As protestors decry the deaths of George Floyd and Breonna Taylor, Silicon Valley companies announced their support for Black Lives Matter via donations and diversity initiatives. But how much of their vast revenue are these companies actually committing to change? And how do these public announcements compare to longstanding corporate track records? Below, we examine how recent tech and VC firms’ promises compare to their full financial power and previous industry actions.
In response to the resurgence of the Black Lives Matter Movement, many major tech and venture capital firms have used social media to broadcast their donations to civil rights organizations and newly-launched inclusive initiatives. However, many of these firms’ cash gifts pale in comparison to their actual revenues and net worth. Their statements of support for the black community also contrast with the dual industries’ infamous lack of diversity.
Here is what Google, Amazon, Facebook, Twitter, Apple, Silicon Valley Bank, and others have announced regarding donations for racial justice advocacy and how it compares to previous diversity practices and total monetary assets.
In a June 3rd email to employees, Google and parent company, Alphabet, CEO Sundar Pichai announced that the company would give $12 million to civil rights groups as well as $25 million in ad grants to organizations fighting racial injustice. Pichai also disclosed that Google had matched $2.5 million in recent employee donations and had donated $32 million toward racial justice over the previous five years.
Adding up the most recent donations, the $42 million total is still just .02% of Google’s $161 billion yearly revenue and .09% of their $34 billion net profit. According to Business Insider, Google has spent over twice as much annually on free food for its employees and the $12 million civil rights donation is equal to the company’s yearly budget for chicken alone.
Furthermore, these donations come at a time when Google is struggling with its own in-house diversity efforts. On the same day as Pichai’s email release, Alphabet rejected a shareholder proposal that tied executive compensation packages to diversity and inclusion goals. According to Google’s 2020 Diversity Report, the company’s workforce is 51.7% white, 41.9% Asian, 3.7% black, 5.9% Latinx, and .8% Native American. The company has also been criticized for reducing employee training sessions on implicit bias and race. Last year, a black employee famously released a memo detailing many instances of employee racism he had experienced before deciding to leave the company.
The retailing giant has announced that it will donate $10 million to social justice organizations serving Black communities. Amazon will also match employee donations up to $10,000 per employee and give its Black Employee Network a grant to support local education and racial equality organizations. Amazon’s $10 million donation amounts to just .003% of its 2019 $280 billion revenue, and .09% of its $11 billion net profit.
Amazon has also announced that it would cease selling its facial recognition tool, Rekognition, to the police for one year. The company had come under fire from the ACLU and other organizations for selling surveillance technology that often misidentifies minorities to law enforcement officials.
Facebook CEO and founder Mark Zuckerberg have pledged that the company will donate $10 million to racial justice organizations. In the same announcement post, Zuckerberg also highlighted the Chan Zuckerberg Initiative, his limited liability company, for donating roughly $40 million annually to racial justice organizations. Facebook’s most recent donation represents .01% of its $70 billion annual revenue and .05% of its $18 billion net profit.
Like many other tech companies, Facebook has been criticized for its lack of employee diversity. According to the company’s 2019 annual diversity report, black and Hispanic workers combined account for only 9% of the company, up just .06% from the previous year. Furthermore, Zuckerberg has faced backlash for refusing to respond to or remove President Donald Trump’s recent tweets about BLM protestors, including his incendiary comments that “When the looting starts, the shooting starts.”
Twitter CEO Jack Dorsey tweeted his support for “police policy reform now” on June 1 and encouraged others to donate to his #startsmall grants movement with funds directed to organizations serving black and brown communities. As of June 12, the donated grants totaled $134 million, which equals 3.8% of Twitter’s $3.5 billion annual revenue and 13.4% of Twitter’s $1 billion net profit.
Unlike Facebook, Twitter has responded to Donald Trump’s tweets by placing a warning label over one of the posts, stating that it glorified violence. In response, Trump signed an executive order to counter the “censorship” from social media companies.
Apple has launched a $100 million racial justice initiative which will include programs to increase the company’s internal diversity as well as promote general education and criminal justice reform. In a video announcement on Twitter, CEO Tim Cook disclosed that the initiative would begin in the United States and spread globally over time. Previously, Cook had published a letter condemning racial violence and highlighting the company’s other social justice efforts, including donating an unspecified amount to “organizations including the Equal Justice Initiative,” and matching employee donations made during June.
Apple’s $100 million commitment to its new Racial Equity and Justice Initiative equals .03% of the $260 billion annual revenue of and .18% of its $55 billion net profit. Similar to other large tech companies, Apple has struggled to amass a diverse workforce. Its most recent diversity report reveals that underrepresented minorities constitute just 24% of Apple’s workforce (compared white and Asian employees who constitute 50% and 23% of the total employee count, respectively). Critics have pointed out that this figure includes Apple’s more diverse retail staff and that engineering and executive sectors employ even fewer minorities.
Microsoft CEO Satya Nadella emailed employees calling for the organization to “do better,” while simultaneously highlighting its Criminal Justice Reform Initiative, a program launched in 2019 to address current issues with the national policing system. At the same time, Nadella pledged donations of $250,000 each to six organizations that serve the Black Community: Black Lives Matter Foundation, Equal Justice Initiative, Innocence Project, The Leadership Conference, Minnesota Freedom Fund, and NAACP Legal Defense & Education Fund. Like Amazon, Microsoft has also declined to sell its facial recognition technology to the police until stronger federal regulations are in place.
The $1.5 million donated amounts to .0012% of Microsoft’s $125 billion annual revenue and .0038 of its $39 billion net profit.
