On Tuesday, Facebook (NASDAQ: FB) announced that it would endow struggling small businesses with $100 million in cash to quell the coronavirus pandemic and help business owners stay afloat.
In a blog post announcing the grants, Facebook said, "We know that your business may be experiencing disruptions resulting from the global outbreak of COVID-19. We've heard that a little financial support can go a long way, so we are offering $100 million in cash grants and ad credits to help during this challenging time."
The initiative is not limited to Facebook users only; any small business can apply, regardless of their presence on Facebook, Instagram or WhatsApp.
Though the program has not been initiated yet, here is what we know: the grants will be bestowed upon about 30,000 businesses spread across 30 countries where Facebook has employees. The grants are not entirely gratuitous; parts of the grants will be recycled into Facebook's own business in the form of "ad credits" that businesses can utilize to advertise on the platform, once they have bounced back. This makes economic sense in light of the fact that small businesses constitute a high portion of Facebook's advertising revenue. The company's revenue stems mostly from advertising sales but global advertising is projected to take a multibillion-dollar hit from coronavirus.
The social media behemoth has estimated that more than 140 million businesses uses its apps every month to streamline daily operations like tapping into new consumer bases, recruiting employees and solidifying community brands. Moreover, Facebook has predicted that more than 200 million people visit an Instagram "Business Profile" every day, highlighting the utility of such platforms as marketing and sales platforms.
The move is spearheaded by Sheryl Sandberg, the tech giant's chief operations officer, who has been rung up in the past for mishandling privacy and data issues.
"People across the globe are stepping up, rising to the enormous challenge in front of us. We want to do our part, too," Sandberg wrote in a Facebook post, where she makes all of her public announcements. "Small businesses are the heartbeat of our communities, and many of the people who run these businesses are heavily affected by the crisis - especially as more and more people sensibly stay home. The longer the crisis goes on, the greater the risk to small businesses and to the livelihoods of their owners and employees."
"We've heard loud and clear that financial support could enable them to keep the lights on and pay people who can't come to work," she added.