Netflix on Tuesday said it would start putting 2% of its cash holdings — or up to $100 million initially — into financial institutions and programs that help support Black Americans.
The streaming heavyweight said it will start with a $35 million commitment to two organizations, including $25 million going to the Black Economic Development Initiative, a new fund that will specifically invest in “low and moderate-income communities,” per Netflix. Another $10 million will be go to Hope Credit Union, with the goal of investing in underserved communities in the South; a few thousand Black homebuyers and entrepreneurs should be helped over the next two years by the investment in Hope, according to the company.
“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 announcing the move.
Netflix added that its investment in Black communities aims to reduce the wealth gap between Black and white Americans.
“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% 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,” Netflix said. “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.”
Tuesday’s decision comes a few weeks after Netflix CEO Reed Hastings and his wife Patty Quillin donated $120 million to several historically Black colleges.