(upbeat music)
- Money, for centuries we've been told
that it makes the world go round but for millions of black
and Brown families, entrepreneurs and business owners
it is brought their world to a screeching halt.
In today's terms, we are smack dab in the center
of a worldwide medical crisis,
global racial injustice protests
and the most promising country in the world
becoming more divided than ever
and if there's one thing that 2020 has taught us
is that this ever-widening racial divide
determines who thrives and who doesn't survive.
Meanwhile, many companies are attempting
to make more significant strides
than ever before in bridging inequality gaps.
One of the companies quite literally putting their money
where their mouth is on the issue is PayPal.
Creating real systemic change is a continuous journey
that requires us to always keep taking steps forward
no matter how big or how small.
This is The Work in Progress.
In June of 2020 PayPal announced a 530 million commitment
to support black businesses, strengthen minority communities
and fight economic inequality
also after surveying its own employees,
they discovered that 60% of those working at call centers
or an hourly roles were struggling to make ends meet.
PayPal responded by increasing wages and ensuring
that employees could cover their essential living expenses
and put together an employee financial health program.
I spoke with CEO of PayPal, Dan Schulman
and executive vice president of global sales
Peggy Alford to find out about the inventive efforts
they are doing both internally and externally
to resolve socioeconomic inequality.
Dan Schulman, CEO of PayPal Welcome to The Work in Progress.
- Great to be here thanks for having me.
- Let's do a little brief history
you joined in 2014 and here we are seven years later
when it comes to diversity and inclusion
how has your mission changed over the course of seven years?
- So our mission that we defined
and we spent a ton of time thinking about this process
as you can probably imagine
was basically how do we help democratize financial services
which basically is a fancy way of saying
how do we allow everyone to manage and move their money
you know, inexpensively, quickly so that managing
and moving money isn't like a right for the affluent.
It's a right for everybody and if that was our mission
then we add a set of values around that
and our primary value is how do we become a company
that is more inclusive that supports diversity
because our mission is diverse by its very nature.
- There's been a lot of we stand in solidarity emails
and people are changing their logos on LinkedIn
and everywhere else, but then it's just like
Oh we actually need to do work.
- The time that I realized that this was going
to be an on going fight was when we withdrew
from North Carolina because of the bathroom bill,
you know, in our reading of it allowed
for the potential discrimination against somebody
for their sexual orientation or their sexual identity
and I said to myself like no this does not work for me
we are pulling out of North Carolina but when we did that
the amount of emotion that that brought forth from letters
from customers who loved us because of that
and letters from customers who not just hated us for that
but also sent many death threats to me as well
is when I realized that standing up for your values
is not just the thing you say but it's a thing
that if you do you need to know
that you're in the fight for this
- The 530 million fund
kind of walk us through that program
and especially just like making it real
you know, making the promise a reality
- As it turned out we upped it to $535 million commitment
but you know when all that outpouring of emotion happened
post George Floyd, you know, we spent a lot of time
I spent a lot of time talking to black employees
inside PayPal, black leaders inside PayPal,
black leaders across the country from Reverend barber
to Darren Walker to others to basically say like
what does it mean to get involved in this
like to take a stand for it?
And the thing that I heard back
which really made an impression on me is
Dan this can't be a moment it needs to be a movement
because you know the moment will pass us by
and the same issues will be with us
a year from now two years
look at the last civil rights movement
the racial wealth gap is exactly the same
as it was back then no improvement.
So they say, how do you become part of a movement over time?
Which means that you need to be part of the fight
as we talked about, not just give two or $5 million
to some very well deserving non-profits
and then go okay, we did our thing there
we showed, we cared and then move on
and that's really where we said
we need to show that we're part
of the fight over the longterm and we need to step up
and make a commitment that matters and a commitment
and a place that we maybe can do a little something about
which is the racial wealth gap
because we're a financial services company.
We did like $15 million of what we call empowerment brands
to black owned businesses that could not get loans
to stay in business through COVID
and so these were grants, these weren't loans
these weren't anything these were just like
here's money to get through this moment
and the reaction from those communities
and those grantees was emotional and heartwarming to see
the difference we're making
but also we invested in community banks, you know
in lower income neighborhoods to like help the community.
We invested in venture companies
that invest in people of color in black owned businesses
and entrepreneurs to help that gap that exists as well.
- On the learning side
you've obviously come across a lot of statistics
that PayPal is combating, you know,
one being sort of this 70 million
underserved financially cultures around the country
talk to us a little bit about that
and how you've been able to combat that
especially, you know, a level of responsibility
that PayPal has as a leader
in one of the most important industries in the world.
- This is the first generation that has ever thought
they will not grow up to be better off
than their parents were.
You know, this whole idea of the American dream,
if I work hard enough I'll get ahead
and I think one of the jobs that we have at PayPal
one of many jobs that we have is trying to create
a degree of financial health for those that we serve
because I think financial health is a bedrock
or a foundation of so many things
and so we put into place a very comprehensive program
here at PayPal that looked at how well are our employees
doing financially
and so we slashed the cost of healthcare benefits by 60%,
We gave everyone in the company equity,
we raise wages where we needed to,
we put all of that into a financial education program
so people understood what it meant to save,
what it meant to have equity that mattered
to 50% of our employees that changed their lives
and we need to do the same things
to the customer populations we serve
how do we help them become a little bit more
financially healthy.
- Peggy Alford, executive vice president of global sales
believes that profit and purpose go hand in hand
therefore diversity and inclusion will always
be a part of PayPal's ethics.
