Costco is committing $25 million to a new impact investment fund that will fuel Black-led financial institutions and community development initiatives.
The Local Initiatives Support Corp. rolled out the Black Economic Development Fund this summer, encouraging corporations to invest in ways that improve economic opportunity for Black Americans. By doing so, the fund seeks to help close the racial wealth gap. Costco is the second fund investor, following Netflix, which seeded the fund last month. LISC expects to expand the investor base and hold the fund’s first closing this fall based on more than $100 million in commitments from public and private corporations.
The fund has identified $30 million in potential investments that would provide support for urban and rural communities. The fund will make deposits in Black-owned banks and offer financing to minority businesses, charter schools, affordable housing projects and athletic facilities to support economic development in communities of color. The fund anticipates beginning initial capital deployment in the fourth quarter.
“We are thrilled to be a part of an investment strategy that will help some of the communities where we operate in the U.S.,” said Craig Jelinek, Costco president and CEO. “With LISC, we are supporting a more inclusive economy, to break down race and class as barriers to opportunity and growth.”