The Washington Post reports:
Apple and AbbVie, Facebook and Pfizer, Johnson & Johnson and Procter & Gamble, and other top corporations made broad claims about what they would do, pledging to be a force for societal changeand tofight racism and injustice, including violence against Black Americans.
Where and how they dedicated their money became the most visible signs of their priorities.
To date, America’s 50 biggest publiccompanies and their foundations collectively committed at least $49.5 billion since Floyd’s murder last May to addressing racial inequality — an amount that appears unequaled in sheer scale.
Looking deeper, more than 90 percent of that amount — $45.2 billion — is allocated as loans or investments they could stand to profit from, more than half in the form of mortgages. Two banks — JPMorgan Chase and Bank of America — accounted for nearly all of those commitments.
Meanwhile,$4.2 billion of the total pledged is in the form of outright grants. Of that, companies reported just a tiny fraction — about $70 million —wentto organizations focused specifically on criminal justicereform, the cause that sent millions into the streetsprotesting Floyd’s murderby a Minneapolis police officer.
The whole thing is here.
First, pause for a second and marvel at the fact that these companies and their foundations have committed $50 billion to this effort.
Second, I think it is practically impossible to read this report and come away thinking that these firms’ executives are evil, or even indifferent to society’s challenges. For one thing, if minorities are having a hard time gaining access to loans, it seems a concerted effort to address this challenge isn’t a bad thing.
Third, as I have said in the past, one of the many problems with demanding that companies act like social warriors is that it requires one to ignore the essence of what corporations are and what each must do to survive. The failure to understand this simple fact will lead to a lot of meaningless virtue-signaling from companies trying to figure out how to please everyone.
The Washington Post article is worth reading because it highlights some of the reasons why the approach that consists of asking corporations to fight society’s problems with large donations was never going to work as planned. Some scholars quoted in this piece get it:
“The answer to these massive problems is not in capitalism doing better or more. It’s not going to come from philanthropy. It’s not going to come from promises. It’s got to be a policy change,” said Baradaran, who has informally advised companies on impact investing.
“We don’t want just benevolent billionaires and nicer, softer, more-woke monopolies. We want an economic structure that allows for more mobility, and we don’t have that.”
The bottom line is that fixing racial problems that prevail in this country will not happen merely as a result of corporate philanthropy or efforts to pursue “social justice.” Genuine, lasting improvement requires removing hundreds of unfair rules imposed by government, including serious reforms of our criminal-justice system. Many personal and institutional incentives must be changed — and not least through cultural changes. It is a hard battle, but one worth fighting, and we each have a role to play.