Netflix, the world's leading streaming entertainment service, has announced that it will be allocating two percent of its cash holdings - initially up to $100 million - into Black-owned financial institutions and organizations that directly support Black communities in the U.S. They are the first Fortune 500 company in history to ever do anything like this!
According to a press release on the company's web site, Netflix will start its $100 million commitment by first moving $25 million 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.
In addition, $10 million will immediately 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.
Another announcement will be made in the near future regarding the remaining $65 million, which will likely be split up among several other institutions including the nation's largest Black-owned bank, OneUnited Bank.
Other Fortune 500 companies encouraged to do the same
Netflix reports that "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."
The company says, "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."
Launched in 1997, Netflix currently has more than 183 million paid memberships in over 190 countries. Their annual revenue is usually around $20 billion.