Netflix to move $100 million to Black-owned banks
Netflix is shifting $100 million in cash to financial institutions that serve the Black community in a move that draws attention to the racial wealth gap in America. The company sits on $5.1 billion in cash, and 2% of that will be moved to Black-led banks, Netflix announced Tuesday. The company said it first will inject $25 million into a fund managed by the Local Initiatives Support Corporation, a nonprofit that develops underinvested communities. Another $10 million will go to Hope Credit Union, which provides capital for the nation’s most impoverished regions in the Deep South. The news was praised by billionaire Robert F. Smith, a Black investor who made headlines last year after saying he’d pay off the debts of Morehouse College’s graduating class. “This is how we turn outrage into action,” Smith tweeted Tuesday. “$100m into Black-owned banks is a giant step forward. If major U.S. companies invest 2% of profits in left-behind communities, we can close the racial wealth gap in 10 years.” Netflix said it plans to redirect even more cash to Black-focused institutions as the company grows. “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,” Netflix said in a blog post. The announcement comes as several big companies tout commitments meant to increase financial equity in the country. Apple and Estée Lauder have publicized plans to buy more from Black-owned businesses. The shift happened amid renewed calls for equal access to opportunity and fair treatment of Black people in America in the wake of protests over the death of George Floyd. One of the most alarming signs that the nation has a long way to go is the centurieslong financial gap that exists between Black and white families. Black Americans hold just 2.6% of the nation’s wealth while constituting 13% of the population, according to the Brookings Institution. And the average white household has a net worth that’s $800,000 higher than the average Black household, the nonprofit says.