Netflix To Invest $100 Mln To Support Black Communities

(RTTNews) - Netflix Inc. said it will invest up to $100 million to support Black communities, as part of its commitment to racial equity.

The video streaming giant said in a blog post that it will allocate 2 percent of its cash holdings into financial institutions and organizations that directly support Black communities in the U.S. The company's initial investment will be up to $100 million.

The Federal Deposit Insurance Corporation or FDIC has said that banks that are Black-owned or led represent just 1 percent of America's commercial banking assets, Netflix noted.

This is one factor contributing to 19 percent 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.

"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," Netflix said.

The company added that as part of the first step in allocating the $100 million, it will hold $35 million of its cash in two vehicles.

Netflix will move $25 million to a newly established fund called the Black Economic Development Initiative. The fund will be managed by the Local Initiatives Support Corporation or LISC, a non-profit that is involved in developing under-invested communities.

LISC will invest the funds into Black-owned financial institutions serving low and moderate-income communities as well as Black community development corporations in the U.S.

Further, Netflix will allocate $10 million to Hope Credit Union in the form of a Transformational Deposit to fuel economic opportunity in underserved communities across the Deep South.

The video streaming giant said it intends to redirect more of its cash to Black-led and focused institutions and hopes other large U.S. companies will do the same.

Netflix noted that if each company in the S&P 500 allocated a modest amount of their cash holdings into efforts like the Black Economic Development Initiative, each 1 percent of their cash would represent $20 billion to $30 billion of new capital.