Twitter plans to announce on Thursday that is investing $100 million in Community Development Financial Institutions in a new initiative aimed at combating “racial injustice and persistent poverty,” the DealBook newsletter reports.
The commitment is worth around 1 percent of Twitter’s cash pile, and will be used for loans provided by the Opportunity Finance Network’s band of C.D.F.I.s across the United States. These institutions take government money, donations and other funds to seed businesses that banks won’t deal with in underserved communities. More than 80 percent of customers in the network have low incomes, and around 60 percent are people of color.
Twitter’s move follows similar corporate initiatives, including from Netflix (deposits in Black-owned banks), PayPal (investments in Black- and Latino-led venture funds) and Square (C.D.F.I.s), with the latter company also run by Twitter’s chief executive, Jack Dorsey. Twitter’s finance chief, Ned Segal, said it was inspired by those companies, and held conversations with nonprofit groups and financial institutions about how “to bring our balance sheet to benefit these communities,” he said. Twitter wants to establish a model that can be replicated by other companies, so that the Opportunity Finance Network can scale up if other corporate investors come on board.
Twitter will reinvest the interest it earns from loans, which it says will be offered at below-market rates, into Operation Hope, a nonprofit organization aimed at improving financial literacy and economic inclusion.
The social media company has been criticized for the spread of disinformation on its platform, which it has been trying to contain. Mr. Segal said the announcement on Thursday fit with the company’s broader mission of “serving the public conversation,” alongside its policies on what appears on its platform. “We hope that each thing stands on its own,” he said.
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