Davos WEF
Davos WEF

Why PayPal is giving $500 cash advances to federal workers hurt by government shutdown

Key Points
  • PayPal CEO Dan Schulman set up a $25 million fund to help federal workers hurt by the government shutdown as part of his responsibility to serve the communities he serves.
  • The fund, called PayPal Credit, provides a $500 interest-free cash advance to each federal worker who applies.
  • Schulman told CNBC at the World Economic Forum in Davos on Wednesday that it is a CEO's responsibility to give back to the communities he or she serves.
Here's how PayPal is helping government workers affected by the shutdown

PayPal's CEO president and CEO, Dan Schulman, has a message for CEOs in America: Doing good should be part of every company's mission. That's why he decided to set up a $25 million fund to provide interest-free cash advances to federal workers last week.

"These folks are really hurting right now," Schulman told Squawk Box at the World Economic Forum in Davos, Switzerland, on Wednesday. "Many of these workers are living paycheck to paycheck. They really need our help."

Employees who use PayPal Credit will be able to get an advance of up to $500 each, without having to pay interest, and the program will last until the government reopens and employees receive their first paycheck.

The partial shutdown, now in its 33rd day, is the longest in history. The shutdown means 800,000 federal workers nationwide are going unpaid and some government functions remain impaired.

It also clouds the outlook for spending and the economy at large, since it can hurt business and consumer confidence.

Dan Schulman
Adam Galica | CNBC

As Schulman points out, with each passing day of the government shutdown, the finances of federal workers get worse. "Some of these workers are having a hard time buying groceries. They are rationing medications."

"Setting up this fund to assist federal workers in their time of need is our way of giving back to the communities we are a part of," said Schulman. "I think it's really important that CEOs think about their companies as part of the communities they live in — and serve. When you do the right thing, good things come back multifold to you."

When asked if PayPal would consider expanding the program, Schulman said it's something he would possibly consider.

"From the PayPal perspective, we have a lot of tailwinds at our back right now. Spending is down due to the shutdown, things are digitizing, and mobile is exploding. Despite all the challenges we face, our business remains strong."

Watch CNBC's full interview with PayPal CEO Dan Schulman