News By/Courtesy: Riya Singh | 01 Jul 2020 12:47pm IST

HIGHLIGHTS

  • Netflix said it will allocate 2% of its cash on hand — with an initial outlay of up to $100 million
  • The move comes as US companies face increasing pressure after the death of African American George Floyd in police custody
  • Netflix reported $5.15 billion in cash and equivalents as of March 31, 2020, so 2% of that is about $100 million

Netflix said it will allocate 2% of its cash on hand — with an initial outlay of up to $100 million — to banks and other financial institutions that directly support Black communities in the U.S.

 The streamer announced the initiative on Tuesday, saying banks led or owned by Black people represent a minuscule portion of the country’s banking assets.

 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 said in a blog post it will start with $35 million, of which $25 million will be moved to a new fund, "Black Economic Development Initiative", and $10 million will go to Hope Credit Union for creating opportunities in underserved communities.

The move comes as US companies face increasing pressure from investors, consumers, workers to take action against widespread racial inequality after the death of African American George Floyd in police custody.

“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.

“This capital will fuel social mobility and prosperity in the low- and moderate-income communities these groups serve,” Netflix said on Tuesday.

Netflix reported $5.15 billion in cash and equivalents as of March 31, 2020, so 2% of that is about $100 million. The funding for financial institutions serving Black communities will increase as the company grows, Netflix said.

 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.

 Earlier this month, Chief Executive Officer Reed Hastings donated $1 million to think tank The Center for Policing Equity, which promotes police transparency and accountability through its research.

 THIS ARTICLE DOES NOT INTEND TO HURT THE SENTIMENTS OF ANY INDIVIDUAL, COMMUNITY, SECT, OR RELIGION ETCETERA. THIS ARTICLE IS BASED PURELY ON THE AUTHOR'S PERSONAL VIEWS AND OPINIONS IN EXERCISE OF THE FUNDAMENTAL RIGHT GUARANTEED UNDER ARTICLE 19(1)(A) AND OTHER RELATED LAWS BEING FORCE IN INDIA, FOR THE TIME BEING.

 

Section Editor: Pushpit Singh | 01 Jul 2020 13:23pm IST


Tags : #netflix

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