Netflix is putting its money in support of Black communities, announcing it will place $100 million in banks and credit unions that serve that constituency.
"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.," Netflix said on its blog. "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."
In a statement to THR, Netflix CFO Spence Neumann said, "Moving some of Netflix’s cash deposits into Black-focused institutions and organizations in the U.S. can put more capital to work for the people and businesses in these communities and narrow the gap."
Netflix noted that 19 percent of Black families have no assets or are in debt, and "banks that are Black-owned or led represent a mere one percent of America’s commercial banking assets." The company's goal is to infuse new capital into these communities.
Netflix will create the Black Economic Development Initiative with $25 million, to "invest into Black financial institutions serving low and moderate-income communities and Black community development corporations in the U.S." Another $10 million will go to the Hope Credit Union "to fuel economic opportunity in underserved communities across the Deep South."
Netflix's statement appears in its entirety below:
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.
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.
-Aaron Mitchell, Director, Talent Acquisition
Shannon Alwyn, Director, Treasury