From Silicon Valley to Wall Street, companies proclaimed “Black lives matter.” JPMorgan Chase CEO Jamie Dimon adopted the posture of former NFL quarterback Colin Kaepernick’s protests against police brutality and took a knee with bank employees. McDonald’s declared Floyd and other slain Black Americans “one of us.”
Now, more than a year after America’s leading businesses assured employees and consumers they would rise to the moment, a Washington Post analysis of unprecedented corporate commitments toward racial justice causes reveals the limits of their power to remedy structural problems.
Apple and AbbVie, Facebook and Pfizer, Johnson & Johnson and Procter & Gamble, and other top corporations made broad claims about what they would do, pledging to be a force for societal change and to fight racism and injustice, including violence against Black Americans.
Where and how they dedicated their money became the most visible signs of their priorities.
To date, America’s 50 biggest public companies and their foundations collectively committed at least $49.5 billion since Floyd’s murder last May to addressing racial inequality — an amount that appears unequaled in sheer scale.
Looking deeper, more than 90 percent of that amount — $45.2 billion — is allocated as loans or investments they could stand to profit from, more than half in the form of mortgages. Two banks — JPMorgan Chase and Bank of America — accounted for nearly all of those commitments.
Meanwhile, $4.2 billion of the total pledged is in the form of outright grants. Of that, companies reported just a tiny fraction — about $70 million — went to organizations focused specifically on criminal justice reform, the cause that sent millions into the streets protesting Floyd’s murder by a Minneapolis police officer.
The $4.2 billion in grants, to be disbursed over as long as a decade in some cases, represents less than 1 percent of the $525.6 billion in net income earned by the 50 companies in the most recent year, according to data from S&P Global Market Intelligence.
“Corporations are not set up to wield their power for the greater good as much as we give them credit for, a lot of times,” said Phillip Atiba Goff, a professor at Yale University who co-founded the Center for Policing Equity. “They are constrained by things they feel they need to do to manage their brand in a world where Black liberation does not have consensus.”
It will be difficult to assess whether corporations deliver measurable results. There is no single entity tracking the corporate promises. Nor are corporations required to report on where all of their money is going or its impact.
“Because these are pledges, there isn’t any one entity that will be holding these organizations accountable,” said Una Osili, an associate dean at Indiana University who leads the research and publication of Giving USA, the annual report of American philanthropy. While Osili is hopeful about the corporate efforts, she added: “I wonder about the follow-through — whether the will will be there in three to four years to continue to lift up these issues.”
The Post analyzed data provided by 44 of the 50 most valuable companies, along with public statements and company reports, to track pledges made after May 2020 to charitable organizations as well as loans and investments.
So far, 37 companies have confirmed disbursing at least $1.7 billion of the $49.5 billion pledged. Seven of the companies that provided data on their racial justice commitments refused to outline how much they had already spent.
The analysis shows that public companies are devoting the most resources to promoting upward economic mobility for Black people, through increased opportunities for homeownership, entrepreneurship and education.
Among the investments aimed at narrowing the racial wealth gap is the $28 billion in housing and business loans in Black and Latino communities that JPMorgan Chase has pledged, with the goal of moving 40,000 families into homeownership over the next five years. PayPal is investing $500 million in Black and Latino financial institutions and venture capital funds. Google is donating $50 million to historically Black colleges and universities to increase Black representation in the tech sector.
“Education is a fairly noncontroversial, conservative impulse in terms of corporate donations,” said Robert E. Weems Jr., a professor of business history at Wichita State University, “when in fact George Floyd as a catalyst specifically had to do with criminal justice and policing.”
In the new commitments to racial justice since Floyd’s death, the companies are expanding beyond traditional philanthropy, incorporating racial justice initiatives in their regular course of business. In addition to the external financial commitments analyzed by The Post, the companies said they are diversifying their workforces up to the highest-paid C-suite jobs as well as increasing their purchases of goods and services from Black-owned businesses.
