By Ruth Umoh
Yelp announced on Tuesday that it will deposit just under 2% of its cash reserves, or $10 million, into financial institutions that support Black and underserved communities in the U.S.
The $10 million will be divvied up among three banks. About $2.5 million will go to the New York-based Carver Federal Savings Bank, which provides nearly 75% of its loan capital to minority- and women-owned business enterprises in low- to moderate-income communities.
Yelp will deposit $5 million into Broadway Federal Bank to support its affordable housing initiatives in Los Angeles, and another $2.5 million into Citizens Savings Bank to further its mission of supporting small businesses in underserved areas in Nashville and Memphis.
All three of the selected banks are certified Community Development Financial Institutions, which have long catered to predominantly Black communities but have seen their numbers dwindle over the last decade thanks, in part, to banking industry consolidation.
“Access to financial services and capital is not equitably distributed in the United States, and we believe that it’s important for us to contribute that capital to banks that are bringing financial services and supporting those communities through lending,” says Yelp CFO David Schwarzbach.
The venture is the brainchild of Yelp’s treasurer, who saw the move as a way to support Black-owned businesses, which have disproportionately faced financial challenges created by the pandemic.
The $10 million deposit represents about 1.5% of Yelp’s $590 million cash holding at the end of the third quarter and comes just months after the streaming giant Netflix announced plans to infuse 2% of its cash pile, representing $100 million, into financial institutions and organizations that service Black communities.
“As much as 41% of black-owned small businesses could close because of this pandemic, so these kinds of partnerships and dollars allow us to put the cash back into the community in a way that helps their businesses potentially survive this difficult time,” says Michael Pugh, president and CEO of Carver Bank.
Carver has provided $35 million in loans to small businesses during the pandemic, preserving more than 3,500 jobs in the communities it serves, Pugh says, adding that 80 cents of each deposited dollar is reinvested back into the community.
Also on Tuesday, Yelp released its annual diversity report showing a 13.6% increase in the number of underrepresented employees and a 12.9% jump in the number of managers from racial minority groups. While the percentage of Black employees, at 13%, is reflective of their demographic makeup in the U.S., they represent just 2% of Yelp’s technical workforce.
Miriam Warren, Yelp’s senior vice president of diversity, engagement and belonging, admits that this is an area where the company must improve. “We have to open our recruiting pipelines and our sourcing strategies to ensure that we’re finding great talent—wherever it is.”
The shift to remote work amid the pandemic has provided more of an opportunity to do just that. “Previously, we had our engineering teams pretty centralized in San Francisco, but now we can recruit from anywhere in the world and I think that will allow us to further diversify our technical ranks and bring in more Black talent,” Warren says.
Earlier this year, Yelp launched an executive diversity task force whose members include the search and review platform’s CEO Jeremy Stoppelman, as well as its CFO and COO, among others.
Originally posted on Forbes