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May 07, 2014

Opportunity Finance Network Reports on Starbucks Partnership
    by Robert Kropp

The national network of community development financial institutions joined with Starbucks in 2011 to form Create Jobs For USA, an initiative to fund sustainable jobs in underserved communities.

SocialFunds.com -- In 2011, Opportunity Finance Network (OFN), the national network of community development financial institutions (CDFIs), teamed with Starbucks to launch Create Jobs For USA, an initiative designed to “help create and sustain jobs in underserved communities throughout the US,” an OFN press release stated at the time.

Donations from Starbucks customers and other sources are pooled into a nationwide fund managed by OFN for community business lending by CDFIs. Furthermore, CDFIs leverage additional investments from other sources. With leverage as a multiplier, Create Jobs for USA estimates that every $3,000 in donations can create one job for a small business in underserved communities.

OFN recently published Six Lessons Learned from Create Jobs for USA, the first of three reports intended to assess the accomplishments of the partnership. “The most effective way to show the initiative’s success was by telling the stories of borrowers—small businesses, commercial real estate developers, and housing developers—and the communities in which they operate,” the report states.

At the time of the initiative's launch, the global economy was still reeling from the damage caused by the financial crisis. Nationally in the US, the unemployment rate was nine percent. Traditionally underserved communities bore the worst of the impacts. Earlier that year, CDFI Fund Director Donna Gambrell said, "Recovery is occurring much slower in our nation's low-income communities. CDFIs across the nation continue their critical work on the front-lines of bringing economic recovery to all communities."

As of December, 2013, there were more than 800 government-certified CDFIs in the US, and in 2012 total assets under management exceeded $64 billion.

“Since its launch,” the report states, “Create Jobs for USA has raised $15.2 million. The money has come from a combination of individual donors, corporations, and philanthropies.” Individuals contributed more than $3.5 million of the total amount raised. The initiative continues to accept donations.

Capital grants were awarded to 120 CDFIs, which then leveraged debt from other sources to provide loans to small businesses in underserved communities. The total supported lending to community businesses exceeded $106 million. According to the report, the initiative enabled more than 5,000 Americans to keep their jobs or get back to work.

“Corporate-nonprofit partnerships can create significant impact, visibility, resources, and momentum,” the report concluded. The track record of this initiative can serve as a model for mutually beneficial corporate-CDFI-individual partnerships aimed at finding solutions to all of these economic and social issues that hold back too many individuals and communities nationwide.”

However, “Measurable performance and impact are essential,” as well. The two reports scheduled to follow “will focus on the substantial effort that Starbucks and OFN undertook with Create Jobs for USA Awardees to collect and analyze data on job creation and retention,” and “analyze the data results related to jobs based on the thousands of loans that Awardees made and reported on since the inception of Create Jobs for USA.”

“A unique set of players—corporations, individuals, CDFIs, and community businesses—came together around their shared belief in small businesses and jobs to make a difference,” said Mark Pinsky, President and CEO of OFN. “This model is replicable for solutions to other economic problems. CDFIs offer a powerful solution, especially when coupled with corporate and individual partners, to create opportunities for all.”

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