Corporations stepping up as fund sources for social justice
In the months since the police killing of George Floyd sparked a racial reckoning in the United States, American corporations have emerged as an unexpected leading source of funding for social justice.
Corporate giving to racial equity causes has far outpaced donations from foundations and individual philanthropists since Floyd’s killing in May, according to the philanthropy research organization Candid.
Companies donated or pledged about $8.2 billion of the $12 billion in total contributions that were earmarked for racial equity — the “first time direct corporate giving to racial equity causes has reached this magnitude,” said Andrew Grabois, Candid’s corporate philanthropy manager.
Sizable commitments have come from corporations ranging from JPMorgan Chase, PayPal and Mastercard to Microsoft, Salesforce and the National Football League. Those pledges don’t even count other minorityfocused investments, like a JPMorgan initiative to lend to minority home buyers and small businesses, that could eventually benefit the corporations themselves.
The trend signals a shift for large corporations, fueled by the evolving expectations of younger employees and consumers about corporate responsibilities to social causes. Advocates say the corporate money won’t be enough to soon achieve the racial equity in hiring, housing and policing or the investment in Black communities and institutions that they’ve sought. But it marks a start.
“The world is changing, and the expectations of how companies engage are changing,” said
Brandee McHale, Citi’s head of community investing and development.
The catalyst, of course, was the graphic and widely viewed killing of Floyd last May at the hands of the Minneapolis police, with video footage showing the former officer Derek Chauvin pressing his knee against Floyd’s neck for about nine minutes.
“When George Floyd was killed, consumers and stakeholders called on companies to invest in issues related to racial equity, and many responded,” Grabois said.
Since late May, Grabois said, financial commitments by companies to racial equity causes have grown “exponentially larger” than any other cause other than COVID-19. A report by McKinsey & Company, which tracked corporate responses from May to October, found that of the top 1,000 U.S. companies, 18% made internal commitments, like diversifying their hiring, and 22% pledged to promote racial equity through donations or other means. Including pledges of business
investments, the report found $66 billion was committed to such causes.
Nearly 80% of those commitments targeted affordable housing and business development, with 86% of the money coming from the financial services industry.
For some brands, like Ben & Jerry’s, the donations were extensions of long-standing commitments to racial justice. For others, the pandemic and protests led them to face “the kinds of really difficult social issues” that many had previously preferred not to engage with, said Melissa Berman, CEO of Rockefeller Philanthropy Advisors.
Berman suggested that some pressure has come from millennial and Generation Z consumers who increasingly want the money they spend and invest to be used in ways consistent with their values.
A survey last year by the research firm YPulse found that 69% of these younger buyers believe that brands should engage with the Black Lives Matter movement.