What corporate philanthropy got wrong after George Floyd’s murder | MIT Sloan (2022)

In the wake of George Floyd’s murder by a Minneapolis police officer in 2020, many corporations made pledges intended to advance racial justice. For example, Google committed to donating $50 million to historically Black colleges and universities, while JPMorgan Chase allocated $30 billion in housing and business loans, and other supports, to Black and Latino communities. But were those pledges genuine? Were they performative? Or were they genuine, but poorly managed?

According to a recent report by The Washington Post, America’s 50 biggest public companies and their foundations committed at least $49.5 billion to address racial inequality. But more than 90% of that amount was allocated to potentially profitable loans and investments, including mortgages. Just $4.2 billion was pledged as grants, and only $70 million went to organizations devoted to criminal justice reform.

An MIT Sloan Inclusive Innovation Economy talk last month examined the reasons for this discrepancy.a former Berkshire Bank executive vice president and current MIT Sloan lecturer who focuses on inclusion in the innovation economy, led the discussion. She was joined by:

Social entrepreneur Jessica Norwood, who founded Runway, which focuses on building Black community wealth through a lending process Norwood calls “friends-and-family”-style funding. Runway doesn’t rely on traditional bank requirements like credit score, focusing instead on business models and financial projections.

(Video) MIT Sloan Experts Series – Malia Lazu: Corporate America in Advancing Social Justice & Racial Equity

Taj James from Full Spectrum Capital, who focuses on creating nontraditional pathways for wealth-building and community ownership.

Makeeba McCreary, president of the New Commonwealth Racial Equity and Social Justice Fund, which makes grants to organizations that support Black and brown communities through initiatives designed to reduce systemic racism, such as policing and criminal justice reform.

Here’s where corporate America went wrong, the panelists said, and how it could do better.

Be strategic, not reactive

In the aftermath of Floyd’s murder, corporations did the right thing for the wrong reasons.

“There are many problems with pledges, first being that it was a reaction to a horrific event and not actually a response to systemic racism,” Lazu said.

The panelists worried that the pledges didn’t reflect a long-term, thoughtful commitment to combating racism. Companies shouldn’t deploy resources to mitigate reputational risk under the guise of benevolence. Systemic change doesn’t happen through a frenzy of charity. It requires forethought and planning.

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Don’t disburse money as a means to reaffirm power

“Companies are not the best entities to deploy money that can lead to sustainable impact. Most corporations’ social partners are large, white-led organizations that have been leading charity work for decades and do not represent the people who this money was supposed to go to,” Lazu said.

Norwood cited a “huge level of chaos and an inability for structures and people who have learned and grown up in those structures to actually do the kind of systemic change work that was required” after Floyd was killed. Traditional power-brokers dictated philanthropy and, thus, continued to hold power.

In the wrong hands, money is a form of control. For example, mortgages extended to Black and brown borrowers are helpful to a degree, but they also come with strings attached, such as interest and red tape that tie borrowers to such lenders in the long term.

On the other hand, The New Commonwealth Racial Equity and Social Justice Fund focuses on trust-based grantmaking. The non-profit grants only to groups that address systemic racism through four pillars: policing and criminal justice reform; health equity; economic empowerment; and youth education, empowerment, and civic engagement that focus on Black and brown communities.

And the fund focuses less on written applications and more on personal relationships through interviews — with the goal of getting organizations on their feet and then getting out, McCreary said.

Make reparations, not reputations, a central tenet of lending

Were some executives simply trying to assuage their guilt by throwing money at the problem? James, of Full Spectrum Capital, seemed to think so. He noted that Floyd’s murder pushed many corporate executives toward a feeling of discomfort — and that, by pledging money, they could return to a feeling of comfort and “push that feeling of discomfort as far away as possible.”

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He described a recent meeting where a corporate leader described his pledge: “Basically, they were fulfilling the commitment they made to communities by making their company less racist — slightly less racist than it was before — and deploying products and financial services that the company should have been providing all along. That doesn’t count. You can’t spend all of your pledge making your own company slightly less racist,” he said.

Loans to buy a house or to start a business can only go so far when recipients don’t have assets in the first place, James said. This is due to longtime lack of access to means of wealth-building, such as mortgages.

“Of all the different kinds of resources we could deploy, the most important thing to do is to return assets, to shift assets, reparations, and land back to the communities from which assets have been extracted,” he said.

He pointed to the Good Life Pledge as a way to start. With this philanthropic commitment, a donor pledges to transfer one-third of their assets toward community stewardship in the form of equity grants and recoverable loans, building critical infrastructure in marginalized communities.

