Twitter is expected to announce that it is investing $100 million in Community Development Financial Institutions (CDFIs) as part of a new initiative aimed at combating “racial injustice and persistent poverty.” The announcement comes in the wake of other companies like Netflix and Starbucks similarly pledging to take concrete steps to close gaps in racial equity.
The investment will go to CDFIs across the United States, which will help close the financial gaps that often disproportionately benefit white people compared to people of color. More than 60% of customers in CDFI networks are people of color, making it a crucial investment in the future of a diverse and more equitable pool of entrepreneurs. Banks and financial institutions tend to lend money to people with preexisting relationships, and people of color have largely been shut out of those institutions because of systemic racism in our country’s history.
Robert F. Smith was one of the most prominent voices who raised this concern to decision makers in the spring as Paycheck Protection Program (PPP) loans were disbursed to businesses across the country as part of the federal government’s COVID-19 relief. Because the limited amount of funding was dispersed through larger financial institutions, many Black-owned businesses were shut out of the program because they didn’t have the existing relationships due to historic racism. Smith worked with policymakers in Congress to ensure a second round of funding was more equitably distributed so Black-owned businesses could secure funding to stay operational during the pandemic.
Twitter said the new initiative was inspired by similar efforts that have come from other prominent corporations. Smith championed greater private-sector involvement in racial equity, calling on corporations to spend 2% of their annual net income for the next decade to empower minority communities. The commitment would not only invest in the future of our workforce and economy, but would be an acknowledgement that powerful institutions in this country were built by excluding marginalized communities from taking part and enjoying their benefits.
Read more about Twitter’s commitment to racial equity.