ImpactAlpha, November 12 — Google, Netflix, PayPal, Square. Twitter is the latest big-tech firm to throw its weight — and corporate cash — behind community development financial institutions, or CDFIs.
Twitter committed $100 million in long-term, below-market loans, becoming the first corporate investor in the Opportunity Finance Network’s new Finance Justice Fund, which is looking to allocate $1 billion to finance Black, Latinx and indigenous rural borrowers across the U.S.
“We decided that we wanted to find a way that we could do so as well,” said Twitter CFO Ned Segal, referring to his high-tech peers. “But we wanted to make sure that we did it in a scalable and repeatable way where others could follow us.”
$100 million is about 1% of Twitter’s cash stockpile, according to the New York Times.
Twitter also made a $1 million grant to OFN to administer the fund. It will reinvest the profits from the loans to fund a partnership with Operation HOPE to provide financial coaching and tools to clients of Black banks, minority-serving financial institutions or institutions serving underserved communities across the U.S.
Qualifying OFN member CDFIs can start submitting applications to the fund starting next month, president and CEO Lisa Mensah said during her closing remarks on the network’s 2020 annual conference, which convened more than 1,500 CDFI practitioners, investors, funders and advocates.