When Starbucks CEO Howard Schultz came up with his newest idea to help small business by lending money outside of government and bank influence, he turned to one man to help him make this vision a reality.
Mark Pinsky, president and CEO of Opportunity Finance Network, a high-profile lending system for low-income businesses and individuals, recently partnered with Schultz in Create Jobs for USA. The Americans-helping-Americans initiative allows Starbucks customers and others to help fund small businesses in an effort to spark employment and the economy. Funds raised with Create Jobs for USA provide grants to community development financial institutions (CDFIs), which then lend to community businesses.
Pinksy will be the keynote speaker at an event to be scheduled in January at Goucher College, “Where Has All the Money Gone,” presented by Corridor Inc. and co-sponsored by the Greater Baltimore Committee.
When Schultz approached Pinsky with his idea for Starbucks’ customers to donate money to be used to finance small businesses, the two fleshed out the idea in less than two days.
“I thought it was great. I thought it was clean and simple and neat,” Pinsky said. “I thought it blended the best things that they had to offer with the best things that we had to offer and gave us the potential to create an opportunity for Americans to be part of solution in a way that we’ve never seen before.”
And Create Jobs for USA was a true marriage of the best of both worlds. Starbucks has the clientele and the marketing arm to be able to promote the initiative and make the money, while OFN has the tools to distribute it through capital grants to CDFIs and help small businesses that aren’t getting much help anywhere else.
Starbucks launched the initiative with a $5 million donation, and is paying to market the campaign and encourage customers to donate when they buy their coffee.
Pinsky describes the current landscape for small businesses as arid. Whether banks dropped out from providing funding for small businesses or they were affected by the economy, the landscape isn’t set up to make it easy for them to get the funding they need to create and sustain these businesses, he said.
“It’s a credit desert,” he said. “It’s very hard for small businesses, most small businesses, to get access to credit these days because of a combination of banking and business policies, regulatory pressures and economic market uncertainty.”
Customers at any Starbucks location can purchase a red-white-and-blue Indivisible bracelet or go directly to the CreateJobsForUSA.org Web site to donate. All the proceeds go to the initiative.
Pinsky joined Opportunity Finance Network, based in Philadelphia, Pa., in 1995. Since he has been in the presidential role, the CDFI industry as a whole has grown 10-fold, membership expanded by 400 percent and assets increased as well, by 1,500 percent. Pinsky lives outside of Philadelphia in the suburb of Yardley.
He writes about the industry for a wide range of publications and has published five books. In addition, he currently chairs the national boards of the CDFI Data Project, and CARS. He also serves on the Boards of Net Impact, the CDFI Coalition, as well as on advisory boards to the Center for Community Development Investments at the Federal Reserve Bank of San Francisco, Bank of America’s National Consumer Advisory Council, Morgan Stanley Community Development Advisory Board and several New Market Tax Credit community development entities.