KUDOS to Netflix for Helping to Build economic opportunity for Black communities: Committing 100 Million to Black-Owned Banks
It’s great to see major corporations put their money up instead of jumping on board and offering lip service during these challenging times which have reached their peak for African Americans in the US.
The streaming behemooth posted on their website “At Netflix, we know great stories can create empathy and understanding. Stories like Ava DuVernay’s 13TH and Explained’s Racial Wealth Gap show how systemic racism in America has sustained a centuries-long financial gap between Black and White families. As part of our commitment to racial equity, we are turning understanding into action. Going forward, Netflix is going to allocate two percent of our cash holdings – initially up to $100 million – into financial institutions and organizations that directly support Black communities in the U.S.” They went on to say …
“We believe bringing more capital to these communities can make a meaningful difference for the people and businesses in them, helping more families buy their first home or save for college, and more small businesses get started or grow. According to the FDIC, banks that are Black-owned or led represent a mere one percent of America’s commercial banking assets. This is one factor contributing to 19 percent of Black families having either negative wealth or no assets at all – more than double the rate of White households – according to the U.S. Federal Reserve. Black banks have been fighting to better their communities for decades but they’re disadvantaged by their lack of access to capital. The major banks, where big multinational companies including ours keep most of their money, are also focusing more on improving equity, but not at the grassroots level these Black-led institutions can and do. So we wanted to redirect some of our cash specifically toward these communities, and hope to inspire other large companies to do the same with their cash deposits.”
As the first step in this $100 million commitment, we will be holding $35 million of our cash in two vehicles:
- $25 million will be moved to a newly established fund called the Black Economic Development Initiative. It will be managed by the Local Initiatives Support Corporation (LISC), a non-profit with a track record of developing underinvested communities. They will invest the funds into Black financial institutions serving low and moderate-income communities and Black community development corporations in the U.S.
- $10 million will go to Hope Credit Union in the form of a Transformational Deposit to fuel economic opportunity in underserved communities across the Deep South. Bill Bynum, CEO of HOPE, has spent the last three decades advancing economic mobility in distressed communities.
This capital will fuel social mobility and opportunity in the low- and moderate-income communities these groups serve. We plan to redirect even more of our cash to Black-led and focused institutions as we grow, and we hope others will do the same. For example, if every company in the S&P 500 allocated a modest amount of their cash holdings into efforts like the Black Economic Development Initiative, each one percent of their cash would represent $20-$30 billion of new capital. And that would help build stronger communities, offering more Black families pathways to prosperity and a more equitable future.