SAN FRANCISCO--(BUSINESS WIRE)--Square, Inc. (NYSE: SQ) announced today that it intends to invest $100 million in support of minority and underserved communities, driven by the company’s purpose of economic empowerment and its ongoing commitment to racial equity. The investment constitutes three percent of Square’s cash and marketable securities as of the end of the second quarter of 2020. Square commits to financial support for these causes in the future.
According to the U.S. Senate Committee on Small Business and Entrepreneurship, minorities make up 32 percent of the population, yet minority business ownership represents only 18 percent of the population. The Urban Institute notes that there are fewer than two dozen Black-owned banks in the U.S. today, which provide customers access to financial capital and resources, and offer the opportunity to invest in the success of their community. Square believes it is critically important to ensure that access to financial services is not just reserved for those with privilege. With this investment, the company hopes to increase the speed and scale in which these organizations can help minority and underserved communities.
In 2019, Square began dedicating deposits to Community Development Financial Institutions (CDFIs) and Minority Depository Institutions (MDIs) in communities around the country. These new investments are a continuation of the company's commitment to increasing access to financial services. By providing more capital to CDFIs and MDIs, the impacts can ripple across the communities they serve as more families buy their first homes and small businesses launch and evolve.
“Citizens Bank greatly appreciates its highly valuable and beneficial partnership with Square, Inc.,” said Sergio Ora, President and CEO of Citizens Bank, an organization in which Square made a small deposit earlier this year. “As the oldest continuously owned and operated African-American Bank in the United States and as a CDFI, Citizens Bank is very focused on establishing collaborative partnerships with organizations that are aligned with our long-standing commitment to provide superior financial services and financial education to the African-American community, as well as other underserved minority groups.”
Square intends to allocate the $100 million investment as follows:
- $25 million to deposits in CDFIs and MDIs around the United States.
- $25 million investment in The Keepers Fund sponsored by the National Bankers’ Association, a trade group representing minority-owned financial institutions that are committed to providing employment opportunities, entrepreneurial capital and economic revitalization in neighborhoods which often have little or no access to reasonably priced financial services. The Keeper’s Fund intends to make investments in MDIs that primarily lend in low and moderate income areas or to low and moderate income individuals by providing the capital these institutions require to thrive.
- $25 million investment in The Black Economic Development Fund managed by The Local Initiatives Support Coalition (LISC), one of the country's largest and most impactful social enterprises supporting projects and programs to revitalize communities, bring greater economic opportunity to residents, and facilitate financing of Black-owned businesses. The Black Economic Development Fund will provide deposits, bridge financing and other financing to Black-led financial institutions, anchor institutions, and businesses.
- An additional $25 million reserved for future investment into social impact projects, to be announced at a later date.
“It is refreshing to see a company like Square make a proactive investment to improve economic equality in the financial sector,” said Kenneth Kelly, Chairman of the National Bankers Association. “Square’s leadership to provide systemic solutions to change the narrative and trajectory on the equality issues is role-modeling the type of impact that many other organizations verbally aspire to achieve.”
“With its impact investment and committed partnership, Square is helping us fight the racial wealth gap and drive lasting gains for American families and communities,” said Maurice A. Jones, LISC president and CEO. “Investments in Black-owned banks, credit unions, CDFIs, other businesses and HBCUs fuel economic justice and opportunity in underserved communities and support a broadly shared prosperity throughout the country. This is especially important now, as people deal with the effects of COVID-19, a recession and a racial reckoning—and plan for recovery, reconstruction and renewed growth."
Square strives to help broaden access to the tools and services consumers and business owners need to thrive via the company’s two ecosystems, Cash App and Seller. The investments continue Square’s work in breaking down barriers across financial services and providing access to all.
About Square, Inc.
Square, Inc. (NYSE: SQ) builds tools to empower businesses and individuals to participate in the economy. Sellers use Square to reach buyers online and in-person, manage their business, and access financing. And individuals use Cash App to spend, send, store, and invest money. Square has offices in the United States, Canada, Japan, Australia, Ireland, Spain, and the UK.
Safe Harbor Statement
This press release contains forward-looking statements within the meaning of the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact could be deemed forward-looking, including, but not limited to, statements regarding Square’s (the Company) intentions regarding financial commitments and future investments.
Risks that contribute to the uncertain nature of the forward-looking statements include those listed or described from time to time in the Company’s filings with the Securities and Exchange Commission (the SEC), including the Company’s most recent Quarterly Report on Form 10-Q, which is on file with the SEC. All forward-looking statements are based on information and estimates available to the Company at the time of this press release. Except as required by law, the Company assumes no obligation to update any of the statements in this press release.