Moving money to Black-owned or Black-led financial institutions is officially a Fortune 500 trend. Biogen, the Boston-based biotech company working on a treatment for Alzheimer’s disease, is depositing $10 million of its capital into OneUnited, a national Black-owned bank, the company said Thursday morning.
It’s the latest in a string of recent moves by large corporations to shift some of their money to Black-owned banks and lenders primarily serving the Black community in the months of unrest over racial injustice following the killing of George Floyd in May.
In late June, Netflix announced it would deposit $100 million—2% of its total cash—to Black-led banks and financial institutions and called on others to “do the same.”
That may have jump-started other efforts by large companies to follow suit: Last week, Costco announced it would put $25 million into a fund that Netflix seeded, the Black Economic Development Fund. Created by the Local Initiatives Support Corporation (LISC), a Black-led community development financial institution, the fund will allocate the money towards deposits to Black-owned banks, credit unions and other financiers supporting businesses run by people of color and minorities. In addition to deposits, some of the fund may be used for bridge loans to those financial institutions as well, Maurice Jones, LISC’s CEO and president, told Fortune.
Biogen’s decision differs in that it has selected an individual institution, OneUnited Bank, to which to directly make a deposit. While it has only chosen to move $10 million to OneUnited so far, Biogen is also planning to make further deposits to other Black-owned banks in the future, and is currently “identifying those options,” a spokesperson told Fortune. “We want to support minority-owned banks in the U.S. communities where we have operations,” the spokesperson added.
OneUnited, which currently has about $685 million in assets—making it one of the largest Black-led and Black-owned banks in the U.S.—has attracted tens of millions in additional deposits this summer, as calls for greater support of Black communities have increased amid protests over racism and police violence. In announcing Biogen’s deposit, Kevin Cohee, OneUnited’s CEO, highlighted the “#BankBlack movement” as one way “to send a message that is part protest, part progress.”
“For OneUnited’s customers, this deposit could mean allowing them to pursue their dreams or strengthening underrepresented minority businesses,” Chirfi Guindo, Biogen’s executive vice president of global product strategy & commercialization, added in a statement.
Meanwhile PayPal, which in early June pledged $500 million to broadly support Black-owned businesses, has since decided to direct the bulk of that money to banks focused on the Black community, a company spokesperson told Fortune. More than half of the money—or as much as $300 million or $400 million—will come from PayPal’s deposits which are currently held in traditional banks, and move to “banks that are either Black-owned or are community banks and credit unions that serve underrepresented minority communities,” according to the spokesperson.
Last week, PayPal picked the first such bank to get a portion of the cash: Optus Bank, a Black-owned bank based in South Carolina, received a $50 million deposit from PayPal. While Optus is smaller thank OneUnited, the deposit from PayPal and others has helped its assets swell 67% during the coronavirus pandemic, to $150 million today.
These actions by corporations are not philanthropy; rather than donating the money, moving deposits allows companies to support Black-owned institutions—and by extension, the people and businesses they serve—without putting their cash at risk. That likely makes it easier for companies to put larger sums of money towards the cause: “When you make a deposit, it’s still your money,” added Jones. In other words, companies can still expect to receive their money back in full—while supporting Black communities in the meantime.