Google Plans to Invest Half a Billion Dollars in JPMorgan’s Racial Equity Push

The tech giant is anchoring a program designed to support diverse-led financial institutions.

David Paul Morris/Bloomberg

David Paul Morris/Bloomberg

Google is planning to invest half a billion dollars in a new money market fund share class created by JPMorgan Chase & Co. to support minority-owned and diverse-led financial institutions.

The Empower money market share class will initially be distributed by four diverse-led Minority Depository Institutions, or MDIs: The Harbor Bank of Maryland in Baltimore; Liberty Bank and Trust Co. in New Orleans; Durham, North Carolina-based M&F Bank; and Houston-based Unity National Bank, according to Paula Stibbe, head of sales for J.P. Morgan Asset Management’s global liquidity business. “It’s really about the impact,” she said in a phone interview, explaining the recurring revenue the banks receive under the distribution agreement may in turn support their communities.

MDIs and Community Development Financial Institutions often lack funding for vital financial services in communities that are underrepresented, prompting the Wall Street bank to start the Google-anchored program, called Empowering Change. Under the program, JPMorgan will annually donate 12.5 percent of the management fees it collects from Empower share class assets to a donor-advised fund it has created to support communities of color, Stibbe said.

“We feel a responsibility to be a part of the solution,” Juan Rajlin, vice president and treasurer at Google, said during the phone interview. “We care deeply about racial equity; we care deeply about small businesses.”

For Google, the initiative builds on the technology giant’s partnership with the Opportunity Finance Network to support CDFIs and racial equity commitments it made in 2020. Rajlin said he expects that JPMorgan’s Empowering Change program will appeal to other companies, as all treasurers manage short-term liquidity and use money market funds to do so.

“When you have an opportunity to invest in a share class that makes an impact to both CDFIs and MDIs, it helps them with a new revenue source, and that allows them to serve their communities,” he said of Google’s decision to anchor JPMorgan’s new program.

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JPMorgan manages more than $630 billion in money market fund assets, according to Stibbe.

She echoed Rajlin in saying the funds are “a common investment tool used by institutional clients.” The Empower share class gives them a way to use an investing solution they’re already comfortable with, she said, “but to be able to do that while supporting underserved communities and MDIs.”

Another part of the bank’s Empowering Change program provides diverse-led financial institutions with access to J.P. Morgan Asset Management’s business resources, according to Stibbe. Beyond the new money market share class, she said the bank has also invested and committed the first $40 million of its $50 million equity pledge to Black and Latinx-led MDIs.