Friday, March 19, 2021

Corporations Become Unlikely Financiers of Racial Equity

Corporate giving has exploded since the racial reckoning in summer 2020 brought on by the police killings of George Floyd and Breonna Taylor.  Corporation donations have far outpaced donations from foundations and individual philanthropists since the summer of Black Lives Matter protests, per the philanthropy research organization Candid.  "Companies donated or pledged about $8.2 billion of the $12 billion in total contributions earmarked for racial equity--the 'first time direct corporate giving to racial equity cases has reached this magnitude'--said Andrew Grabois, Candid's corporate philanthropy manager."

Some of the most significant corporate commitments have come from JPMorgan Chase, Microsoft, AMEX, Bank of America, PayPal, Salesforce and Chase.  These large corporate commitments do not account for the other minority-focused investments, such as JP Morgan's initiative to lend more openly to minority owned businesses and black and brown home purchasers.  The corporate giving trend is fueled by changing expectations of younger employees and progressive consumers that expect corporations to become serious about corporate responsibilities to social issues and causes.  Advocates argue that these corporate commitments will not be enough to achieve racial equity in housing, employment and policing, but acknowledge that if these corporations are serious about their commitments, that it can mark an important start.  "'The world is changing, and the expectations of how companies engage are changing,' said Brandee McHale, Citi’s head of community investing and development."

ABC News reports that "[s]ince late May, Grabois said, financial commitments by companies to racial equity causes have grown 'exponentially larger' than any other cause other than COVID-19. A report by McKinsey & Company, which tracked corporate responses from May to October, found that of the top 1,000 U.S. companies, 18% made internal commitments, like diversifying their hiring, and 22% pledged to promote racial equity through donations or other means."

Whether corporate giving to racial equity causes results in systemic change and reform remains to be seen.  Holding corporations to their commitments will likely be an important undertaking.

photo courtesy of wikimedia commons

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