Starbucks introduces community partnership model in which community organizations share in a store's profits; first stores will be in New York and Los Angeles, with minimum donations of US$100,000 in first year

Cindy Allen

SEATTLE , October 4, 2011 (Business Wire) – As part of the company’s commitment to the communities where it does business, Starbucks Coffee Company (NASDAQ:SBUX - News) today announced that it will introduce a new community model in the neighborhoods of Harlem, New York and Crenshaw, Los Angeles-- where community organizations will share in the profits of a store in each community. Starbucks will donate a minimum of $100,000 to each organization for the first year of the partnership as it assesses the success of the program and gathers learning in hopes of creating a new type of corporate engagement in communities, potentially providing a model for other companies to consider emulating.

Starbucks is partnering with the Abyssinian Development Corporation (ADC) in Harlem and the Los Angeles Urban League (LAUL) in the Crenshaw neighborhood to create a new kind of private sector engagement with these changemaker organizations that have a proven record in creating progress for disadvantaged communities.

“Starbucks is partnering with two organizations doing heroic work to address the economic, social and education challenges in their communities,” said Howard Schultz, president, chairman and ceo, Starbucks Coffee Company. “These two partnerships are intended to help us learn how our company can successfully join with change-making community organizations in a localized, coordinated and replicable way.”

A New Business Model – Business and Community Working Together

The stores in Harlem and Crenshaw, which were redesigned to reflect and embrace the individual culture, character and needs of each of these neighborhoods, represent a new business model, bringing together the scale of Starbucks, its partners and customers to collectively create positive change in these communities. In addition to creating a model for financial contribution, Starbucks hopes to work with both ADC and LAUL to increase local awareness and engage local residents, share our business expertise with them to help the organizations meet their mission and their targeted community impact metrics, provide strategic technical and management assistance, join together on community service imperatives and work with the organizations to plan unique ways Starbucks can support their jobs training and placement work.

Both the ADC and LAUL have a rich history of solving the unique challenges that affect their neighborhoods through holistic programs that have measurable impact.

Opened in 1999 and located in the heart of Harlem on the corner of 125th street and Lenox Avenue, this store will support Abyssinian Development Corporation’s efforts to comprehensively serve the children and families of Harlem through affordable housing, economic development, social services, quality educational opportunities and civic engagement. ADC made a commitment to educational excellence in neighborhood public schools, and created a continuum of quality and award-winning educational programs. Each of ADC’s sponsored schools has been recognized for its outstanding achievements, setting and meeting exemplary educational standards. Most recently, ADC was selected by the NYCDOE to be an Educational Partner Organization (EPO), a new initiative designed to connect struggling schools with successful education organizations and implement a strong school turnaround process.

“We are honored to work with Starbucks as a beneficiary of one of the first community stores in the nation,” said Sheena Wright, President & CEO of Abyssinian Development Corporation. “We applaud Starbucks for its development of this community store concept, which has the potential to do much good not just in Harlem, but in other similar communities nationwide. This partnership will enable us to expand and improve upon the education and social services we have provided to the Harlem community and beyond for nearly 25 years.”

Our store at Crenshaw and Coliseum in Los Angeles opened in 2006 and will now help to bolster LAUL’s efforts to revitalize a defined 70-block area in the Crenshaw neighborhood through Neighborhoods@Work™. This holistic, neighborhood change model focuses on education, safety, housing, health and employment. This strategic initiative has brought targeted resources and interventions to the community of Park Mesa Heights as well as parents, students and teachers at Crenshaw High School which lies at the center of the model. So far, this has resulted in a 51% increase in overall graduation rate at Crenshaw High School and a 34% decrease in violent crimes in Park Mesa Heights from the 2007 baseline.

“Starbucks is taking the lead in very tough economic times. They fully recognize and appreciate the need for collaboration between forward-thinking organizations from the for profit and nonprofit sectors,” said Blair H. Taylor, President and CEO of the Los Angeles Urban League. “This 21st Century partnership makes tremendous sense, since the Los Angeles Urban League is fundamentally committed to transforming communities through our holistic model, Neighborhoods@Work™. Howard Schultz has fully embraced the notion of Starbucks playing a vital role in rebuilding communities. Our hope is that this powerful relationship – which allows communities to receive contributions from Starbucks through nonprofit agencies – will be replicated by other companies across the nation.”

These stores will also serve as the hub of Starbucks community service and additional training programs in the area, which will provide leadership job and life skill development, positive learning environments, and overall health and wellness.

About Starbucks Corporation

Since 1971, Starbucks Coffee Company has been committed to ethically sourcing and roasting the highest-quality arabica coffee in the world. Today, with stores around the globe, the company is the premier roaster and retailer of specialty coffee in the world. Through our unwavering commitment to excellence and our guiding principles, we bring the unique Starbucks Experience to life for every customer through every cup. To share in the experience, please visit us in our stores or online at www.starbucks.com.

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