Streaming giant Netflix says it wants to help address the nation's racial inequalities, but as Victor Luckerson at Wired Magazine asks in our Sunday Long Read, why should anyone bother to take any tech company seriously on issues of race and especially Black America?
IN THE SPRING of 2020, folks in New Orleans’ Lower Ninth Ward started flocking to the Sankofa food pantry on Dauphine Street however they could—by car, on bicycles, rolling pushcarts on foot. The lines were brisk but constant as the cascading effects of the coronavirus pandemic swept through the neighborhood of pastel-colored houses. Some people had lost jobs. Others were caring for loved ones sick with the virus, or picking up food for people under quarantine. For Rashida Ferdinand, the director of the nonprofit that operates the pantry, the crush of demand posed a series of dilemmas—beginning with the fact that she could no longer allow people inside the building. But one thing was sure: Shutting down the pantry was out of the question. No matter what, Ferdinand says, “we knew we needed to stay open.”
After circulating undetected through the city during much of Mardi Gras, the coronavirus had overwhelmed New Orleans with unprecedented speed, and it was killing more people per capita there than nearly anywhere else in the United States. Under lockdown, almost 100,000 people in the Crescent City had been thrown out of work as businesses were forced to shutter and tourism ground to a halt. In the Lower Ninth Ward, where a third of residents work in either food service, lodging, or retail, and where household incomes are half the parish average, the need for aid was especially acute. In so-called good times, about 350 people relied on Sankofa’s services. Now Ferdinand’s organization was furnishing more than 800 people a month with milk, eggs, canned beans, and other staples.
To meet the need, Sankofa stretched itself. The pantry went from being open two days a week to four. It began delivering food to people who could not collect it in person. When some of Ferdinand’s employees started working from home for fear of contracting the virus, she started handing out food herself. With sheets of plexiglass purchased from Ace Hardware, she improvised a Covid-safe storefront on Sankofa’s patio deck. Inside, nearly a dozen red and black metal shelves took over most of the headquarters’ open floor plan. “Our whole front office became the pantry,” she says.
But then the next dilemma reared up: Sankofa was running out of money. The nonprofit employed about a dozen people and was racking up expenses faster than usual, while sources of grant funding were drying up in the financial uncertainty of the pandemic.
Relief seemed to be on the way from the federal government. In late March, Congress authorized $349 billion in forgivable loans to help small businesses and nonprofits maintain their payroll amid the shutdown. To access the funds, business owners had to go through financial institutions. So Ferdinand immediately called Capital One, where Sankofa had banked for 10 years and maintained a typical account balance of around $300,000. But a representative told her the bank could not process her loan application. “I don’t know what was going on with Capital One, but we were disregarded,” Ferdinand says. “There wasn’t a person set up to actually move this needle forward and work with small business owners.”
So Ferdinand began researching other lenders that might be able to help her. She ultimately turned to Hope Credit Union, a Black-operated financial institution based in Jackson, Mississippi, which took on her loan application right away.
Now in its 26th year of operation, Hope’s mission is to serve low-income communities and people of color left behind by the traditional banking system. The organization has weathered disasters in the Deep South before, from Hurricane Katrina to the Great Recession. In fact, Hope tends to gain customers during such events, which lay bare the ways in which the US economy devalues Black life and Black ambition. “I think crises have catapulted our growth,” says Bill Bynum, Hope’s CEO. “Unfortunately, very few organizations are providing financial services to those who have the greatest need.”
As the pandemic continued to unfold, Hope also got an infusion of capital from an unlikely source: Silicon Valley. In June 2020, following the murder of George Floyd by Minneapolis police, Netflix announced that it would place a $10 million deposit at Hope, the largest sum the credit union had ever received from a single customer.
Floyd’s killing sparked widespread protests in the streets and calls for racial justice in Fortune 500 boardrooms. But while corporate America’s official responses often felt like crisis PR disguised as philanthropy, Netflix’s approach stood out. The company’s deposit at Hope was just one small part of a plan drawn up by a mid-level HR executive who had been researching Black-operated banks in his spare time. Following his advice, the company pledged to invest 2 percent of its cash holdings in financial institutions and organizations that directly support Black communities—a proportion of the company’s wealth that, at the time of the announcement, amounted to about $100 million. As Netflix’s fortunes rose, the theory went, so too would those of Black businesses and nonprofits like Ferdinand’s.
Netflix’s announcement also included a call to action. The streaming giant challenged other firms to follow its lead and dedicate some share of their cash to Black economic initiatives. “This is not charity,” says Aaron Mitchell, the human resources director at Netflix who spent months devising the Black banks proposal. “This is not one time.”
Whether Netflix’s move is sufficient is a different kind of question. This summer a handful of tech companies—Amazon, Apple, Facebook, Google, Microsoft, Netflix, and Tesla—reached a collective valuation of $9.6 trillion, about a quarter of the entire S&P 500. Meanwhile, Black communities have weathered decades of disinvestment, struggling in a segregated economy that has persisted long since the eradication of Jim Crow, and the nation’s wealth is more unevenly distributed today than at any time since before the Great Depression. Hope, with Netflix’s help, aims to reverse that flow of inequality. “We’re looking to basically import deposits, import capital, into these wealth-starved communities,” Bynum says. But will Netflix keep faith with those communities?
Ten million isn't nothing, but it sure buys a lot of good will and a lot of free press, and not much else. We'll see if Netflix and the rest of the techbros can follow through, but I frankly don't see it happening for much longer, particularly once the federal government starts asking very uncomfortable questions about their revenue streams, digital monopolies, and other things with intent to maybe break up some trillion-dollar corporate monsters.
We'll see.
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