Amid the coronavirus crisis in the United States, the private sector has driven a large part of the nationwide response, from private warehouses to pick up and delivery operations to grocery stores. Pharmaceutical companies are developing potential therapeutics and vaccines, manufacturers are volunteering to produce personal protective equipment and videoconferencing apps are breaking down barriers between our formerly separate home and office lives. This is all outside of President Donald Trump’s reluctant use of the Defense Production Act.
Social media giant Facebook announced Thursday evening that it would continue its support of America’s small businesses with an additional $40 million grant, providing new grants to 10,000 small businesses in 34 locations where Facebook employees live.
For a company like Facebook, which relies on its 7 million small businesses that make up a hefty portion of its ad revenue, helping them by offering grants, even if only to 10,000 of them, can make a difference across these communities. And while Facebook reported $69.6 billion in ad revenue for 2019, reports indicate the company may take a $15 billion hit this year.
The initiative, which focuses on supporting “eligible minority and women-owned businesses,” will begin awarding money to small businesses in New York and Seattle next week, the company announced.
The company said the grants focus on companies that “have been in business for over one year, that have between two-50 employees, reside in locations we have Facebook offices or data centers and don’t have to be a business using our platforms to apply.”
This is part of the $100 million—split between cash grants and free ad credits—that Facebook previously committed to helping out 30,000 small and mid-sized businesses in more than 30 countries earlier this month.
Additionally, the company is rolling out new tools for businesses to support themselves. While individual Facebook users could previously launch fundraising campaigns, the company said Thursday they will expand that to businesses.
“Previously, businesses were not able to use our personal fundraising features, but given the challenges many SMBs are facing during COVID-19, we want to empower people to support their favorite businesses or enable the business owner to start a Facebook personal fundraiser,” according to a company spokesperson.
Additionally, Facebook is rolling out a new feature whereby companies can sell gift cards. Instagram will eventually introduce gift cards as well. With many businesses suspending or limiting their operations, gift cards can help cash flow at a tenuous time. The platform is also introducing new ways for businesses to notify their customers about changes in services, like temporary closures or new delivery options.
“We’ve built a way for people to support their favorite local business or restaurant with digital gift cards, expanded our fundraising tool to let people raise money and support small business owners directly and made it easier for businesses to communicate temporary service changes to their customers,” Facebook COO Sheryl Sandberg said in a post published Thursday evening. “These are rolling out today in the U.S. and our teams are working hard on bringing these tools to more countries, as we know they can be a lifeline for businesses to quickly get the capital they need until it is safe to open their doors again.”
In an email, Facebook cited a recent Goldman Sachs study that found 96% of small businesses say they have already been impacted by COVID-19.
Last week, Google announced more than $800 million dollars in support for small businesses and those working on crisis-response efforts, but most of that money was in ad credits. The company gave a quarter of that money in cash to “NGOs and financial institutions around the world to help provide small businesses with access to capital.” For Facebook’s part, the spokesperson said the “majority of this grant will be cash, and for businesses that use our services, they’ll receive ad credits as well.”
Facebook’s stock has taken a hit as the economy tanked in recent weeks. The company has seen that “many more people are using [its] apps,” consistent with reports of increased traffic reported by other social platforms.
While the federal government finally passed a $349 billion bailout of American small businesses last week, there’s still some uncertainty about the new loan program and whether Congress will allot more money when the funds are exceeded.