The Economic Opportunity Fund
What is the fund’s focus?
In 2020, PayPal announced a $530 million commitment to support Black and minority-owned businesses and communities in the U.S., especially those hardest hit by the pandemic, to help address economic inequality. The Economic Opportunity Fund (EOF) formed part of this commitment, to promote racial equity by creating economic opportunities to address economic inequality and drive transformative change. The goals of the fund are to advance racial equity, sustain and strengthen underrepresented businesses and communities, and help address the economic underpinnings of racial injustice.
The fund is focused on promoting a Racial Equity and Social Lens. To help close the racial equity gap, they seek investments that create an inclusive economy and financial impact on people of color’s wealth. The funding has been allocated to high-impact treasury investments in minority-owned and focused banks, credit unions, and Black and Latinx-led venture capital funds.
What are the specific goals this commitment seeks to achieve?
Communities of color often lack access to the capital needed to create financial stability and build wealth. With the $530 million commitment of the Economic Opportunity Fund, PayPal seeks to support and strengthen Black and underserved businesses and communities over the long term, helping to drive financial health, access, and generational wealth creation. Towards this aim, it has provided capital to financial institutions and management funds, to expand wealth creation opportunities for diverse founders and provide equal access to capital and financial services for minority communities to fight for racial equity and economic equality. i.e., Black- and Latinx-led early-stage venture capital funds.
In 2020, through the empowerment partner grants, PayPal aimed to provide financial support and resources to Black-owned businesses and other underrepresented minority entrepreneurs that faced unprecedented challenges from the Covid pandemic. By empowering these businesses, PayPal sought to contribute to their growth and success in the marketplace. These grants provided direct support to business owners to cover expenses related to stabilizing and reopening their businesses.
What are the ways you are applying a Gender lens in your Racial Equity commitment and investment approach?
The Economic Opportunity Fund is focused on increasing access to capital to financial institutions and management funds that help underserved communities of color to fight barriers to economic equity. They have invested in female and diverse fund managers of color who are helping drive an inclusive financial system and enabling better access to capital for minority entrepreneurs who have faced the impacts of systemic inequities. Taking a racial equity lens commitment has contributed to improved metrics into gender diversity of the funds.
Within the treasury portfolio they have deposits into minority depository institutions that are community development financial institutions that provide essential financial services to low-income communities of people of color through this they are seeing more small business lending, saving, mortgages etc. i.e. providing essential financial tools for wealth building.
Snapshot
Name: Paypal
Investment type: The Economic Opportunity Fund
Fund Size: $500 million commitment
Operates in: United States
Focus: Commitment to Support Black Businesses, Strengthen Minority Communities and Fight Economic Inequality.
