WASHINGTON (Axios): ServiceNow will create a $100 million racial equity fund that aims to promote more lending within Black communities.
Why it matters: It’s the latest move by corporate America to dedicate resources to fighting systemic racism and inequality.
How it works: The fund will buy loans (home, small business and other types made in some Black communities) off banks’ balance sheets — freeing up them up to lend more within the community.
ServiceNow is partnering with RBC‘s asset management arm, which will manage the fund.
RBC will identify home, small business and community project loans made in Black communities across 10 regions, including Chicago and Washington, D.C.
If the loans meet the criteria, they will be purchased as securities for ServiceNow’s portfolio.
The fund will be available for investment next month, and fully invested this year, the company says.
Any returns generated by the fund will be reinvested.
Between the lines: The company says it wants to help fight inequitable access to capital that systemic racism breeds — a goal not possible with a one-time donation to an organization or nonprofit, ServiceNow CFO Gina Mastantuono said.
The big picture: Last year’s uprising over racism in America — sparked by the police killings of George Floyd, Breonna Taylor and others — pushed corporate America to come to terms with its role in perpetuating systemic racism and how their cash loads could help fight it.
The country’s biggest companies have pledged billions of dollars to racism and inequality efforts.