The streaming giant will permanently shift a share of its cash to financial institutions that serve Black communities, allowing them to lend more.
Netflix said on Tuesday that it will move up to $100 million, or 2 percent of its cash holdings, to financial institutions that focus on Black communities. It is intended to address a longstanding problem that these communities face: a lack of capital for the banks and other lenders that service them.
Earlier this month, the streaming company’s chief executive, Reed Hastings, pledged $120 million to support scholarships at historically Black colleges and universities. The move today by the company he runs aims to fight racial inequality not through charity, but via a routine commercial aspect of its business. As the company’s considerable cash pile grows, so might its deposits.
Netflix will start with $35 million, split two ways: $25 million in financing for a new fund, the Black Economic Development Initiative, that will itself invest in Black financial institutions; and depositing $10 million with the Hope Credit Union. These institutions join the roughly 30 banks worldwide that Netflix uses to hold its cash.
The big banks where Netflix and other multinational companies keep their money are not able to operate “at the grassroots level these Black-led institutions can and do,” Netflix said in a statement.