Profit-driven corporations will not propel transformational change with money alone, experts say. That will require corporate and government policy changes aimed at addressing the historic destruction of Black wealth, said Mehrsa Baradaran, a law professor at the University of California at Irvine whose research focuses on financial inclusion and the racial wealth gap.
“The answer to these massive problems is not in capitalism doing better or more. It’s not going to come from philanthropy. It’s not going to come from promises. It’s got to be a policy change,” said Baradaran, who has informally advised companies on impact investing.
“We don’t want just benevolent billionaires and nicer, softer, more-woke monopolies. We want an economic structure that allows for more mobility, and we don’t have that.”
At a new Chase branch in south Minneapolis, home lending advisers have begun scanning for-sale listings in Black and Latino neighborhoods, looking for properties where they could erect yard signs advertising $5,000 home buyer grants.
The grants, created to defray down payment and closing costs, are central to JPMorgan Chase’s $8 billion nationwide effort to boost Black homeownership by tens of thousands of families over the next five years in hopes of increasing generational wealth.
But the initiative by the United States’ largest bank would make only a tiny dent in a systemic problem fueled by the industry’s long history of lending discrimination. Some economists and civil rights advocates warn that it could even widen racial disparities because it explicitly targets place — not race.
Banks are allowed under federal civil rights law to create what’s known as Special Purpose Credit Programs to increase lending to Black consumers and other disadvantaged groups if their normal lending practices result in racial disparities.
But banks tend to craft such credit assistance programs very conservatively to avoid legal challenges — to the point where the intended beneficiaries may not always benefit the most, said Lisa Rice, president and chief executive of the National Fair Housing Alliance who serves on JPMorgan Chase’s consumer advisory council.
JPMorgan Chase’s home buyer grants are available to anyone who qualifies for a loan to buy a home in Black and Latino neighborhoods regardless of race, allowing White borrowers with more wealth than Black borrowers to access the same financial benefits. Civil rights experts say that could have the unintended effect of further increasing gentrification and displacement.
JPMorgan Chase officials say matching financial incentives to census tracts that are predominantly Black or Latino — even if beneficiaries may be White — is the closest the bank could legally get to targeting race.
“The banks are being very judicious because they don’t want to be accused of reverse discrimination,” said Rice, who is pushing federal regulators to issue better guidance outlining how lenders can legally use race in special credit programs to boost Black homeownership. “I’ve had long conversations with JPMorgan Chase. They would like to do more. They need the regulatory framework in order to do that, and we are working to make that happen.”
The Consumer Financial Protection Bureau issued an advisory in December clarifying that banks could craft credit programs designed to specifically benefit Black consumers and encouraging lenders to do so given existing racial disparities in the credit market.
JPMorgan Chase’s racial equity commitment includes $8 billion for 40,000 new mortgages and $4 billion for 20,000 refinances over the next five years. The $12 billion combined would represent a 28 percent increase over the bank’s home lending to Black and Latino borrowers from 2019, when $8.7 billion of the nearly $85 billion in home loans it originated went to Black and Latino borrowers, according to JPMorgan Chase.
(The bank is also allotting $14 billion in financing for affordable rental housing, $2 billion in small-business loans and more than $1 billion for philanthropy.)
Bank of America, meanwhile, has pledged an additional $15 billion toward expanding homeownership to at least 60,000 low- and moderate-income families over the next five years. Borrowers will be eligible for below-market fixed interest rate mortgages with no down payments or closing costs and grants of up to $17,500. Neither the race of the borrower nor the neighborhood is taken into account — only the income levels for the person and area, but the bank expects Black borrowers to benefit substantially because many low- and moderate-income neighborhoods are also predominantly Black.
Wells Fargo, which represents nearly 5 percent of the market share, had made a $60 billion lending commitment in 2017 to increase the number of Black homeowners by at least 250,000 over 10 years. So far, the bank says it has made $18.6 billion in mortgages to 72,758 Black borrowers.