CreatejobsforUSA.org is a fund operated by an organization called Opportunity Finance Network (OFN) which is sponsored by Starbucks. As I understand it, individuals who visit Starbucks donate money to create this Createjobsforusa Fund in exchange for a wristband. There is a display in every Starbucks and supposedly The Starbucks Foundation donated the first $5MM in seed capital for this fund. The OFN is supposedly a network of banks AKA Community Development Financial Institutions (CDFIs) that allegedly invest in opportunities to benefit low-income, low-wealth and other disadvantaged communities across the U.S.to spark job growth. Any community bank that meets OFN’s eligibility criteria can apply for and gain membership in this network and the eligibility criteria is prominently displayed along with the membership benefits on the OFN website: http://www.opportunityfinance.net/membership/default.aspx
Here’s the kicker: I’ve been all through the OFN website (and even watched their cheesy little video and not only can I not find any information to support their claim that 100% of the donated funds go towards the creation of jobs, but I can’t see where $1 of the donated funds goes towards the creation of jobs. The OFN doesn’t even use the funds to insure the loans that are originated by the member banks like FHA does or guarantee the loans like VA does (or maybe they just left that part out of the member benefits section).
Here’s how the whole operation works as I see it:
- People visit Starbucks (literally tens of millions of people worldwide daily) to buy their favorite cup of joe.
- The visitors see this nifty way to help out the unemployment situation so they make a donation and get a cloth-covered rubber band to wear on their wrist and placate their conscience (it’s for a good cause, right?).
- The funds then go to OFN (the total amount has to be millions daily because they ask for a minimum donation of $5 and I am sure some give more).
As far as I can tell, the donated dollars stop at OFN because even if a community bank applies and gains membership in the “Premiere Network of CDFIs” the bank still lends out its own funds, charges and collects interest, and is responsible for servicing and making sure that the loans are repaid.
I originally dug into this because I was going to throw the flag on the banks if OFN gave the banks the donated funds to make loans with since this would mean that the banks would be earning interest on and getting paid back dollars that were simply given to them. Much to my surprise, however, it appears to be far more egregious than that—OFN apparently just keeps the donated money and offers the member banks some nominal benefits that, in my opinion, are of questionable value such as a discount for attending the annual OFN Conference (supposedly a $200 value), a member profile (supposedly a $2,000 value), and an annual customized peer analysis of their CDFI performance (supposedly a $225 value). I would love to find out how they derive the values for these benefits, by the way.
So am I missing something here? Somebody please take a look at this and tell me that we are not all victims of an elaborate scam perpetrated right under our noses and under the auspices of our desire to help out on the unemployment front.