- Goldman Sachs is rolling out a new initiative that’s part of its $US10 ($AU14) billion investment in Black women.
- The firm’s CEO David Solomon has tasked Black female execs with leading the investment.
- The investment came after a virtual town hall in the wake of George Floyd’s death.
- See more stories on Insider’s business page.
On Wednesday, Goldman Sachs announced it is rolling out the latest part of its $US10 ($AU14) billion investment in Black women in the US.
The financial behemoth is partnering with Black-led financial services firm Loop Capital. Together, they’re providing clients of both firms with funds to invest in programs that support Black women pursuing STEM careers. Google is supporting the initiative with a $US500 ($AU683) million investment.
“This launch creates a partnership for corporations to use the cash on their balance sheets to further opportunities for Black women and have a real, lasting impact on communities far and wide,” Kourtney Gibson, president of Loop Capital Markets, said in a press release.
Goldman’s $US10 ($AU14) billion investment in Black women was born out of a raw, emotional conversation CEO David Solomon facilitated at the firm in June of 2020. A few days after the murder of George Floyd, Solomon called a company-wide virtual town hall meeting. He invited three Black executives at the firm to share their perspectives on the Black American experience.
Asahi Pompey, global head of corporate engagement and president of the Goldman Sachs Foundation, was one of those executives. During the town hall, she shared a public letter to her 11-year-old son where she expressed her worries for his life.
At the end of the town hall, Solomon said “I want us to do something as a firm.”
Shortly after, Solomon asked the firm’s research branch where Goldman Sachs could have the most impact to uplift Black Americans. The result: Solomon and a team of executives decided to invest $US10 ($AU14) billion to impact at least one million Black women. The investment is aptly called “1 Million Black Women.”
The report that informed this decision had a clear takeaway. Investing in Black women would have a substantial impact on the economy. The research team estimated that confronting the earnings gap for Black women could raise the country’s GDP by 1.4% to 2.1% each year, or up to $US450 ($AU615) billion.
“The town hall fundamentally changed the firm,” Gizelle George-Joseph, chief operating officer of global investment research at Goldman Sachs, told Insider. She and Pompey are spearheading the investment. George-Joseph, who oversaw the research behind the investment, is consulting with executives like Pompey to make sure the money is invested in places that will have the most impact. Specific plans for how the money will be deployed have not yet been announced, a Goldman representative said.
“We found that if we can equalize Black women’s positions because they are one of the most marginalized groups in this country, then it’s not just an investment in Black women, but it’s an economy that’s working for everybody,” George-Joseph said.
Putting Black women in charge
Several large companies and banks – including Apple and Citi – have committed billions to address racial inequity in the wake of Floyd’s death. Normally, those investments are overseen by the company’s top executives, who are typically white men. But this initiative is not normal.
At Goldman, Solomon has assembled a team of Black women to oversee the firm’s $US10 ($AU14) billion investment. Incoming Walgreens CEO Roz Brewer, actress and director Issa Rae, and former Secretary of State Condoleezza Rice are all on the board of directors for the project. Pompey said Solomon’s decision gives the firm a strategic advantage.
“Those closest to the problem are also closest to the solution,” she said. “Very often other people assume and don’t ask Black women ‘What would make a difference in your communities?'”
Filling a need
The $US10 ($AU14) billion investment addresses disparities Black women face in the job market, housing, healthcare and startup funding.
“We found some really startling numbers,” George-Joseph said.
Black women are a crucial part of America’s startup ecosystem, yet they are deeply underfunded. The number of businesses owned by Black women grew 50% from 2014 to 2019, according to American Express research. Despite this, Black female founders accounted for just 0.3% of venture capital funding, per Goldman Sachs.
Jeannine Cook, the owner of Harriett’s Bookshop in Philadelphia, heralded Goldman’s investment “powerful” and “necessary.”
Cook opened Harriett’s just weeks before the coronavirus pandemic triggered worldwide closures and restrictions. Now, her shop has over 50,000 Instagram followers and she’s been featured on “Good Morning America” and has been visited by several noteworthies, including Isabel Wilkerson, author of the acclaimed “Caste: The Origins of Our Discontents.”
“Black women have always led this country, it’s just that someone else’s name has been attached to our creativity and our content and our decisions. But we’ve always been doing this work,” she said. “I think it’s way past time that something like this happened.”
Black women earn 15% less than white women, and 35% less than white men, per Goldman’s report.
Those closest to the problem are also closest to the solution
To help close the wage gap, the firm recommends businesses hire more Black women in high-paid positions, achieve pay equity, and invest more in Black female founders, like Cook, who can create jobs.
According to the company’s 2019 sustainability report, 29% of its global managing director class were women, 4% were Black. The firm said it wants to increase representation in hiring for entry-level analysts and associates in the Americas to 50% for women, 11% for Black employees. Goldman did not include a timeline.
Editor’s note: This is an updated version of an article originally published on March 16, 2021.