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June 30, 2020, 12:11 p.m. EDT

Netflix launches $100 million commitment to help close ‘centuries-long financial gap between Black and white families’

Company joins Apple, PayPal, Alphabet in pledging financial support for Black communities

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By Emily Bary


Bloomberg News/Landov
Netflix said Tuesday that it would allocate 2 percent of its cash holdings to supporting Black communities.

Netflix Inc. announced Tuesday an effort to grow economic opportunities for Black communities by allocating money to banks and other institutions that help provide financial support.

The company plans to put 2 percent of its cash holdings, or up to $100 million initially, toward financial institutions and other groups “that directly support Black communities in the U.S.”

Netflix /zigman2/quotes/202353025/composite NFLX +2.07%  argues in a blog post that such efforts can help close the “centuries-long financial gap between Black and white families” in the U.S.

“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,” wrote Netflix’s talent acquisition director Aaron Mitchell and treasury director Shannon Alwyn in the post. They cited statistics from the Federal Deposit Insurance Corporation indicating that Black-owned or Black-led banks represent just 1 percent of commercial banking assets in the U.S.

Read: After years of talk, tech companies appear to be getting serious about diversity efforts

The company is initially allocating $35 million of its $100 million commitment to two vehicles. Netflix will designate $10 million to the Hope Credit Union in an effort to boost economic opportunity in the Deep South. The company will hold $25 million in a newly established fund called the Black Economic Development Initiative that will be managed by the nonprofit Local Initiatives Support Corporation.

Netflix joins Apple Inc. /zigman2/quotes/202934861/composite AAPL +3.75% , PayPal Holdings Inc. /zigman2/quotes/208054269/composite PYPL +2.78% , Alphabet Inc.’s /zigman2/quotes/202490156/composite GOOGL +1.14%   /zigman2/quotes/205453964/composite GOOG +1.17%  YouTube, and other tech stalwarts that have made financial commitments to helping Black and minority communities.

Don’t miss: PayPal CEO says corporate activism can help spur the ‘tipping point’ that brings social change

Netflix shares have gained 22% over the past three months as the S&P 500 /zigman2/quotes/210599714/realtime SPX +1.60%  has risen 17%.

/zigman2/quotes/202353025/composite
US : U.S.: Nasdaq
$ 482.88
+9.80 +2.07%
Volume: 3.77M
Sept. 25, 2020 4:00p
P/E Ratio
81.47
Dividend Yield
N/A
Market Cap
$208.64 billion
Rev. per Employee
$2.22M
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/zigman2/quotes/202934861/composite
US : U.S.: Nasdaq
$ 112.28
+4.06 +3.75%
Volume: 149.98M
Sept. 25, 2020 4:00p
P/E Ratio
34.13
Dividend Yield
0.73%
Market Cap
$1876.25 billion
Rev. per Employee
$1.98M
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/zigman2/quotes/208054269/composite
US : U.S.: Nasdaq
$ 187.25
+5.06 +2.78%
Volume: 7.61M
Sept. 25, 2020 4:00p
P/E Ratio
85.93
Dividend Yield
N/A
Market Cap
$213.76 billion
Rev. per Employee
$710,138
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/zigman2/quotes/202490156/composite
US : U.S.: Nasdaq
$ 1,439.06
+16.20 +1.14%
Volume: 1.52M
Sept. 25, 2020 4:00p
P/E Ratio
32.10
Dividend Yield
N/A
Market Cap
$969.59 billion
Rev. per Employee
$1.39M
loading...
/zigman2/quotes/205453964/composite
US : U.S.: Nasdaq
$ 1,444.96
+16.67 +1.17%
Volume: 1.32M
Sept. 25, 2020 4:00p
P/E Ratio
32.23
Dividend Yield
N/A
Market Cap
$969.59 billion
Rev. per Employee
$1.39M
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/zigman2/quotes/210599714/realtime
US : S&P US
3,298.46
+51.87 +1.60%
Volume: 2.18B
Sept. 25, 2020 5:06p
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Emily Bary is a MarketWatch reporter based in New York.

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