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Yelp to deposit $10 million in cash in banks serving black people

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Yelp announced on Tuesday that it would deposit just under 2% of its cash reserves, or $10 million, in financial institutions that support black and underserved communities in the United States.

The $10 million will be split between three banks. About $2.5 million will go to New York-based Carver Federal Savings Bank, which provides nearly 75% of its loan capital to minority and women-owned businesses in low-to-moderate income communities. .

Yelp will deposit $5 million in Broadway Federal Bank to support its affordable housing initiatives in Los Angeles, and an additional $2.5 million in Citizens Savings Bank to continue its mission of supporting small businesses in underserved areas of Nashville and Memphis.

The three selected banks are certified community development financial institutions, which have long catered to predominantly Black communities, but have seen their numbers dwindle over the past decade thanks, in part, to consolidation in the banking sector.

“Access to financial services and capital is not evenly distributed in the United States, and we believe it is important for us to bring this capital to banks that provide financial services and support these communities through loans,” said Yelp CFO David Schwarzbach.

The business is the brainchild of Yelp’s treasurer, who saw the move as a way to support black-owned businesses, which have faced disproportionate financial challenges created by the pandemic.

The $10 million deposit represents about 1.5% of the $590 million held by Yelp at the end of the third quarter and comes just months after streaming giant Netflix. announced plans to inject 2% of its cash, or $100 million, into financial institutions and organizations serving black communities.

“Up to 41% of Black-owned small businesses could close because of this pandemic, so these types of partnerships and dollars allow us to put money back into the community in a way that helps their businesses survive. potentially at this difficult time,” said Michael Pugh, President and CEO of Carver Bank.

Carver has provided $35 million in small business loans during the pandemic, safeguarding more than 3,500 jobs in the communities it serves, Pugh says, adding that 80 cents of every dollar deposited is reinvested in 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% increase in the number of managers from racial minority groups. While the percentage of black employees, at 13%, reflects their demographic makeup in the United States, they make up only 2% of Yelp’s tech workforce.

Miriam Warren, senior vice president of diversity, engagement and belonging at Yelp, agrees this is an area where the company needs to improve. “We need to open up our recruitment pipelines and sourcing strategies to ensure we find great talent, wherever they are. »

The shift to remote work amid the pandemic has provided more opportunities to do so. “Previously, our engineering teams were fairly 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 attract more black talent,” Warren said.

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 chief financial officer and chief operating officer, among others. .

“The task force reviews all ongoing projects company-wide and has been key in holding individual leaders accountable as we report on the progress they are making or not making in the organization,” says Warren.

In addition to its internal diversity and inclusion efforts, Yelp has worked with black-led organizations, partnering first with My black receipt, a campaign to entice consumers to buy black. The company also joined the 15% Commitmentreserving 15% of its digital storage space for black businesses.

In June, the platform launched a tool which allows businesses to identify as Black-owned, making it easier for users to find and patronize businesses with diverse leadership. And in October, he announced his intention to add an alert on an establishment’s page when they come to public attention for overtly racist acts.