The 2% Cash Commitment To Black Banks Playbook: How Aaron Mitchell From Netflix Started A Movement To Close The Racial Wealth Gap

Photo by Dima Solomin on Unsplash

In June 2020, Netflix announced a plan to allocate 2% of the company’s cash holdings - initially up to $100 million - into Black banks and similar financial institutions that build economic opportunity for Black communities in the US. That announcement elicited a lot of enthusiasm, and also some questions from many organizations hoping to take similar action. 

I caught up with Aaron Mitchell, the mastermind and driving force of this effort at Netflix and Bill Bynum, the CEO at Hope Credit Union, one of the first partners of Netflix in this endeavor to find out more about how the idea has created a powerful ripple effect two years later - and discuss the creation of a Playbook to show more companies can join the 2% Cash Commitment movement to support Black communities.

It started on April 16th at a networking dinner Aaron Mitchell organized and was facilitating in his role in HR, completely unconnected to anything financial or social impact oriented. These dinners were about bringing together disconnected groups of people with the hope that by doing so, they would forge bonds that would eventually allow them to make more inclusive organizations.   

Aaron Mitchell, former Netflix employee and Founder of Pega Visao Salvador Club, a Web3 company celebrating the diasporic African culture of Salvador, Brazil

Mitchell had worked with Ebbie Parsons, the Managing Partner of Yardstick Management, to organize the dinners and as the discussion turned toward the devastating impact the pandemic was wrecking on black and brown communities, Parsons asked “how do we get corporations to put money into black banks” in direct response to watching PPP funding get misused.  

“At this point, I didn't know much about black banking or the real drivers of the racial wealth gap in America, but a friend recommended that I read The Color of Money by Mehrsa Baradaran. In it, Baradaran provides the missing historical context and asserts in her opening paragraph that ‘Underneath it all is a deep and growing financial fault line between black and white. Though hard to detect, it is nonetheless the defining feature of America’s racial divide because it is intimately linked to so many other problems.’ She laid out a lot of compelling recommendations so I mostly just did what she said in the book,” Mitchell explained.  

We discussed initial setbacks that Mitchell faced in convincing the company leadership and what helped him to overcome them.

“Prior to the murder of George Floyd, the early days of working from home was occupying most people’s minds and so while interesting, many folks weren’t responding to the initiative with a sense of urgency. Even though Spence Neumann, Netfliix’s CFO, was very enthusiastic about the idea when I first mentioned it to him in early May, I found that it wasn't a priority for most others because on one hand, the black banking sector was not well known and on the other, people were overwhelmed with the sudden life changes and everything that came along with it, “ he recollected.

Even once he started to get internal buy-in as more and more folks educated themselves, he found that the Black banks weren’t capable of accepting more than a few million dollars in deposits. They needed equity and Netflix wasn’t looking to take an equity stake in a bank, which created some additional apprehension.  

For the most part, he overcame these obstacles by calling on experts in his network for personal guidance or to educate his leaders. People like Mehrsa Baradaran, Ray McGuire and Harold Butler among many others jumped on calls with different executives to answer questions and provide insight he couldn’t. “I could write an entire article about the cast of very important people that made this initiative possible because it was necessary to activate a village to make this thing happen,” he added.

I asked about an example of a financial institution that had been helped and what the reality was two years later.

“I love talking about HOPE Credit Union and the work that Bill Bynum has been leading for the last 4 decades. Because of HOPE’s long commitment to developing communities of color in the deep south, they were one of the first institutions Netflix selected and announced,” Mitchell exclaimed.    

Not only was HOPE able to secure almost $100m from other corporate partners in their Transformational Deposits program in the nine months following Netflix’ initial $10m deposit (which at that point was the largest deposit from corporate America), but they have since gone on to secure a $92m grant from the US Treasury Department that will allow them to increase their deposits by another $1bn.  

