SAN FRANCISCO–Square, the cash payments app that also runs the Square Capital lending program, has announced plans to invest approximately $100-million in an array of funds and with lenders focused on underserved communities of color.
According to the company, it plans to invest about 3% of its cash, $100 million, in four ways:
- $25 million in deposits at Community Development Financial Institutions and Minority Depository Financial Institutions. The goal is to bolster their ability to lend in underserved
- $25 million in The Keepers Fund, a vehicle sponsored by the National Bankers’ Association meant to invest in MDIs
- $25 million in the Black Economic Development Fund, which was created by the Local Initiatives Support Corporation to support Black-led banks and businesses
- $25 million will be reserved for future programs
Maurice Jones, CEO of the Local Initiatives Support Fund, told the New York Times these types of investments “fuel economic justice and opportunity in underserved communities and support a broadly shared prosperity throughout the country.”
According to the Times, the initiative grew from a $5 million move last year when Square deposited the money with CDFIs in 2019.
‘Not Just Good for the World’
Jack Dorsey, founder of Square, who has expressed public support for the Black Lives Matter movement, has personally pledged $1 billion to relief programs tied to the pandemic. And the company’s Square Capital division distributed more than $870 million in small-business loans through the federal government’s Paycheck Protection program, the Times noted.
A plan to drastically boost funds for Black communities took shape this summer, according to the Times. Though Square had intended to expand its efforts since early in the year, the plan took on new urgency as executives saw data on how badly Black communities were hurt by the pandemic.
“Part of the reason that Square exists is for this very purpose,” a company representative said. “It’s not just doing good in the world, it’s good business, too.”