Lauren Weber, Wall Street Journal, December 21, 2020
U.S. companies pledged tens of billions of dollars toward racial-equity efforts in 2020. A challenge for 2021 and beyond: tracking where the dollars go and what changes the pledges will bring.
Big businesses made commitments of a cumulative $35 billion in the past six months, according to a review of announcements by The Wall Street Journal, in response to a national debate about systemic racism following the killing of George Floyd while being arrested by Minneapolis police on May 25. Companies say the money will go toward boosting the net worth of Black families, creating professional opportunities for minorities and diversifying their own ranks, among other outcomes.
The bulk of the $35 billion stems from JPMorgan Chase & Co.’s October pledge to invest $30 billion over the next five years into such efforts as financing affordable housing and opening branches in neighborhoods where financial services are scarce.
Major banks are behind some of the other biggest pledges, including $1 billion from Bank of America Corp. and $1.15 billion by Citigroup Inc. to provide capital to Black business owners and home buyers, among other measures.
Elsewhere, Walmart Inc. has pledged to found a center for racial equity, through which it will donate $100 million to nonprofit groups over five years. Alphabet Inc.’s Google is putting $175 million into supporting Black business owners, startup founders, job seekers and developers, in addition to a $100 million YouTube fund for Black artists and creators.
The sums—including more than $100 million raised by chief executives for a startup unveiled this month that is aimed at creating a million jobs for Black Americans—have the potential to improve upward mobility for Black families and help remedy longstanding inequities, advocates say.
Some companies are promising transparency and follow-up with their pledges, though relatively few have publicly outlined how they will monitor and measure their initiatives, or how much of the money pledged this year represents new spending.
In most cases, no one is looking to determine the success of companies’ big philanthropic announcements, said Mark Kramer, a senior lecturer at Harvard Business School and co-founder of FSG, a social-impact consulting firm.
Facebook Inc. pledged to spend $100 million annually with Black-owned suppliers starting in 2021, nearly tripling its spending in 2019. The company publicly reports how much it spends with suppliers owned by minorities, women, veterans and other groups and says it will add more granular data to the report, a spokeswoman said. The company is also earmarking $100 million in grants and ad credits to Black creators, small-business owners and nonprofits, the majority of which is being disbursed as cash, the spokeswoman said.
Some of the biggest commitments promise to funnel capital to lenders that serve Black communities. Such allocations often have a ripple effect, executives at these financial institutions say, enabling them to lend to more Black homeowners and small businesses, which can help Black families build wealth. Ultimately, the results will be evident if the Black communities these lenders serve see new and more vibrant small businesses, increased employment and rising household income and wealth.