With a population of more than 2.7 million1, the City of Chicago is the third most populous city in America and has a total economic output of $770.7 billion2. This makes it the third largest metropolitan economy in the United States, after New York and Los Angeles. In spite of the city’s economic activity, Census Bureau data indicates that 17.3% of the City’s population lives in poverty.
Chicago has always been considered a city of neighborhoods. The City of Chicago was divided into 77 distinct community areas, which were drawn up by the University of Chicago in the 1920s. More than 200 distinct neighborhoods make up the city’s community areas. These neighborhoods represent a diverse array of cultures, people, and experiences. Between the various neighborhoods that comprise the City of Chicago, disparities in poverty and economic opportunity can be particularly acute.
According to research conducted by the Urban Institute3, “Chicago typifies wealth inequity.” Many of the area’s households hold nearly $1 million dollars in wealth while households in neighboring communities have negative wealth exceeding $1,500. The richest areas of Chicago have wealth 206 times that of the poorest areas.
Chicago-based Community Development Financial Institutions (CDFIs) have a long history of providing access to capital to distressed and underserved neighborhoods throughout the city. In total, CDFI Program Financial Assistance recipients have lent or invested in excess of $1 billion across greater Chicago. Recently, CDFIs in Chicago have partnered with major businesses such as Starbucks to tackle issues of persistent poverty and economic disparity.
Founded 50 years ago in Seattle, Washington and named after Starbuck, Captain Ahab’s steadfast first mate of the Pequod in Herman Melville’s novel Moby Dick, Starbucks Coffee Company has become one of the most successful coffee businesses in the world. The business maintains a commitment to sustaining the environment and humanity. This commitment is behind the creation of the Starbucks Foundation and its initiatives, providing positive financial impacts to the communities it serves.
In October 2019, Starbucks announced an initiative to invest $10 million in four Chicago-based Certified CDFIs. The investment was disbursed to Allies for Community Business, Chicago Community Loan Fund, Illinois Facilities Fund (IFF), and Local Initiatives Support Corporation. Starbucks indicated the investment was being deployed “to help finance more than 500 loans to foster growth in small business, support community development projects and create more jobs in Chicago’s underserved communities.” These CDFIs also provided borrowers with project mentoring and technical assistance. Bank of America assisted Starbucks with deploying the investments.
The Chicago Community Loan Fund (CCLF) utilized its Starbucks investment in combination with existing CDFI Program Financial Assistance resources in 2021 to provide $11.5 million in total financing, and has leveraged $32.5 million in additional private and public investment, for commercial real estate, community facilities, and social enterprise projects located in distressed areas in Chicago’s Southside and Westside neighborhoods. Specifically, the resources are being utilized to support initiatives in Chicago’s Auburn Gresham, Douglas, Greater Grand Crossing, New City and South Shore neighborhoods. These communities are principally comprised of residents that are African American or Latino and have median incomes that range from 48% to 60% of the overall median income for the City of Chicago. To help support its work in these neighborhoods, CCLF also received a $10 million loan from JPMorgan Chase.
“CCLF has been working strategically to create more commercial retail in low-income neighborhoods, and with the Starbucks investment and grant funding, CCLF was able to create not only needed jobs for local residents, but affordable housing and access to high quality goods and services,” said Calvin L. Holmes, President of CCLF. “Many of our communities are amenity deserts and we are working to change that.”
IFF received $3.7 million in funding from Starbucks, which it paired with additional IFF resources to finance green manufacturing and community resource facilities, and develop affordable housing in Chicago’s Auburn Gresham and North Lawndale neighborhoods.
“There is a big opportunity to push the limits of our lending with corporate impact investors, like Starbucks, who are investing in CDFIs as part of their focus on racial equity. Projects like these are the tangible outcome of a commitment to equitable community development, and we are excited that Starbucks has continued their commitment by broadening their investment in CDFIs,” said Joe Neri, Chief Executive Officer of IFF.
There have been a number of community initiatives benefitting from Starbucks’ investment. Keep reading below for a summary of a few of these projects.
The Evergreen Imagine Project, located in the Auburn Gresham neighborhood in Chicago’s southwest side, is a major highlight of CCLF’s investments. This mixed-use space will feature 56 units of affordable one-, two-, and three-bedroom apartments in addition to 2,870 square feet of ground-floor retail space, and a parking garage. This building will be adjacent to green spaces, providing low-income Chicago residents with the opportunity to live in a safe and healthy environment.
The Evergreen Imagine Project Designed by Ross Barney Architects and Nia Architects
Green Era Sustainability, LLC is developing a renewable energy and urban farming campus on a vacant brownfield4 site in South Chicago’s Auburn Gresham neighborhood that will recycle organic waste (inedible food waste) to produce clean, renewable energy, compost for local food production, and green jobs for low-income residents. At the heart of this former brownfield site is a self-sustainable anaerobic biodigester5, which will divert millions of pounds of food waste from landfills to produce clean energy and nutrient-rich compost. The anaerobic digester has the total capacity to transform 1.8 million gallons of waste into renewable energy. Green Era estimates that the campus will create 300 permanent and construction jobs in the community, divert 55 million pounds of Chicago food waste from landfills, and offset 42,500 pounds of greenhouse gas emissions each year. IFF provided a total of $6.8 million in funding to support the Green Era campus, of which $1.7 million was supported by the Starbucks’ award. CCLF worked collaboratively with IIF and provided an initial $3 million participation loan to IFF for this initiative.
Anaerobic Biodigester at Green Era Sustainability
(Photo by Juan Calixto)
The Foundation for Homan Square is an umbrella organization for community resources in Chicago’s predominantly African American North Lawndale neighborhood. In 2018, the Foundation for Homan Square and IFF formally joined forces, leveraging the best of each other’s organizations for the long-term benefit of the Homan Square community. These resources include K-12 educational facilities, a community center, and hundreds of units of affordable housing. IFF provided $1.5 million to finance critical repairs to building exteriors, window penetrations, and common area entryways of the Foundation for Homan Square’s West Side Village Phase 1 housing development.
Lawndale Christian Development Corporation (LCDC) is an initiative launched by the Lawndale Christian Community Church designed especially to assist first-time homebuyers with the necessary education to purchase and sustain a home. This education includes financial management strategies, how to select the best mortgage loan, and tips for home shopping. Class participants will learn financial management strategies, how to select the best mortgage loan, and tips for shopping for homes. IFF provided $500,000 to finance the predevelopment and construction of the organization’s Canaan Homes, a multi-site project consisting of single-family homes meant to activate homeowners and investment in homeownership among residents in North Lawndale. LCDC also offers youth and adult education, and job readiness programming.
CDFIs across the nation are expanding collaborations and forming new partnerships with some of the most recognizable names in corporate America—Google, Block, and Netflix (just to name a few), all of which are centered on increasing the availability of capital and credit in distressed and underserved communities. The CDFI industry’s work with Starbucks is just one example of the innovation and impact that can result from these partnerships.
Gail Thomas is a Communications Specialist with the CDFI Fund's Office of Legislative and External Affairs.
 According to 2020 U.S. Census data the median income for the City of Chicago is $62,097.
 Zhong, Mingli, Williams, Aaron, R. (2022). In Chicago, Neighborhoods Have Stark Differences in Economic Opportunity, www.urban.org
 A brownfield is an abandoned, idled, or under-utilized industrial and commercial facility where expansion or redevelopment is complicated by real or perceived environmental contamination.
 Anaerobic digestion is a sequence of processes by which microorganisms break down biodegradable material in the absence of oxygen.