Protesters march this month in Minneapolis during jury selection in the...

Protesters march this month in Minneapolis during jury selection in the trial for former police officer Derek Chauvin, who is charged with murder in the death of George Floyd during an arrest last May.  Credit: AP/Jim Mone

In the months since the police killing of George Floyd sparked a racial reckoning in the United States, American corporations have emerged as an unexpected leading source of funding for social justice.

Corporate giving to racial equity causes has far outpaced donations from foundations and individual philanthropists since Floyd’s killing in May, according to the philanthropy research organization Candid.

Companies donated or pledged about $8.2 billion of the $12 billion in total contributions that were earmarked for racial equity — the "first time direct corporate giving to racial equity causes has reached this magnitude" — said Andrew Grabois, Candid’s corporate philanthropy manager.

Sizable commitments have come from corporations ranging from JPMorgan Chase, PayPal and MasterCard to Microsoft, Salesforce and the National Football League. Those pledges don’t even count other minority-focused investments, like a JPMorgan initiative to lend to minority homebuyers and small businesses, that could eventually benefit the corporations themselves.

The trend signals a shift for large corporations, fueled by the evolving expectations of younger employees and consumers about corporate responsibilities to social causes. Civil rights advocates say the corporate money won’t be enough to soon achieve the racial equity in hiring, housing and policing or the investment in Black communities and institutions that they've sought. But it marks a start.

Expectations changing

"The world is changing, and the expectations of how companies engage are changing," said Brandee McHale, Citi’s head of community investing and development.

The catalyst, of course, was widely viewed killing of Floyd last May at the hands of the Minneapolis police, with video footage showing the former officer Derek Chauvin pressing his knee against Floyd’s neck for about nine minutes. This month, jury selection has been proceeding in Chauvin’s murder trial.

"When George Floyd was killed, consumers and stakeholders called on companies to invest in issues related to racial equity, and many responded," Grabois said. "Direct corporate funding for racial equity and justice has become exponentially larger — and more urgent — than what companies have committed to in the past."

Companies tend to be big donors during times of crisis. But traditionally, Grabois noted, large corporations funded mainly educational and cultural groups, while donating comparatively little to racial equity causes. Dipanjan Chatterjee, a brand analyst at Forrester Research, suggested that "long-simmering anguish and anger, agitated by a relentless political rhetoric that overtly flirted with white supremacy, created a perfect storm for Floyd’s death to transform Black Lives Matter from a political to a human issue."

Since late May, Grabois said, financial commitments by companies to racial equity causes have grown "exponentially larger" than any other cause other than COVID-19. A report by McKinsey & Company, which tracked corporate responses from May to October, found that of the top 1,000 U.S. companies, 18% made internal commitments, like diversifying their hiring, and 22% pledged to promote racial equity through donations or other means.

Support for housing, businesses

Including pledges of business investments, the report found $66 billion was committed to such causes. Nearly 80% of those commitments targeted affordable housing and business development, with 86% of the money coming from the financial services industry.

For some brands, like Ben & Jerry’s, the donations were extensions of long-standing commitments to racial justice. For others, the pandemic and protests led them to face "the kinds of really difficult social issues" that many had previously preferred not to engage with, said Melissa Berman, CEO of Rockefeller Philanthropy Advisors.

Berman suggested that some pressure has come from millennial and Generation Z consumers who increasingly want the money they spend and invest to be used in ways consistent with their values. A survey last year by the research firm YPulse found that 69% of these younger buyers believe that brands should engage with the Black Lives Matter movement.

"Consumers spoke up for racial justice, and they demanded that the brands they patronize do the same," Chatterjee said.

Tracking the contributions can be difficult. Typically with corporate philanthropy, unlike with foundations or public charities, details tend to be sparse. And Candid said it’s unclear, at least from initial announcements, where about $3.7 billion is going.

Well-known organizations like the NAACP Legal Defense and Educational Fund and the National Urban League and historically Black colleges and universities have received some portion of the corporate donations. But determining how many or which Black-led organizations are actually benefiting can be hard because tax filings for nonprofits don't include racial identifiers, said Shena Ashley, head of the Urban Institute’s Center on Nonprofits and Philanthropy.

"I have all the data that we have in the nonprofit sector," Ashley said, "and I still don’t know the number of Black-led organizations that exist in the United States."

Rock climbing? Indoor beach volleyball? Water parks? Arts and crafts? NewsdayTV's Elisa DiStefano and Newsday deputy lifestyle editor Meghan Giannotta have your look at ways to spend your winter break. Credit: Newsday/Howard Schnapp, Kendall Rodriguez; Gary Licker

Things to do now on LI Rock climbing? Indoor beach volleyball? Water parks? Arts and crafts? NewsdayTV's Elisa DiStefano and Newsday deputy lifestyle editor Meghan Giannotta have your look at ways to spend your winter break.

Rock climbing? Indoor beach volleyball? Water parks? Arts and crafts? NewsdayTV's Elisa DiStefano and Newsday deputy lifestyle editor Meghan Giannotta have your look at ways to spend your winter break. Credit: Newsday/Howard Schnapp, Kendall Rodriguez; Gary Licker

Things to do now on LI Rock climbing? Indoor beach volleyball? Water parks? Arts and crafts? NewsdayTV's Elisa DiStefano and Newsday deputy lifestyle editor Meghan Giannotta have your look at ways to spend your winter break.

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