A Starbucks pilot program will share profits of two stores with the neighborhoods they serve.
By Daniel Roberts, reporter
FORTUNE -- "We don't want to just write a check," says Howard Schultz, the CEO of Starbucks. "We want to work in the community side by side." Indeed, he's standing side by side with a pillar of the community: Calvin Butts III, pastor of the Abyssinian Baptist Church in Harlem.
It's early October, and Schultz has come to the corner of 125th Street and Lenox Avenue to talk about his company's newest initiative in social activism. In both Harlem and the Crenshaw neighborhood in L.A., Starbucks (SBUX) will share profits of the local store with the community, committing at least $100,000 in each place. The program will be run through partnerships with, in Harlem, the Abyssinian Development Corp., and in Crenshaw, the Los Angeles Urban League.
Starbucks has been on its Harlem corner for a few years, Butts says, but now Schultz is giving something back by "investing in the quality of life for poor people in this nation, at a time when there's a tremendous rollback in philanthropy." Schultz, returning the compliment, tells the crowd that when he attended Butts' sermon in church earlier, he "strongly considered converting" from Judaism.
The idea for community-building partnerships was sparked by Schultz's conversation two years ago with L.A. Urban League president Blair Taylor, who told him that nonprofits needed a revenue source apart from fundraising and occasional one-off corporate contributions. Schultz visited Crenshaw and proposed the partnership, which he hopes will be a model for other companies. Both Abyssinian and the LAUL say they will use Starbucks funds to continue revitalization efforts in public education, affordable housing, and social services.
How do you distinguish authenticity from a performance? The Harlem event at the Starbucks store did open with a local gospel choir singing exuberant hymns. A little girl delivered a lovely speech about her school. It was a splendid bit of stagecraft. But it's difficult to be skeptical watching Schultz's employees react to his presence in their store. As soon as he walks inside, all three baristas snap photos of the CEO and chatter excitedly. They're fans, not just employees. The company treats them well. And as of today they will be agents of change, with each cup they serve going to help the neighborhood.
This article is from the December 12, 2011 issue of Fortune.
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