIs, these small businesses will have a fighting chance to recover, rebuild, hire workers and serve their local economy.”

In June 2020, following the killing of George Floyd and the rise of the Black Lives Matter protest, the Starbucks Foundation pledged $1 million in grants for minority communities, joining a host of organizations to support the fight against racial injustice. The foundation gave an additional $500,000 on the initial $1 million.

In addition to the fund, Starbucks will also partner with the Smithsonian National Museum of African American History and Culture to launch a new educational program. This partnership will make the museum’s curriculum available digitally.

“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 and CEO Kevin Johnson in a statement. “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 community we serve.”

In 2019. Starbucks pledged $10 million in investment to CFDIs in Chicago. The company said it is working with Chicago Mayor Lori Lightfoot to ensure that the money goes where it is most needed. Starbucks is also in talks with the local governments of the area that will partake of the new fund.

The coffee chain is also making changes inwardly, creating a more diverse workforce. It aims to achieve this by setting new targets for management roles and adding executive compensations to them.

The aim of Starbucks ’ support is to close up the gap between public and private sectors, especially small businesses. In the 2020 Paycheck Protection Program, many small businesses were left out of the federal funding which was supposed to keep all businesses afloat amid the coronavirus pandemic.

“We know these communities. These are some of our business partners, and in some instances, they may even be a small supplier to Starbucks,” said Roz Brewer, Chief Operating Officer. “And so when you think about that, and you can’t help but have empathy for them, you want them to thrive as well, but also we understand what they’re going through.”

Starbucks’ shares have risen 16% in the last year as of Monday’s market close. Its market value currently stands at $123 billion.