Tech giant PayPal builds on its $530 million commitment to racial equity, social justice

Tech giant PayPal builds on its $530 million commitment to racial equity, social justice

By BCN Executive Editor Wesley Brown – June 4, 2021 – Online payment giant PayPal Holdings Inc., which a 64% increase in revenue in 2020, continues to “put its money where its mouth” in regard to Wall Street and Silicon Valley’s commitment to ongoing social justice and racial equity movement following the George Floyd murder last summer.

On Wednesday (June 2), PayPal announced it will deposit $135 million of its capital into mission-driven financial institutions and management funds that help Black-centric communities fight barriers to economic equity. The organizations receiving those funds include Hope Credit Union, OneUnited Bank, Self-Help Federal Credit Union, CNote’s Wisdom Fund and various smaller institutions through a CNote Promise Account.

Paypal said these investments are part of the West Coast tech giant’s $535 million commitment to strengthen Black-owned businesses and underserved communities, and help drive financial health, access and generational wealth creation. With these deposits, PayPal said has now committed more than $500 million of capital through its racial equity initiatives, including a deposit in Optus Bank; an investment in LISC’s Black Economic Development Fund; investments in 19 Black and Latinx-led venture capital funds; and grants to Black-owned small businesses and community nonprofits that support them. PayPal is in active conversations with several additional financial institutions and expects to deploy more funds throughout the year.   

“By partnering with financial institutions that have deep ties to Black and other underserved communities of color, we can create economic opportunity and make tangible progress toward closing the racial wealth gap,” said Paypal President and CEO Dan Schulman. “Addressing systemic economic disparities and injustice will take sustained action across the private and public sectors. We are committed to doing our part to break the cycle of inequality.”

“Financial institutions owned by people of color play an outsized role in closing the racial wealth gap by providing greater access to financing for diverse business owners and homebuyers,” said Bill Bynum, CEO of Hope Credit Union. “Unfortunately, investment in these institutions and the communities they serve has never been adequate. PayPal’s strategy recognizes that in an increasingly diverse nation, investing in racial equity is not only the right thing to do, but it’s good for business.” 

In early February, Hope Enterprise in Jackson, Miss., and Wall Street investment bank Goldman Sachs announced they will work with seven southern cities and nine historically Black colleges and universities (HBCUs) to form an innovative collaborative that invests in small businesses and entrepreneurs in the Deep South. The City of Little Rock and Philander Smith College will participate in the multi-million-dollar business accelerator. See that story here.

Since 1994, Hope Credit Union has generated more than $2.9 billion in financing that has benefitted more than 1.7 million people in Alabama, Arkansas, Louisiana, Mississippi, and Tennessee. In the Little Rock metropolitan area, Hope operates a credit union in the College Station community.

“PayPal’s investment in the Promise Account will mobilize deposits across CNote’s nationwide network of mission-driven depository institutions, fostering greater capital access and economic justice for communities of color,” stated CNote CEO Catherine Berman. “PayPal’s Wisdom Fund commitment is an investment in the future of women of color, providing the loan capital, business coaching and funding research to fuel greater economic freedom and wealth creation for BIPOC women business owners across America. Working together, we can help address the system, not just the symptoms, behind economic inequality in America.” 

“Partnerships between America’s leading corporations, like PayPal, and Black-owned institutions like OneUnited Bank, are critical to creating the access to capital needed to address the economic challenges of underserved communities,” said added Kevin Cohee, chairman and CEO of OneUnited Bank, one of the nation’s largest Black-owned banks. “ These types of deposits make lending and social justice programs possible. OneUnited Bank looks forward to continuing to build this relationship with PayPal as we fight to eradicate the racial wealth gap.” 

PayPal leads with action, dollars

Since the George Floyd murder last summer, PayPal has been one of the top Silicon Valley corporations at the forefront of the social justice and racial equity movement, provide hundreds of millions of dollars in immediate assistance to Black-owned businesses amid the pandemic, while setting the foundation for sustained engagement and progress towards economic equality and social justice. For example, in late December PayPal invested $50 million in the Local Initiatives Support Corporation (LISC) Black Economic Development Fund. It is the largest single investment in the fund designed to support Black-led banks, institutions and businesses and expand economic opportunity in the communities they serve.

In late May, the San Jose, Calif.-based tech giant with annual revenue exceeding $21.4 billion announced that it will invest an additional $50 million in 11 Black- and Latinx-led early-stage venture capital funds, including Aperture Venture Capital; Collab Capital; Interlace Ventures; Kapor Capital; MaC Venture Capital; Noemis Ventures; Seae Ventures; SV LATAM Capital; and three additional funds. These build upon the $50 million investment by PayPal in eight Black and Latinx-led early-stage venture capital funds announced in October 2020.

In February, PayPal also announced that it had entered multi-year partnerships with CodeHouse, INROADS and the National Association of Black Accountants to develop and hire Black and diverse talent in the mostly white tech sector. In addition to these partnerships, PayPal said it is strengthening its inclusive hiring processes by implementing practices that help mitigate conscious and unconscious biases and blind spots throughout the hiring process – from the writing of job descriptions, to reviewing resumes and conducting interviews.

“As the tech industry moves to diversify its talent pipeline, there’s no better time than now to inspire young people of color to pursue careers in STEM,” said Ernest Holmes, president and co-founder, CodeHouse. “Through our partnership with PayPal, we’ll be able to enhance our scholars’ existing talent and set them up to succeed in their careers.” 

Among other things, Paypal CEO Schulman has spoken out concerning hate crimes against members of the Asian and Pacific Islander community and spoken out about efforts in several states to prevent African Americans and other minorities from having an equal and fair access to voting. It has also financial supported initiatives to protect provided funded to Black and Latina-owned business through the U.S. Small Business Administration’s Paycheck Protection program.

For those Black-owned business left out of the PPP and other SBA loan programs, PayPal’s Empowerment Grants provide $10 million grant in funding to struggling Black entrepreneurs, startups and creatives impact by COVID-19.  That program, led by the Black-centric Association for Enterprise Opportunity, has since paused accepting new applications due to an overwhelming response.

However, New Orleans art gallery Studio BE kept creating art for its community through the pandemic, with help from a PayPal grant. House in a warehouse in the Louisiana city, Studio BE was created in 2016 by street artist and muralist Brandan ‘BMike’ Odums with the goal of “cultivating the power and responsibility of artists to create a better world.”

Most recently, that vision guided the Studio to create a coloring book and activity guide for local students, whose virtual schooling during the pandemic didn’t include art classes. The Studio initially gave the book, entitled “Home Is Where the Art Is,” away for free at its warehouse, and now sells it online. “We hope this book inspires you to express your creativity, ask questions, and share your gifts with the world,” reads the book’s description.

The Studio used the funds to help keep its 12 employees on payroll and start printing the coloring book, which has had an overwhelming response from parents, teachers and children reaching out to express gratitude and share completed pages. “It’s cool to see how people have used the book. People have created collages from the pages – and even sculptures inspired by it,” said Liz LeFrere, who manages Studio BE and practices wax sculpture.

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