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Netflix is looking to tackle systemic racism by shifting some of its cash holdings to financial institutions that support Black communities in the U.S.
“As part of our commitment to racial equity, we are turning understanding into action,” the streamer said on its blog Tuesday. Netflix has already voiced solidarity with nationwide protests over the death of George Floyd by sharing on its social accounts the “duty to our Black members, employees, creators and talent to speak up.”
In its latest move, Netflix said it will shift 2 percent of its cash holdings — initially up to $100 million — towards banks and organizations that directly support Black communities. “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 added.
Netflix CFO Spence Neumann in his own statement obtained by The Hollywood Reporter said directing cash to banks supporting Black communities would help end the “capital isolation” those communities faced and the multigenerational racial wealth gap directly impacting many Black families.
“Moving some of Netflix’s cash deposits into Black-focused institutions and organizations in the U.S. can put more capital to work for the people and businesses in these communities and narrow the gap,” Neumann argued.
The Netflix blog reported Black-owned or -led banks comprise only 1 percent of commercial banking assets in the U.S., helping to explain why 19 percent of Black families face either negative wealth or have no assets for support in hard times.
“Black banks have been fighting to better their communities for decades but they’re disadvantaged by their lack of access to capital,” the blog stated. Behind its $100 million commitment, Netflix will put $25 million in a newly established fund called the Black Economic Development Initiative to invest into Black financial institutions serving low- and moderate-income communities and Black community development corporations in the U.S.
Another $10 million will be deposited in the Hope Credit Union “to fuel economic opportunity in underserved communities across the Deep South.”
“This capital will fuel social mobility and prosperity in the low- and moderate-income communities these groups serve. We plan to redirect even more of our cash to Black-led and focused institutions as we grow, and we hope others will do the same,” Netflix said.
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