Recognize that equitable lending isn’t always a money-making venture

A 2020 report from the Federal Reserve Bank of New York found that 41% of Black businesses closed in the early months of the COVID-19 pandemic. But the true toll is higher. Accounting for smaller firms not captured in the report, and using local-level data, Norwood estimates that 60% of Black businesses closed. Many struggled to get help due to a lack of preexisting banking relationships. In Massachusetts, most Paycheck Protection Program loans went to businesses owned by white men.

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Instead, Runway offered universal basic income payments to their clients. They paid $1,000 per month for six months, used at a business’ discretion. All of their businesses remained open.

“If you want to close the racial wealth gap, your capital must be reparative because you are repairing a racial injustice. You can’t get market rate returns when you are doing the repair work. You have to put out reparative capital,” Norwood said.

Banks that provide reparative capital understand that businesses don’t have assets because of systemic racism. Instead of asking for collateral, these banks focus on closing the racial wealth gap by investing in businesses’ success for the long term. This means upending the traditional power balance of powerful white lenders and needy Black borrowers.

“It can’t just be that the infrastructure is held over here and then other people of color don’t have any infrastructure but are always the consumers or customers of the thing, never the owners of the thing. We have to start looking at large-scale equity relationships as well,” Norwood said.

“Part of what we were able to do, in that moment, was to talk to our bank partners, to talk to our investors, to talk to everybody about: ‘We are here in the thick of it, and this is what it means to be in the right relationship. This is how you show up.’”

For more info Zach Church Editorial & Digital Media Director (617) 324-0804 zchurch@mit.edu

(Video) PBS NewsHour full episode, May 25, 2021

Some social media posts have responded to Floyd's death by pushing misinformation and conspiracy theories.

Cities across the country erupted in protests and riots after George Floyd, a black man, died after a white police officer kneeled on his neck during an arrest in Minneapolis on May 25.. The incident was captured on cellphone video that showed Floyd repeatedly saying, “I can’t breathe.” The four involved officers were fired the following day, and Derek Chauvin, the officer who kept his knee on Floyd’s neck, was charged on May 29 with third-degree murder and second-degree manslaughter.. Some social media posts have responded to this unfolding story, though, by pushing misinformation and conspiracy theories.. Neither picture actually showed Chauvin.. Lengthy text posts claimed that Floyd’s arrest and death in Minneapolis were “staged” to incite “racial tensions.” But they offer no evidence to support that conspiracy theory.. A website whose domain is registered in Kenya falsely claimed in a May 31 story that Chauvin committed suicide while in prison, citing supposed “U.S media” reports.. But three of the four images used in the post are old and have nothing to do with the current protests.. Across social media, posts falsely claimed to show a picture of the White House in the dark — purportedly “for the first time” in history — as protesters marched outside on May 31.. Some social media posts misleadingly suggested that piles of bricks are being staged ahead of the protests over Floyd’s death to incite violence.. A conspiracy theory that Martin Gugino — the 75-year-old man who was hospitalized after being pushed by police during a protest in New York — was an “ANTIFA provocateur” trying to “black out” police equipment got widespread attention after Trump tweeted about it.. False claims that nearly everyone involved in Floyd’s death — including Floyd — were “crisis actors” spread widely online.. A conspiracy theory on Facebook falsely claimed that the killing of George Floyd was “filmed before covid19” because “[n]ot a single person is wearing a mask” in the videos.

A timeline of events leading up to George Floyd's death has been revealed by authorities.

Image caption, George Floyd repeatedly told the police officers who detained him that he could not breathe. Transcripts of police bodycam footage show Mr Floyd said more than 20 times he could not breathe as he was restrained by the officers.. The employee said the man appeared "drunk" and "not in control of himself", the transcript says.. Media caption, In June Panorama spoke to local people to piece together the moments leading up to George Floyd's death. Image caption Tributes to George Floyd at a makeshift memorial. Image copyright by Getty Images. George Floyd dies after being arrested by police outside a shop in Minneapolis, Minnesota.. In some places, like Portland, Oregon, protesters lie in the road, chanting "I can’t breathe".. Image caption Members of a CNN crew are arrested at a protest. Image copyright by Reuters. A CNN reporter, Omar Jimenez, is arrested while covering the Minneapolis protest.. Mr Jimenez was reporting live when police officers handcuffed him.. Image caption Former Minneapolis police officer Derek Chauvin after being charged over the death of George Floyd. Image copyright by Getty Images. Former Minneapolis police officer Derek Chauvin, 44, is charged with murder and manslaughter.. Image caption Demonstrators set fire to rubbish in New York. Image copyright by Reuters. Violence spreads across the US on the sixth night of protests.

Boston Scientific's open letter shows the value of listening to workers from marginalized groups, especially after incidents tied to systemic racism.

