In a great effort to bridge the income gap between the blacks and whites, online streaming giant Netflix recently announced that it would invest around 2 per cent of its cash, which is estimated at $100 million, into Black-owned banks and community development organizations. It added that the funding would grow as the company gets bigger.
It said that black-owned financial institutions do not have as many opportunities in accessing capital and that this initiative will aid the banks in providing more lending to their communities. The organization also urged other companies to follow suit.
“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 director of talent acquisition Aaron Mitchell and treasury directory Shannon Alwyn wrote in a blog post.
In terms of the investments, Netflix said that it will begin by moving $25 million into the Black Economic Development Initiative, a new fund managed by the Local Initiatives Support Group, that will invest in Black-owned financial institutions serving moderate and low-income communities. A $10 million will be moved to the Hope Credit Union, which is based in Jackson, Mississippi, and serves around 1.5 million people to help create economic opportunities in Black communities.
“We are capital-starved, just like the people in the communities we serve,” Bill Bynum, CEO of Hope Credit Union said. “Having a global voice like Netflix say it’s important to invest in financial institutions like Hope is tremendously important, not just for the capital we will use to make mortgage loans and small business loans, but for what it says.”
Earlier, the CEO of Netflix Reed Hastings and his wife Patty Quillin said that they will donate $120 million to historically black colleges and universities (HBCU) towards student scholarships. The amount, they confirmed, would be distributed equally between three institutions: the United Negro College Fund, Spelman College and Morehouse College, both based out of Atlanta.
What do you think about this move by Netflix? Will it, indeed, help reduce the income gap between the blacks and whites? Do let us know your views in the comments section below.