Twitter will invest $100 million in community development financial institutions, the New York Times’ DealBook first reported on Thursday, joining a handful of major tech companies including Netflix, PayPal, and Square in corporate finance initiatives aimed at combating racial injustice and poverty.
Twitter’s $100 million investment accounts for 1% of its cash pile, DealBook said.
The social media giant told DealBook it would reinvest the interest it earns from the new program, which will use Twitter’s investment to make loans at CDFIs nationwide, into a non-profit organization dedicated to financial literacy and economic inclusion.
CDFIs provide lending and banking services to low-income and underbanked customers, many of whom are people of color.
In September, fintech giant Square (also headed by Twitter CEO, Jack Dorsey) announced an initiative to invest $100 million in minority and underserved communities, including $25 million to CDFIs.
41%. That’s the rate of closures for Black businesses between February and April during the peak of the Covid-19 pandemic, the Federal Reserve Bank of New York found in August, more than twice the rate of white businesses.
5.7% of people in U.S. leadership positions at Twitter are Black, according to Twitter’s most recent diversity report. 16.8% are Asian, 4.3% are Latinx, 2.4% are multiracial, and 56.8% are white.
Twitter’s new initiative follows similar efforts from Netflix, PayPal, and Square. In June, Netflix announced it would move 2% of its cash pile—some $100 million—to financial institutions that serve Black communities, citing “systemic racism in America” that had “sustained a large financial gap between Black and White families.”
PayPal said last month it would invest $50 million in early-stage Black- and Latinx-led venture capital firms.
Twitter faced intense scrutiny during the election over its policies aimed at limiting the spread of misinformation, especially as it flagged tweets by President Trump that contained erroneous claims of victory.