HubSpot announced that it has committed $20 million to social impact investing. The company’s first allocation of those funds is a $12.5 million investment in the Black Economic Development Fund to support Black-led financial institutions, community centers, anchor institutions, and business transactions. The Fund is managed by the Local Initiatives Support Corporation (LISC), one of the nation’s largest community development financial institutions.
Following HubSpot’s announcement, LISC said its Black Economic Development Fund had closed at $175 million worth of investments, including $50 million from PayPal in addition to the $12.5 million from HubSpot.
“Earlier this year, we committed to help dismantle systemic racism through meaningful, long-term change. We chose four key pillars – introspection, investment, inclusion, and impact – to guide that work,” said Brian Halligan, Co-Founder and CEO of HubSpot. “Our goal in investing in the Fund is to support Black communities and foster economic empowerment. We’re proud to join LISC and our fellow investors in this effort to help close the racial wealth gap.”
The amount from PayPal is the largest single investment to date for the LISC’s Black Economic Development Fund. PayPal and HubSpot join Netflix, Costco, Square, Dick's Sporting Goods, and Aflac as investors in the fund. New York-based LISC, which launched the fund this summer, said the total it has received to date has far exceeded initial capital projections for 2020.
The fund employs an "impact treasury strategy" to meet the particular capital preservation, investment duration, and risk-tolerance needs of corporate treasuries while providing impactful access to capital for Black communities.
LISC expects to begin deploying capital from the fund in early 2021 in the form of bank deposits, bridge financing, and other financing. The strategy furthers the goals of Project 10X, LISC’s $1 billion effort to address disparities in health, wealth, and opportunity facing people of color.
In 2020, HubSpot’s announced that it had partnered with the Howard University School of Business to establish a Center for Digital Business, a new multipurpose space that will facilitate education, collaboration and innovation among students, faculty, staff, and business leaders.
HubSpot is certainly setting itself apart as a role model for other tech companies in using its wealth and platform as a means to uplift Black-led business and initiatives – a particularly important focus in today’s political climate.