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Billionaire Robert Smith Unveils ’2% Solution’ Investment Plan for Black Communities

Robert F. Smith

Billionaire Robert F. Smith is spearheading a proposal that would help foster equity and opportunities for financial growth in African American communities. Smith’s newly proposed “2% Solution” calls for large corporations to use 2 percent of their annual net income to empower minority communities over the next decade.

“Nowhere is structural racism more apparent than in corporate America,” Smith, who made headlines last year after paying off Morehouse College students’ debt, said during Forbes’ virtual Philanthropy Summit last week. “If you think about structural racism and access to capital, 70 percent of African American communities don’t even have a branch [or] bank of any type.”



Smith became extremely aware of this disproportion during the financial crisis brought on by COVID-19. According to Forbes, the mega-investor had attempted to help Black-owned businesses and banks that serve Black communities obtain Paycheck Protection Program Loans, but was met with numerous obstacles. As a result, Smith found that African American business owners were having trouble accessing the emergency funds that the federal government had made available.

“The deprivation of capital is one of the areas that creates a major pro... to the enablement of the African American community,” he said during the summit. “The first thing to do is put capital into those branch banks to lend to these small businesses to actually create an opportunity set... drive it into these small businesses, which employs 60 percent-plus of African Americans.”



In the past weeks, Smith has been sharing his “2% Solution” with business leaders nationwide. In his talk on Monday (June 22), he also pointed out that the average American household already donates 2 percent of their income annually to charity, and he believes corporate America should follow suit.

According to Forbes, the net worth of the US’s largest companies over the last decade was $1.3 trillion, which — with Smith’s plan — would leave around $25 billion to be used for strengthening healthcare infrastructure in Black neighborhoods, funding STEM education at HBCUs and more. Over the next 10 years, Smith believes corporate spending could provide billions of dollars to Black-owned businesses, banks and community development efforts.

See more from Smith’s address at the Forbes Summit here.

Billionaire Robert F. Smith is calling on large corporations to invest 2% of their annual net income over the next decade to help empower Black communities. 

Smith’s proposal is part of his new “2% Solution,” which “calls on big banks to capitalize the financial institutions that service Black-owned businesses and minority-run entrepreneurial ventures,” per Minority Business Development Agency. 

“Nowhere is structural racism more apparent than in corporate America,” Smith said in a keynote address he gave at the Forbes 400 Summit on Philanthropy last week “If you think about structural racism and access to capital, 70% of African American communities don’t even have a branch, bank of any type.”

Via mdba.gov:

In recent days, Smith, whose net worth is estimated to be $5 billion, has been sharing a concrete plan with the nation’s business leaders that argues that an investment equal to 2% of net income over the next decade would be a small step toward restoring equity and mobility in America.

He has implied that America’s big corporations should feel compelled to support such a plan given the exclusionary practices of many industries over several decades. Smith made the case that the average American household charitably donates 2% of its income annually and is asking corporate America to do the same.

“The deprivation of capital is one of the areas that creates a major problem to the enablement of the African American community,” Smith said during the summit. “The first thing to do is put capital into those branch banks to lend to these small businesses to actually create an opportunity set… drive it into these small businesses, which employs 60 percent-plus of African Americans.”

via Revolt TV:

According to Forbes, the net worth of the US’s largest companies over the last decade was $1.3 trillion, which — with Smith’s plan — would leave around $25 billion to be used for strengthening healthcare infrastructure in Black neighborhoods, funding STEM education at HBCUs and more.

Over the next 10 years, Smith believes corporate spending could provide billions of dollars to Black-owned businesses, banks and community development efforts.

Here’s more from mdba.gov:

In his talk on Thursday, Smith pointed out that the net income of the ten largest U.S. banks over the last ten years was $968 billion. He figured just 2% of that would amount to $19.4 billion, which could be used to fund the core Tier 1 capital of community development banks and minority depository institutions that primarily service Black communities. 

See more from Smith’s message at the Forbes Summit here.

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Comment by Damien on July 29, 2020 at 1:32am

Do you really think this is a great idea? I noticed long ago that rich guys are in no hurry to share their secrets and profits with the poor. They can do something that will bring them more profit later (for example, tax refunds due to charity). Be smarter. The Internet gives us great opportunities now. If you want to earn more - start your blog, for example. Analyze popular pages with the web scraping service and make a similar analog with your content. And that's just one of the great ideas that are working right now. I used to rely only on myself. So, I can be confident in the future.

Comment by mr1stroke on July 12, 2020 at 9:35pm
Robert has been giving secretly to the black community all you have to do is research people, life is about mathematic if the black community is smart they would question each white corporation who now decide to give to the black community, where have they been all those years, where is that money going, if they are serious why dont they invest in the community finance those black dreamers who cannot get finance from banks to start their businesses in the community and employ the people in the community, will someone stand up and ask real questions instead of allowing crooks like Al sharpton to continue and sell them out, now he is putting together a march, i rather stay home and get drunk, what is this march suppose to do other than get him another check from the government, he is good to put together marches but cannot even address a boycott because corporate America and politicians are paying him to keep his idiots followers quiet and lost
Comment by Lu on July 12, 2020 at 5:51pm

Hopefully, this is a legitimate step towards some form of progress. SELAH

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