The streaming giant Netflix is pledging 2 percent of its cash holdings to provide “economic opportunity for Black communities.” The company plans to initially commit up to $100 million, but the quantity could grow alongside its cash holdings over time.
“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. ” Netflix’s director of talent acquisition and treasury director, Aaron Mitchell and Shannon Alwyn said in a blog post
As the first step in this $100 million commitment, Netflix will be holding $35 million of their 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.
Netflix plan to redirect even more of their cash to Black-led and focused institutions as they grow. 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.
