PayPal pledges over $500 million to support minority-owned U.S. businesses

PayPal Holdings Inc said on Thursday it was pledging $530 million to support black and minority-owned businesses in the United States and foster diversity, amid worldwide protests over racial injustice.

The bulk of the money - $500 million (£395 million) - will be devoted to the creation of a economic opportunity fund that will invest in black and under-represented minority businesses and communities, the U.S. electronic payments firm said, according to an internal memo and company statement.

The funding will be invested through community banks and credit unions serving minority communities or through direct investments, the company said.

"Let me be clear: I stand with our Black teammates and with the Black community, as does the entire PayPal community," CEO Dan Schulman said in the internal memo. "We stand with you and we support you – and we must publicly declare that Black lives matter."

PayPal joins a string of U.S. corporations who have committed funds to address racial inequality in the wake of protests sparked by the May 25 death of George Floyd, a black man who died after a Minneapolis police officer knelt on his neck. African-Americans have also suffered disproportionately from the economic impact of the COVID-19 pandemic.

Bank of America Corp has pledged $1 billion over four years to help communities address economic and racial inequality. Goldman Sachs last week created a $10 million fund for racial equity, while Nike Inc pledged $40 million over four years and $100 million over 10 years. San Jose, California-based PayPal said $10 million of the total pledged will be used for emergency grants to black-owned U.S. businesses hurt by the effects of the coronavirus lockdown.

The grants of $10,000 each will be aimed at covering expenses needed to stabilize and re-open businesses, said Connie Evans, president and CEO of the Association for Enterprise Opportunity, the organization co-managing the program.

"Those businesses aren't going to make it if we can't get immediate resources into their hands," Evans told Reuters.

A further $15 million will be used to foster diversity within the company by expanding its inclusion programs, according to the statement.

In the United States, 6% of PayPal's total workforce identifies as black, while 2% of its technical roles are held by black employees, according to the company's 2019 Global Impact Report. According to the U.S. census, around 13% of the country identifies as black or African-American.