JPMorgan just pledged $50 million in aid to small businesses and nonprofits as the coronavirus sends the economy into a nosedive
- JPMorgan Chase announced Wednesday it's launching a $50 million fund in humanitarian aid and small business grants to help communities recover from the novel coronavirus outbreak.
- Recipients include the World Health Organization and United Nation Foundation's COVID-19 Solidarity Response Fund and the nonprofit Feeding America.
- Peter Scher, JPMorgan Chase's head of corporate responsibility, told Business Insider this is a "historic time of need" that requires businesses to step up and help their communities.
- The financial institution joins a number of companies making changes in the wake of the pandemic, including Facebook, which announced on Monday $100 million in aid to small businesses.
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JPMorgan Chase is announcing a $50 million package in global humanitarian aid and grants for nonprofits and small businesses amid growing fears of an impending recession caused by the coronavirus pandemic.
$5 million will go to provide immediate healthcare, food, and other humanitarian relief; $2 million will go to nonprofits responding to the COVID-19 crisis; and another $8 million will go to assist small businesses vulnerable to significant economic hardships in the US, China, and Europe.
The remaining $35 million will be distributed over time to nonprofit and small businesses that have been largely predetermined, according to a company spokesperson.
For example, $2 million will go to the COVID-19 Solidarity Response Fund that's jointly run by the World Health Organization and United Nation Foundation. $1 million will go to the nonprofit Feeding America, while another $1 million will go to the China Foundation for Poverty Alleviation, a nonprofit based in Beijing.
"Clearly, this is a historic time of need," Peter Scher, JPMorgan Chase's head of corporate responsibility, told Business Insider. "We've been living this unprecedented health challenge over the past weeks and months, and we think it's part of our responsibility and part of our approach in these types of situations to think about the immediate needs our communities face."
Social distancing, while good to reduce the spread of the novel coronavirus, has hit small businesses like restaurants and retail stores especially hard. And small business owners may not have much in emergency savings to help them pull through a possible economic downturn.
On Wednesday, the Dow Jones Industrial Average dropped 1,030 points, or more than 4%. The S&P 500 and Nasdaq Composite also fell more than 4%, as market volatility remains high. With a potential recession looming, research from the JPMorgan Chase Institute shows that 50% of small businesses have less than 15 cash buffer days, meaning they could be majorly disrupted by the pandemic and in desperate need of funds.
Bigger companies are now jumping in to help provide those funds. On Tuesday, Facebook COO Sheryl Sandberg announced that the tech giant is investing $100 million to help small businesses affected by the novel coronavirus. Amazon and Salesforce have made financial commitments to help small businesses in Seattle and San Francisco, respectively. Delivery services like Grubhub and UberEats are deferring or waiving commissions in order to encourage diners to order more takeout from independent local restaurants. Another 200 companies including Alphabet, Nasdaq Inc, KPMG, HP, and Volkswagen have joined the World Economic Forum and World Health Organization in working together to keep global supply chains running.
According to Scher, these actions are part of a larger trend.
"I think there's a broader recognition within the business community that when you have a crisis like this, and you have a health crisis that impacts our communities in the way that it does, we have a moral and a business obligation to help address that," he said.
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