Netflix to shift $100 million in cash into black-owned financial institutions

Netflix Inc. will shift as much as $100 million to lenders that serve the Black community, making it the largest company yet to pledge cash to historically underfunded financial institutions.

The online TV giant will start by shifting $25 million into the Black Economic Development Initiative, a new fund that will invest in Black-owned financial institutions serving low-income communities, and $10 million to Hope Credit Union. Going forward, the company will steer 2% of its cash on hand, which currently amounts to about $5 billion, to financial organizations that directly support African-American communities.

News of Netflix’s commitment sent shares of Black-owned banks soaring Tuesday. Carver Bancorp Inc. jumped as much as 173% in New York trading and Broadway Financial Corp. gained as much as 83%.

Large U.S. companies have rushed to show support for African Americans following the death of George Floyd, one of several Black people killed by police in the past few months. Many businesses and rich individuals have pledged money to civil rights causes, including Netflix Chief Executive Officer Reed Hastings, who earmarked $120 million of his personal fortune to historically Black colleges and universities. But his company wanted to propose a solution that addresses more systemic causes of inequality.

 

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