What have you seen change or stay the same as it comes
to diversity and inclusion inside the organization?
- Well, you know, since Dan Schulman joined
I have to say that diversity and inclusion
has always been a part of PayPal
and how we think about things
and I always, one of the things I really like
about Dan's leadership is that he views diversity
as the representation you need in order
to serve your customers well across the world.
What I mean by that is the way you actually build product
and deploy product that's going to resonate across the globe
is to ensure that the people that are doing that
within the company are representative of the customers
that you're serving today as well as those that you want
to serve in the future and so the way PayPal thinks
about diversity and inclusion is it's just good business
and it's the way you get it right with your customers
and so that's always been something that's been a part
of what we do.
In the last year the racially charged murders
that happened in 2020 have really lit a fire
under companies in terms of really identifying
and sort of understanding the challenge
that we have in our country.
Companies are being asked today
to consider how they can make a real impact
and it's become table stakes
and I know that for a lot of employees
especially black employees, it's sort of felt like
I don't know why this is such a surprise,
I don't know why this isn't something that has been known,
this has been our life experience,
it's been our experience working at companies
and it can be frustrating when it becomes
a sort of awakening moment.
That said, the way I feel about it is
it makes me happy that it's happening
regardless of whether it should have happened in the past.
- What sort of tools have you seen
or processes or methodologies internally
have you seen neglect that kind of break that open
a little bit and get people on board
and like moving as fast as the culture is wanting to move.
- I do think that with the change that we're looking
to manifest within PayPal
we're thinking about first understanding
and learning and listening and then thinking
about how we actually make sustainable change
and so that involves really trying
to understand the perspectives that exist in our communities
within our employees and using those to influence
the type of change we're looking to make
- Can walk us through some of the efforts
when you talk about from team to team
and sort of the idea of ownership and who does what
and so on and so forth
but really creating more of a shared responsibility
when it comes around diversity and inclusion.
Something like, for instance internally you have
the financial health practice
maybe that could be an entry point
to discussing just some of those other initiatives
that are happening internally to kind of spread the love
if you will
- We made a $530 million commitment towards black
and minority owned businesses
and sort of closing the wealth divide
that happens within black communities
versus white communities
and when we announced this commitment in June,
we thought about how best to both balance
the need to truly identify the most pressing needs
that we just need to put resources against right away
but balanced with making sustainable and longterm change.
First, we wanted to make sure that we had the voice
of our internal stakeholders,
our black employees through the Amplify
which is our ERG for black employees,
we listened a lot and thought about, you know
what are the community organizations
that they think most about that can help influence
where we want to put that commitment
but we also partnered with the Association
of Enterprise Opportunity which is an organization
that has a lot of expertise and network
to help us determine the right businesses
that needed to receive immediate cash grants.
But we also wanted to make sure that we were thinking
about a longer-term commitment
and so, we wanted to think about black venture
and black startups and black community black banks
and thinking about our suppliers and vendors
and how we target investment towards those
and that all of those efforts are more long-term
so we're doing tranches of investment.
- So Peggy let's say I'm an employee at PayPal
and I recognize a need for change
what is my first step to take as a new person
or maybe a little lower on the hierarchical system
- For sure you know, first of all, we are hiring
but I think that you can speak up, right
and you know, one of the things that I try
to encourage everyone that I work with is that
your voice is important and so speaking up
and you know we have lots of forums to enable employees
to get their word out and get their thoughts through
but when we made the $530 million commitment
what we realized is that we were going to need
to rely on the expertise of our employees
that come from communities across the world
and across the country
but also bring their own experience and perspective
in a way that can really enable us to get
to some of the root cause challenges that we have
and so we've made it very clear that we need
to hear from our employees
and we've heard a lot from our employees
and we've gotten a lot of the ideas
that formed our strategy around our commitment
from the walls of our company.
- If a finance company like PayPal can act on issues wider
than Silicon Valley then they have the potential
to help end the racial wealth gap on a global scale.
- It's this internal shift that creates an external growth
you know, and if I tie that to something I read recently
about PayPal's goal to grow to a billion users
how do you think this sort of focus on financial inclusion
internally resonates externally
and gets you closer to that goal?
- You know, one of the ways that you become
or have a chance to become a great company
from being a good company is having an employee base
that really believes you're making a difference
in the world, knows the company stands for a set of values,
tries to do the best to be sure
that they're financially healthy themselves
and if you can do that then the way
that employees approach populations
that we're trying to serve that are excluded
from the financial system can be done
with a degree of empathy in our products
and our services that can make a real difference.
- PayPal is really genuine, you know
and I think that is an important part of the puzzle
and then they found something in their DNA
which is finance obviously but it is a great equalizer
or potential equalizer when it comes
to diversity and inclusion
and especially financial security.
That's the one thing that unifies us all
is the amount of money we have or do not have
and how we're able to manage that
and what's our emotional relationship to financing.
So even the things that they've done internally
like standing up this sort of financial health program
with their employees definitely affects
how they operate externally.
The most surprising thing to me was just really like
this is not lip service.
You know, you have a lot of organizations
that send emails and they do the tweets
and they change the logos and they do all these things
but to find that there's a deep rooted sense of empathy
that's come from leadership and extends down
into the walls of the organization
and also the inventive nature of how they go about doing it
to stand up a $535 million fund is no easy task
and especially the the harder part being
actually executing on that promise.