On May 30, the official Netflix account tweeted, “To be silent is to be complicit. Black lives matter.” In addition, the streaming services giant has created a special viewing category on its platform titled “Black Lives Matter,” which features content produced by or starring black artists.
CEO Reed Hastings has also donated $1 million to the Center for Policing Equality. In spite of its good intentions, Netflix’s workforce diversity is still low; just 7% of its workforce identifies as black and 8% as Hispanic (compared to 47% who identify as white, and 24% who identify as Asian). Hastings’ donation equals .005% of the company’s annual $20 billion revenue and .05% of the company’s $1.8 billion net income.
PayPal‘s $530M Diversity Fund
The financial transactions company has committed $530 million towards black and minority-owned businesses in the United States. According to a company press release, $500 million will be used to bankroll an economic opportunity fund aimed at minority-owned businesses as well as the banks and credit unions that serve them.
$500 million commitment to create an economic opportunity fund to support and strengthen Black and underrepresented minority businesses and communities over the long term, and designed to help drive financial health, access and generational wealth creation. This initiative will include bolstering the company’s relationships with community banks and credit unions serving underrepresented minority communities, as well as investing directly into Black and minority-led startups and minority-focused investment funds. Startups and investment funds are invited to express interest to the PayPal Ventures team in this form.PayPal said in a release that “as part of its investment, the company is bolstering its internal programs to further increase diversity, equity and inclusion within the PayPal community.”
PayPal has also pledged $15 million to strengthen internal diversity programs and $10 million in grants to minority-owned businesses “impacted by COVID-19 or civil unrest.”
“I stand with our Black teammates and with the Black community, as does the entire PayPal community,» wrote CEO Dan Schulman in an internal company memo. According to a 2017 report, just 8% of the company’s workforce identifies as black, while 7% identifies as Hispanic. Racial disparities are greater in the leadership and technical sectors. The $530 million commitment equals 3% of PayPal’s $17 billion revenue and 26% of its $2.4 billion net profit.
As one of the world’s biggest venture capital firms, Softbank recently launched a $100 million fund to invest in firms led by people of color. In a LinkedIn announcement post, Softbank Group CEO Marcelo Claure stated, “Entrepreneurs of color have so much potential, but far too many of them face barriers and lack opportunities to thrive. According to a 2019 study, just 1% of VC-backed founders are black and only 1.8% are Latino. This must change.” Claure also revealed that the SoftBank group will match employee donations up to $1,000 to support racial justice non-profits.
While Softbank’s $100M fund is not insignificant, it constitutes just .1% of the company’s much larger $100 billion Vision Fund, the largest technology-centered venture capital fund in the world. The huge company also boasted a 2019 revenue of over $56 billion with a net profit of $8 billion. Softbank recently confronted internal diversity issues when the CEO of Banjo, one of the firm’s funded start-ups, resigned after his former connections to the KKK were discovered.
The VC firm launched the Talent x Opportunity (TxO) fund to invest in traditionally underrepresented founders. The fund currently has $2.2 million donated by firm partners although this number is expected to grow. The announcement also disclosed that Co-founder Ben Horowitz and his wife would match up to $5,000,000 in additional donations.
The fund’s current $2.2 million represents just .018% of the firm’s $12 billion assets under management. Critics have also questioned how the firm would source the recipients of the fund although the firm has declined to answer this question.
The Menlo Park, CA-based venture firm sent a letter to employees condemning acts of violence against the black community and pledging to match donations to civil rights organizations 2:1.
The firm’s partners also stated that the firm would be “rolling out internal programs to create safe spaces to share, listen, and learn” and providing virtual mental health services.
The startup seed accelerator has not announced any formal donations or initiatives. In a June 9 blog post titled “Next Steps,” the company announced it had created “a list of organizations making a serious impact” on racial justice issues and would be “discussing the ongoing impact we will have as an organization and as a community.”
As of October 2019, Y combinator’s investments were valued at $155 billion. Although the company has established diversity as a priority, a 2017 report found that just 22% of the start-ups they’ve funded have a female founder, 8% have a black founder and 4% have a Latinx founder.
Silicon Valley Bank
The commercial bank known for funding tens of thousands of start-ups announced its partnership with Valence, a global networking platform for black professionals, to host a three-part virtual series on professional development for black leaders. The Valence Boost Challenge Virtual Event Series will be hosted June-August and cover topics including leadership, mentorship, and others.
SVB has not announced any other donations or initiatives at this time. The bank continues to run its Access to Innovation program, which aims to provide education and job opportunities for underrepresented minorities in the industry. SVB currently manages $75 billion in assets.
First Round Capital
On May 31, the VC firm tweeted its solidarity for the #BlackLivesMatter movement but has not announced any specific donations or initiatives.
In its most recent round of funding, First Round Capital raised roughly $220 million for their 7th fund.
This VC firm has been making waves as one of the few to target its funding towards immigrant entrepreneurs.
On June 1, the firm tweeted its solidarity with the black community and followed up by announcing donations of an undisclosed amount to organizations such as the NAACP and Minnesota Freedom Fund. Unshackled raised $20 million in its most recent round of funding.
For these major tech companies and venture capital firms to recognize the gravity of our current social crisis is an important first step. However, announcing one’s solidarity on social media is not the same as living it, and throwing (an admittedly small fraction) of money at a problem is not always the answer.
Rather, one hopes these companies will take their own words to heart and actively hire underrepresented minorities to all levels of their firms, institute unconscious bias, and other racial awareness training, and promote greater charitable giving on a regular basis. It shouldn’t take mass deaths to spark this type of change, but given the situation we’re in, let’s encourage our industry leaders to use this time to cast off old habits and actively facilitate the better future they so visibly claim they want.