Twitter announced Thursday that it will invest $100 million in the Finance Justice Fund it is establishing with the Opportunity Finance Network in an effort “to combat racial injustice and persistent poverty.”
“Twitter is investing $100 million in the Finance Justice Fund by @OppFinance to combat racial injustice and persistent poverty,” the social media giant tweeted. “Proceeds will fund financial literacy from @OperationHOPE. Our goal is to establish a model that can be replicated by others.”
“Twitter is proud to partner with OFN and Operation HOPE to bring more support to Black, Latinx, Indigenous, and rural borrowers,” said Ned Segal, Twitter’s chief financial officer. “By allocating a portion of our cash to the new Finance Justice Fund, Twitter will provide access to capital through loans to invest in underserved communities.”
Twitter is investing $100 million in the Finance Justice Fund by @OppFinance to combat racial injustice and persistent poverty. Proceeds will fund financial literacy from @OperationHOPE. Our goal is to establish a model that can be replicated by others:https://t.co/CZTsNCeuNE
— Twitter Comms (@TwitterComms) November 12, 2020
The investment, a $1 million grant and subsequent “ongoing contributions,” amounts to about 1% of Twitter’s cash on hand, according to Macrotrends.
The new fund “aims to bring $1 billion in capital from corporate and philanthropic partners to the most underserved individuals and communities in America,” according to a press release from OFN. The fund will offer below-market-rate loans through a national network of community development financial institutions.
“The Finance Justice Fund will help to address long-standing issues of disinvestment, the racial wealth gap, and persistent poverty in our country,” said Lisa Mensah, the president and CEO of OFN. “I commend Twitter for stepping up as the first corporate investor, for investing substantial capital, and for making a large grant to a fund that will deliver loans through CDFIs to underserved people and places across the country. I invite more corporate and philanthropic partners to invest in this unique opportunity to advance justice.”
CDFIs use funds to invest in businesses that banks won’t service, often in underserved communities. More than 80% of CDFI customers are low-income earners, and about 60% are people of color. Rural populations make up 26% of CDFI customers. There are more than 1,000 CDFIs across the country managing more than $222 billion.
Twitter said that the interest it earns from the investment will be used to support another initiative, Operation HOPE. That organization provides financial literacy support and promotes economic inclusion for underserved communities. Twitter will use its returns to invest in five Operation HOPE centers that provide financial coaching to predominantly black banks and financial institutions that support minorities and other underserved communities.
“Interest income from Twitter’s investment in the Finance Justice Fund will then be used to support Operation HOPE’s financial coaching initiatives,” Segal said. “This is renewable, durable corporate philanthropy that creates a blueprint for other companies to join us in this critical work.”
Applications for the new fund will be accepted from qualifying CDFIs starting in December.