CEO Michael Mahoney's open letter to the company shows the value of employee resource groups and listening to workers from marginalized backgrounds — especially after major incidents tied to systemic racism.. For background: A widely circulated, eight-minute video showed George Floyd, 46, crying for help while now former Minneapolis police officer Derek Chauvin pinned Floyd's neck with his knees.. Boston Scientific published its open letter on its company website.. According to the letter, nearly 9,000 Boston Scientific employees live and work in Minneapolis, where Floyd died.. The committee also acknowledges that not everyone will process George Floyd's death the same way.. Experts say it's important for leaders to encourage workers of color to talk about race, though it doesn't happen often.. Business Insider's Marguerite Ward reported on research by Accenture that found 98% of senior leaders feel their company is inclusive — but only 80% of rank-and-file employees feel the same way.. Mahoney's letter reminds employees that the company has an obligation to make the world a better place.. At Boston Scientific, employees know their work advances medical science in a way that benefits people around the world.. Sadly, George Floyd is one of many who have recently died because of injustice.. In line with our values at Boston Scientific, we will not accept hate, racism or intolerance of any kind.. The tragedy in Minneapolis hit particularly close to home for the nearly 9,000 members of the Boston Scientific team who live and work there.. It's critical that we continue to talk about discrimination and injustice because dialogue—and action—is the path to a better future .. Thank you for commitment to Boston Scientific and to making our global workplace an environment where everyone feels safe, valued and included.

There have been many Black Lives Matter protests before, but things seem different this time. Why?

Image caption, Wengfay Ho (second from left) said she joined a Black Lives Matters march for the first time after George Floyd's death. Similarly, Wengfay Ho said she had always supported the Black Lives Matter movement, but George Floyd's death was a particular "catalyst" that prompted her to take to the streets for the first time.. Mr Floyd's death came shortly after the deaths of Ahmaud Arbery and Breonna Taylor.. The vast majority of protests across the US were peaceful - and in several cases local police officers also showed their support.. In some places, like Portland, Oregon, protesters lie in the road, chanting "I can’t breathe".. Image caption Members of a CNN crew are arrested at a protest. Image copyright by Reuters. A CNN reporter, Omar Jimenez, is arrested while covering the Minneapolis protest.. Image caption Former Minneapolis police officer Derek Chauvin after being charged over the death of George Floyd. Image copyright by Getty Images. Former Minneapolis police officer Derek Chauvin, 44, is charged with murder and manslaughter.. At least 4,400 people have been arrested.. Image caption Protester addresses crowds in Australia. Image copyright by Getty. As the US saw another weekend of protests, with tens of thousands marching in Washington DC, anti-racism demonstrations were held around the world.

The unrest in America has cheered its foes and globalised the struggle against racism

But it is certainly still the nation that cannot be ignored, the one that, in a sense, sets the political weather globally.. So when it goes through a trauma as it has since the killing by the police of George Floyd, the impact is felt worldwide.. Mr Floyd’s death has provoked popular protests in dozens of countries; it has also been an opportunity for gloating from the governments of America’s foes and rivals, and has been an embarrassment for its friends and allies.. This past weekend saw hundreds of protests not just in America, but around the world.. On Saturday in Parliament Square in London, the largest of many demonstrations in Britain, tens of thousands of people braved chilly squalls and the risk of covid-19, which had led government ministers to call for protests to be shunned.. They shouted Mr Floyd’s name, chanted “Black Lives Matter” and, every now and then, dropped to one knee with one clenched fist raised skyward.. They were protesting against not just violence by the American police, or President Donald Trump’s handling of the unrest, but against racism at home.. Palestinians saw echoes of George Floyd’s fate in the shooting by police in Jerusalem on May 30th of Iyad Halak, a 32-year-old with severe autism, who was apparently mistaken for somebody else.. Mike Pompeo, America’s secretary of state, undeterred by the irony that America now appeared far more likely than China to deploy armoured vehicles against peaceful protesters in its national capital, observed the date by meeting veterans of China’s democracy movement.. Hu Xijin, editor of Global Times , a tub-thumping party-controlled tabloid, clearly enjoyed drawing attention to these coincidences.. Iran’s leaders have been milking America’s predicament for all it is worth.


1. Watch NBC News NOW Live - June 2
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2. Building a More Inclusive Innovation Economy in Boston
(MIT Sloan Alumni)
3. Inclusive Innovation Economy | Women, Money, Jobs, and the Impact of COVID
(MIT Sloan Alumni)
4. House Judiciary Committee holds hearing on racial profiling and police brutality
(CBS News)
5. Diversity, Equity, and Inclusion (DEI) - A Leadership Imperative for Systemic Transformation
6. Unlocking Resources in the Innovation Economy: Expanding Access to Capital
(MIT Sloan Alumni)

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