Continuing this summer’s notable $1 billion commitment to advance racial equality and economic opportunity, Bank of America recently announced an additional investment: $150 million to 40 minority-led funds based in 21 markets across the U.S. This move is part of the larger effort by the U.S. financial community and marginalized community advocates, like Robert F. Smith, to remove barriers to financial mobility for communities historically barred from equal opportunities.
In addition to the $150 million investment, Bank of America announced additional investments in minority depository institutions (MDIs) and community development financial institutions (CDFIs). MDIs and CDFIs offer lending, housing, neighborhood revitalization and other banking services to communities that often have limited access to traditional financial institutions.
Robert F. Smith, the Founder, Chairman and CEO of Vista Equity Partners, weighed in via his Twitter account on this historic announcement.
“This is how you make a real impact on communities of color. It’s an important step towards enabling more minority entrepreneurs to grow their businesses and empower communities at the same time,” Smith said. “Hoping others can follow this tremendous example.”
The Good Business of Racial Equity Work
Since this summer, other major banks have followed Bank of America’s lead, and have made headlines investing millions in minority-owned groups as a part of a greater initiative to invest in racial equity. This January, Citigroup Inc. hired four Black-owned firms to distribute a $2.5 billion bond issuance to investors. In October 2020, JPMorgan Chase said it would invest $30 billion over the next five years to promote racial and ethnic equity in the U.S.
Evidence shows that investing in racial equity and mending the wealth gap is not only good for society, but good for business. Over the past years, funds invested in environmental, social, and governance (ESG) have outperformed their peers in both up and down markets, according to a Morningstar report.
As a philanthropist, businessman and entrepreneur, Smith has been a leader in the movement to invest millions in America’s Black-owned businesses. According to Smith, there is no better time than now to rewrite corporate America’s history of institutional racism and reverse the scales of injustice.
Read more about Bank of America’s work towards achieving racial equity, economic opportunity, and community outreach.