On Tuesday, Netflix announced a major act of charitable giving, revealing that going forward it will allocate 2% of its cash holdings—which includes an initial figure of up to $100 million—and dedicate them to the economic development of Black communities. This will be accomplished both via donations to non-profit organizations and investment in Black-owned financial institutions and organizations that support Black communities. That’s in addition to other work the streaming giant is doing for racial equality, such as its ongoing Black Lives Matter collection of movies and TV series.
“We know great stories can create empathy and understanding,” said director of talent acquisition Aaron Mitchell in a statement, alongside Shannon Alwyn, Netflix’s director of treasury. “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. 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 cited data from the FDIC, showing that Black-owned or Black-led banks account for only 1% of American banking assets. Given this, and the systemic racism of the almost universally white banking system, Black applicants have more difficulty being granted loans or comparable offers/rates, even with equal credit.
“Black banks have been fighting to better their communities for decades but they’re disadvantaged by their lack of access to capital,” said the statement. “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.”
$35 million in cash will immediately be split between two organizations—the Black Economic Development Initiative, and the Hope Credit Union. The former will invest the funds into Black banks and credit unions that serve low and moderate-income communities, while the latter will “fuel economic opportunity in underserved communities across the Deep South.”
“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,” continues the statement from Netflix. “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.”