Corporations have a moral obligation to stand up for racial equality and social justice inside their own organizations and in the nation at large, PayPal CEO Dan Schulman told USA TODAY.
From the moment George Floyd died on the South Minneapolis pavement under the knee of a white police officer, Schulman knew his company must act. More than a year later, he says PayPal has embraced a new brand of corporate activism.
On his watch, PayPal committed $535 million to support Black-owned businesses and to fight economic inequality, part of Schulman’s goal to close the racial wealth gap.
Inside the company, Schulman noticed some employees were struggling paycheck to paycheck, so he linked employee pay to a new metric called “minimum net disposable income,” or how much a person or household has after paying income taxes and living expenses.
Since his company spun out from eBay, Schulman says, he has also focused on increasing the representation of women and people of color at PayPal, starting at the top.
“Values cannot be words on a wall,” he told USA TODAY. “Values need to be actions you publicly stand up for.”
The interview transcript has been edited for length and clarity.
I don’t think that businesses have the luxury to think of themselves as disassociated from the communities that we live in, from the economies that we’re a part of. The leaders of companies have an obligation to step up and to help address so many of the frailties of our system and the issues that have plagued us for so long.
With the death of George Floyd, in particular, there was an outpouring of emotion inside PayPal and throughout our country. It was a combination of anger, of despair, of frustration, of determination. I felt like we have a long history at PayPal of standing up for our values and taking real action and that we needed to do something to address the inequities and the lack of social justice when it comes to racial equity in our country and around the world.
I personally needed to listen. I needed to learn more. I spoke to Black leaders across the country and Black colleagues inside PayPal to get their insight and their input, and really that changed dramatically the way that PayPal and I felt we needed to react.
The big takeaway that came was that we needed to somehow make a declaration that this was going to be a movement over time and not a moment in time.
As a financial services company, we were going to do our part to reduce the racial wealth gap, which is exactly the same today as it was back in the last civil rights era, and how to do we that not just over the short term but really commit to being part of the fight over the long run. And that’s why we committed $535 million to do our part to battle for social justice and to be a part of the ongoing fight against racial inequality.
I felt like we needed to address some issues immediately and also address issues over time.
For instance, Black-owned businesses, small businesses, during the pandemic were folding at a rate of 41%. That was almost two times the average of small businesses across the country.
There were a lot of reasons why that was happening, like limited access to capital and equity financing, and I felt we could make a real difference right away, not by doing loans but by doing outright grants to Black-owned small businesses.
We decided we were going to do $15 million of grants. We gave grants to just about 1,400 Black-owned businesses. Here’s the result of that: Today, over 90% of those businesses we gave grants to are still in business.