Two Black-led banks will be receiving the remaining portion of a multimillion-dollar investment from CRM platform provider HubSpot that is intended to broaden access in Black communities to financial services, HubSpot said in a recent company news release.
Of the $20.0 million allocated by HubSpot to its initiatives on social impact investing, the second and remaining portion amounting to $7.5 million will go toward supporting two Minority Depository Institutions (MDIs), which are banks and credit unions that are majority-owned or majority-governed by people of color. MDIs make up just 3% of banks and 10% of credit unions, according to the web page on MDIs by Mighty, an independent, women-owned bank comparison site.
The recipients of HubSpot’s second tranche are M&F Bank and The Harbor Bank of Maryland.
M&F Bank is an independent community bank founded in 1907 that sets particular emphasis on helping meet the needs of underserved populations and geographies. The bank has two office locations—one in its headquarters in Durham, North Carolina, and the other in Kansas City, Missouri.
The Harbor Bank of Maryland is a Black-owned bank providing personal and business banking services throughout its seven locations in Baltimore, Randallstown, and Silver Spring. Founded in 1982, the bank has historically furnished capital and financial services to the communities that it serves.
The second disbursement by HubSpot follows its first allocation of $12.5 million invested a year ago in December 2020 in the Black Economic Development Fund, an impact investment fund built specifically to address economic challenges in the Black community, focusing on Black-led financial establishments, Black-led businesses, and Black-led anchor institutions to strengthen their contributions to the Black community.
The HubSpot investments are being made through the JP Morgan Chase program Empowering Change, which includes a new Empower money market share class for distribution by MDIs and diverse-led Community Development Financial Institutions (CDFIs). The program is designed to allow MDIs and CDFIs to offer new investment products to their customers, boost their technological capabilities, and develop new revenue through fund distribution.
Kate Bueker, chief financial officer of HubSpot, said that conversations with MDIs reveal the “unique challenges” that Black-led banks face. With the number of Black-led banks in the US declining steadily, from 48 in 2001 to 20 in 2020, Black communities have faced limited banking access and opportunity, resulting in a racial wealth and funding gap.
“We have a responsibility to our Black employees, customers, partners, and investors to help create more economic opportunities, and we’re proud to partner with JP Morgan to help MDIs support the Black communities they serve and build a sustainable future,” Bueker said. HubSpot, headquartered in Cambridge, Massachusetts, has made diversity, inclusion, and belonging mission-critical signposts in the company’s stated quest to create a more equitable world. HubSpot is also the provider of a CRM platform with a suite of marketing, sales, service, operations, and website management tools to attract, engage, and delight customers.
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Alex is responsible for writing about trends and changes that are impacting the customer experience market. He had served as Principal Editor at Village Intelligence, a Los Angeles-based consultancy on technology impacting healthcare and healthcare-related industries. Alex was also Associate Director for Content Management at Omdia and Informa Tech, where he produced white papers, executive summaries, market insights, blogs, and other key content assets. His areas of coverage spanned the sectors grouped under the technology vertical, including semiconductors, smart technologies, enterprise & IT, media, displays, mobile, power, healthcare, China research, industrial and IoT, automotive, and transformative technologies.
At IHS Markit, he was Managing Editor of the company’s flagship IHS Quarterly, covering aerospace & defense, economics & country risk, chemicals, oil & gas, and other IHS verticals. He was Principal Editor of analyst output at iSuppli Corp. and Managing Editor of Market Watch, a fortnightly newsletter highlighting significant analyst report findings for pitching to the media. He started his career in writing as an Editor-Reporter for The Associated Press.
