An ‘overwhelming’ moment: Behind BofA’s $1B racial justice commitment
Bank of America had been working for over a year on a $500 million racial equality initiative that hit all the right hot buttons — affordable housing, small business, economic development in minority communities — but the crises of 2020 so increased the need that it suddenly seemed inadequate.
Once the coronavirus pandemic’s toll on people of color became clear, and following nationwide protests over the deaths of George Floyd, Breonna Taylor and others, the company moved quickly, doubling its commitment to $1 billion over the next four years.
Now, the pressure is on Vice Chair Anne Finucane to make sure BofA delivers on its promises.
“You’ve got a pandemic, you have a recession, and you have this moment this issue cracked open for all the world to see of racial injustice,” Finucane said in a recent interview. “This is a lot for anybody to digest. But in the black and African-American community, it is overwhelming.”
Finucane pledged accountability and shared some ideas for how the company could deploy the money, including hiring from historically disadvantaged communities.
Finucane is a natural choice to oversee the efforts and not simply because she’s responsible for the company’s environmental, social and governance (ESG) strategy. She has been the company’s face in the recent past when it has confronted prickly social issues, such as financing private prisons or certain types of gun manufacturers, though she also said the motivation comes from the top down.
“None of this happens unless your CEO wants it to happen, and Brian [Moynihan] wants all this to happen,” she said.
Finucane spoke with American Banker about the updated plan’s four priorities — workforce development, health care, housing and small-business assistance — and what they will entail. The following interview has been edited and condensed for clarity.
How do you plan to ensure transparency and accountability for this initiative?
ANNE FINUCANE: Well, first of all, it will be run through my team. I oversee the ESG efforts and sustainability efforts, among other things. So we will report out to the ESG committee, which is made up of business heads all over the company, both here and outside the U.S. We also get input from them, and it’s a very diverse committee. It’s literally at the top of the house, but it has good diversity, and it’s quite a robust conversation.
We will work with the infrastructure we have. We’ve already talked to [the bank’s internal] black and African American leadership council, and Hispanic leadership council. This initial $500 million was built with all of these people thinking through what more could we do. We’ll be programmatic, and we’ll report out. I’m sure we’ll report out on our ESG report as well as our human capital report, so it won’t be a vagary.
How are you dividing up the $1 billion commitment? Can you give some examples of how that money could be used?
It’s not divided up equally, and it’s not fully divided up right now because we want to use opportunity and not have so much prescription that we’re not seeing opportunity.
On health care, it’s an immediacy issue. It’s about providing and helping with testing, vaccines later and in between, just emergency health care. As an example, we’re working with Howard University Hospital on testing, contact tracing and some work they’re doing on emergency care and seeing if we can take that effort and bring it elsewhere, so it’s delivered locally.
We’re in 90 markets, we have 90 market presidents, and those markets have local leadership. They’re aware of the issues of the area and what hospitals one would work with locally. Health care is about delivering it locally and immediately.
On affordable housing, that’s a long-term play. We already do about $5 billion in community development, which is largely affordable housing, though not entirely. Sometimes it’s just hard to get housing done, and it takes some concessionary capital upfront, meaning you’re going to put money in early on to help with a feasibility study, or a first shovel in the ground, or maybe a green assessment. That sometimes requires some additional work or it requires that you find other participants.
What about workforce development?
We have used our own company as a laboratory for that. And I’ll just give you two instances: One is in tech and operations — we have a program called Year Up. You essentially pay for the training of an individual and on-the-job training, and we’ve been able to place many people into that program. That’s been successful.
Another program we tried is, in the communities in which we operate, the financial centers, trying to distribute some of the back-office work, call centers, just back-office other work within the communities. So taking a financial center and if it has a second floor, standing that up so that we can hire people from the community, as well as in the financial centers. Over the last two years, we brought in 8,000 new employees into the company through that program.
We think that we could extrapolate on that and do a lot more, not just for our company but for other companies, by making sure the right training is in place.
Tell us about the role of vendor diversity here.
We are a very big company, and we buy things from people. We have a $2 billion diversity program right now, meaning those businesses that we purchase from are run by women or people of color, and we need to do more there.
Several years ago we realized we could do so much more than we were doing. We essentially doubled that from $1 billion to $2 billion just in the last four or five years. You do it by making sure you’re creating marketplaces. That’s a little harder right at the moment to do — these big efforts of having people come in — but we nonetheless are going to do what we can virtually. Hopefully in 2021, we can have more in-person efforts.
How do you plan to build on this work in the years to come?
We want to work with other financial institutions and also other companies. … If these are the four initiatives [workforce development, health care, housing and small-business assistance] to implement through the market presidents group, we will have good ideas generated out of the heads of small business, our diversity and inclusion council and the ESG committee, so we never lack for ideas.
One market may have a great idea, and we may realize we could do it in another market. The program we are doing with Howard University Hospital: Maybe we can do that in several other cities. What we did in Los Angeles was an affordable housing project … and we learned some things with that particular development around green spaces, sustainable building, building close to schools, making sure there was a grocery store within the larger complex. What we learned there we could apply elsewhere.
In some cases, we’re willing to be the fast follower. If another organization or company has an idea that’s really terrific, we will have the humility to recognize if that’s something we want to be part of.