NEW YORK, Aug. 28, 2020 /PRNewswire/ -- Costco Wholesale Corporation (Nasdaq: COST) is committing $25 million to an innovative new impact investment fund that will fuel Black-led financial institutions and community development efforts.
The Local Initiatives Support Corporation (LISC) rolled out the Black Economic Development Fund this summer, encouraging corporations to make investments specifically designed to improve economic opportunity for Black Americans. By doing so, the fund seeks to help close the racial wealth gap, which could cost the U.S. economy as much as $1.5 trillion by 2028 if not addressed.
"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, President and CEO of Costco. "With LISC, we are supporting a more inclusive economy, to break down race and class as barriers to opportunity and growth."
Costco is the second investor in the fund, following Netflix, which seeded the fund just last month. LISC expects to further expand the investor base and hold the fund's first closing this fall, with over $100 million in commitments from public and private corporations.
The fund has preliminarily identified $30 million in potential pipeline of investments in urban and rural communities. The fund will focus on making deposits in Black-owned banks and offering financing to minority businesses, charter schools, affordable housing projects, and athletic facilities, to support economic development in communities of color. The fund expects to begin initial deployment of capital in the fourth quarter.
"This commitment from Costco illustrates how corporations can leverage their capital to both meet their own objectives and drive deep and lasting gains for American families," said Maurice A. Jones, LISC president and CEO.
"With this fund, we are talking about much more than bank deposits and loans," he continued. "This is about investing in vibrant small businesses and growing local incomes. It's about directing capital toward a traditionally underserved population. At its core, this fund is focused on building a stronger future for Black communities and our country."
For more information on the Black Economic Development Fund, contact [email protected].
With residents and partners, LISC forges resilient and inclusive communities of opportunity across America – great places to live, work, visit, do business and raise families. Since 1979, LISC has invested $22 billion to build or rehab more than 419,000 affordable homes and apartments and develop 70.3 million square feet of retail, community and educational space.
Costco currently operates 795 warehouses, including 552 in the United States and Puerto Rico, 101 in Canada, 39 in Mexico, 29 in the United Kingdom, 27 in Japan, 16 in Korea, 13 in Taiwan, 12 in Australia, three in Spain, and one each in Iceland, France, and China. Costco also operates e-commerce sites in the U.S., Canada, the United Kingdom, Mexico, Korea, Taiwan, Japan, and Australia.
SOURCE Local Initiatives Support Corporation (LISC)