This matters because HOPE has been a persistent supporter of capital starved communities, and the work they have done since receiving more deposits from corporate America shows that so many more of these communities would flourish if they had access to capital -  and the guidance and support of a bank that understands it’s particular challenges with products and expertise that allow for communities to break cycles of capital extraction and disinvestment.  

“While HOPE makes it a point to do it’s own reporting on impact, they have also continued to garner a steady beat of press discussing their investments in the deep south and the impact on the people and prosperity of these otherwise neglected communities and they continue to look for ways to hack the system, all from Jackson, MI, “ Mitchell continued.  

I asked Bill Bynum, CEO at HOPE how he would describe the impact of the initial Netflix commitment in terms of the capital it has been able to unlock.

Bill Bynum, CEO at HOPE

“The Netflix commitment of $10 million was nothing short of transformational. First and foremost, it seeded significant impact in underserved communities. At the time of the commitment, HOPE agreed to use the investment to support 2,500 entrepreneurs, homeowners and individuals of color over a 24 month period. We exceeded the goal, supporting 7,334 entrepreneurs, homeowners and individuals of color,” said Mr Bynum.

He continued, “Secondly, Netflix truly approached the investment as a partnership. The company leveraged its communications expertise to roll out a highly effective media relations strategy around the announcement. The coverage markedly raised the profile of HOPE as a Black and women owned financial institution with which other corporations could trust and partner. Netflix also launched a short series, Banking on Us, which profiled several HOPE members and shined a light on the magnitude of the racial wealth gap.”

Last, but not least, the Netflix commitment unlocked a new source of capital through HOPE’s Transformational Deposit program, which expands access to capital for Black and underserved businesses, homeowners, households and communities. “The Netflix investment represented our first corporate Transformational Deposit, after which the program really took off. Since then, HOPE has opened 610 Transformational Deposits for $134 million. This capitalization strategy is a cornerstone of our ten year growth plan which includes a commitment to invest $1 billion in the Deep South,” Bynum added.

When discussing what advice they would have for the corporate leaders like themselves who want to encourage their companies to make similar commitments or take similar approaches, Mitchell explained, “I think the first thing is to keep it simple. Part of the reason I believe the initiative at Netflix was successful was because it was very easy to think about moving a small portion of our cash from one place to another and working with partners who had the reputation and track record necessary to encourage trust.”

Banking On US Series | Netflix

In addition to publishing the Playbook, Mitchell also encouraged corporate leaders to continue building their networks within and outside of their companies. Having people to call on for advice and to take action at different stages of this effort was critical.  It is important to start building the network today regardless of what you might want to do later.  

“The sheer randomness of the collection of people I have cultivated relationships with over time allowed me to navigate the complexity of this multilayered initiative and at the very least, leverage a number of relationships for introductions that made a significant difference,” Mitchell added.  

“People of color in the United States now represent the emerging majority. As a result, a corporation’s customers and workforce will increasingly be people of color. Investing in racial equity not only represents the right thing to do, it is good for the bottom line and a proven growth strategy for returning value to corporate stakeholders,” Bynum replied.

“To help close the wealth gap, we need more companies to join this movement. If your company is interested in how it all works, you can check out what we’ve learned using this Playbook or reach out to us. Together, we can contribute to more healing and progress for Black communities,” Mitchell concluded.

When I asked Aaron Mitchell what was next for him in the future, he replied “I am in the process of launching a digital art NFT collection as part of a culture defining Web3 business I am building.  As a musician and having just spent the last few years working at one of the most global and influential entertainment companies in the world, it became clear that Black people are culture defining, but we often don’t reap the benefits or monetization of the culture we’ve created.  Web3 has the power to change that and the Pega Visão Salvador Club will lead the way in both bringing the rich afro diasporic culture of Salvador, Brazil to the world in new ways, starting with digital art NFTs, but we are exploring all forms of media, including animation, music as well as tourism and consumer products.” All this while pulling the artistic and business communities of Salvador into the global economy through the decentralizing power of Web3. It’s a sequel to the black banking initiative and allows him to reconcile all these different experiences into a business that has purpose hardwired into the operating system.